Commercial Vehicle Group Annual Report 2017

Plain-text annual report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-KþAnnual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934or¨Transition report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended December 31, 2017 Commission file number:001-34365 COMMERCIAL VEHICLE GROUP, INC.(Exact name of Registrant as specified in its charter)Delaware 41-1990662(State of Incorporation) (I.R.S. Employer Identification No.) 7800 Walton Parkway 43054New Albany, Ohio (Zip Code)(Address of Principal Executive Offices) Registrant’s telephone number, including area code:(614) 289-5360 Securities registered pursuant to Section 12(b) of the Act:Title of Each Class Name of exchange on which registeredCommon Stock, par value $.01 per share The NASDAQ Global Select MarketSecurities registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Schedule 15(d) of the Act. Yes ¨ No þIndicate 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 preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days. Yes þ No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted andposted 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 suchfiles). Yes þ No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨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 ¨ Accelerated filer þ Non-accelerated filer ¨ Smaller reporting company ¨If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þThe aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last soldon June 30, 2017, was $251,131,448.As of March 12, 2018, 31,004,524 shares of Common Stock of the Registrant were outstanding.Documents Incorporated by ReferenceInformation required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference from the Registrant’s Proxy Statement forits annual meeting to be held May 17, 2018 (the “2018 Proxy Statement”). Table of ContentsCOMMERCIAL VEHICLE GROUP, INC.Annual Report on Form 10-KTable of Contents PagePART I Item 1.Business1Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments24Item 2.Properties25Item 3.Legal Proceedings25Item 4.Mine Safety Disclosures26 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities27Item 6.Selected Financial Data29Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations39Item 7A.Quantitative and Qualitative Disclosures About Market Risk40Item 8.Financial Statements and Supplementary Data42Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure73Item 9A.Controls and Procedures73Item 9B.Other Information76 PART III Item 10.Directors, Executive Officers and Corporate Governance76Item 11.Executive Compensation77Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters77Item 13.Certain Relationships, Related Transactions and Director Independence77Item 14.Principal Accountant Fees and Services78 PART IV Item 15.Exhibits and Financial Statements Schedules79SIGNATURES83iTable of ContentsCERTAIN DEFINITIONSAll references in this Annual Report on Form 10-K to the “Company”, “Commercial Vehicle Group”, “CVG”, “we”,“us”, and “our” refer to CommercialVehicle Group, Inc. and its consolidated subsidiaries (unless the context otherwise requires).FORWARD-LOOKING INFORMATIONThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, asamended. For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements under“Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere hereinregarding industry outlook, financial covenant compliance, anticipated effects of acquisitions, production of new products, plans for capital expendituresand our results of operations or financial position and liquidity, may be deemed to be forward-looking statements. Without limiting the foregoing, the words“believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions, as they relateto us, are intended to identify forward-looking statements. The important factors discussed in “Item 1A - Risk Factors”, among others, could cause actualresults to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Suchforward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ frommanagement’s expectations. Additionally, various economic and competitive factors could cause actual results to differ materially from those discussed insuch forward-looking statements, including, but not limited to, factors which are outside our control, such as risks relating to (i) general economic or businessconditions affecting the markets in which we serve; (ii) our ability to develop or successfully introduce new products; (iii) risks associated with conductingbusiness in foreign countries and currencies; (iv) increased competition in the medium- and heavy-duty, construction, agriculture, aftermarket, military, busand other markets; (v) our failure to complete or successfully integrate additional strategic acquisitions; (vi) the impact of changes in governmentalregulations on our customers or on our business; (vii) the loss of business from a major customer or the discontinuation of particular commercial vehicleplatforms; (viii) our ability to obtain future financing due to changes in the lending markets or our financial position and (ix) our ability to comply with thefinancial covenants in our revolving credit facility and term loan facility. All subsequent written and oral forward-looking statements attributable to us orpersons acting on our behalf are expressly qualified in their entirety by such cautionary statements.iiTable of ContentsPART IItem 1.BusinessCOMPANY OVERVIEWCommercial Vehicle Group, Inc. (and its subsidiaries) is a leading supplier of a full range of cab related products and systems for the global commercialvehicle market, including the medium- and heavy-duty truck (“MD/HD Truck”) market, the medium- and heavy-construction vehicle market, and themilitary, bus, agriculture, specialty transportation, mining, industrial equipment and off-road recreational markets.We have manufacturing operations in the United States, Mexico, United Kingdom, Czech Republic, Ukraine, China, India and Australia. Our products areprimarily sold in North America, Europe, and the Asia-Pacific region.Our products include seats and seating systems ("Seats"); trim systems and components ("Trim"); cab structures, sleeper boxes, body panels and structuralcomponents; mirrors, wipers and controls; and electric wire harness and panel assemblies designed for applications in commercial and other vehicles.We are differentiated from automotive industry suppliers by our ability to manufacture low volume, customized products on a sequenced basis to meet therequirements of our customers. We believe our products are used by a majority of the North American MD/HD Truck and certain leading global constructionand agriculture original equipment manufacturers (“OEMs”), which we believe creates an opportunity to cross-sell our products.Our Long-term Strategy and Strategic FootprintRefer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.SEGMENTSOperating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker (“CODM”),which is our President and Chief Executive Officer. The Company has two reportable segments: the Global Truck and Bus Segment (“GTB Segment”) and theGlobal Construction and Agriculture Segment (“GCA Segment”). Each of these segments consists of a number of manufacturing facilities. Certain of ourfacilities manufacture and sell products through both of our segments. Each manufacturing facility that sells products through both segments is reflected inthe financial results of the segment that has the greatest amount of revenues from that manufacturing facility. Our segments are more specifically describedbelow.The GTB Segment manufactures and sells the following products: •Seats, Trim, sleeper boxes, cab structures, structural components and body panels. These products are sold primarily to the MD/HD Truck markets inNorth America;•Seats to the truck and bus markets in Asia-Pacific and Europe;•Mirrors and wiper systems to the truck, bus, agriculture, construction, rail and military markets in North America;•Trim to the recreational and specialty vehicle markets in North America; and•Aftermarket seats and components in North America.The GCA Segment manufactures and sells the following products: •Wire harness assemblies and Seats for construction, agricultural, industrial, automotive, mining and military industries in North America, Europe andAsia-Pacific;•Seats to the truck and bus markets in Asia-Pacific and Europe;•Wiper systems to the construction and agriculture markets in Europe;•Office seating in Europe and Asia-Pacific; and•Aftermarket seats and components in Europe and Asia-Pacific.See Note 9 of the Notes to Consolidated Finance Statements under Item 8 Financial Statements and Supplementary Data for financial information presentedby segment for each of the three years ended December 31, 2017, 2016 and 2015, including information on sales and long-lived assets by geographic area.GLOBAL TRUCK AND BUS SEGMENT OVERVIEWGlobal Truck and Bus Segment Products1Table of ContentsSet forth below is a brief description of our products manufactured in the GTB Segment and their applications.Seats and Seating Systems. We design, engineer and produce Seats for MD/HD Truck and bus applications. For the most part, our Seats are fully-assembledand ready for installation when they are delivered to the OEM. We offer a wide range of seats that include mechanical and air suspension seats, static seats,bus seats and military seats. As a result of our product design and product technology, we believe we are a leader in designing seats with convenience andsafety features. Our Seats are designed to achieve a high level of operator comfort by adding a wide range of manual and power features such as lumbarsupport, cushion and back bolsters, and leg and thigh support. Our Seats are built to meet customer requirements in low volumes and produced in numerousfeature combinations to form a full-range product line with a wide level of price points. We also manufacture seats, and parts and components for theaftermarket.Trim Systems and Components. We design, engineer and produce Trim for MD/HD Truck, and recreational and specialty vehicle applications. Our Trimproducts are used mostly for interior cabs of commercial vehicles as well as exterior components for commercial recreational and specialty vehicles. Our Trimproducts are designed to provide a comfortable and durable interior along with a variety of functional and safety features for the vehicle occupant. The widevariety of features that can be selected makes Trim a complex and specialized product category. Set forth below is a brief description of our principalproducts in the Trim category:Trim Products. Our trim products include door panels and other interior trim panels. Specific components include vinyl or cloth-covered appliqués rangingfrom a traditional cut and sew approach to a contemporary molded styling theme, armrests, map pocket compartments, and sound-reducing insulation.Instrument Panels. We produce and assemble instrument panels that can be integrated with the rest of the interior trim. The instrument panel is a complexsystem of coverings and foam, plastic and metal parts designed to house various components and act as a safety device for the vehicle occupant.Headliners/Wall Panels. Headliners and wall panels consist of a substrate and a finished interior layer made of fabrics and other materials. While headlinersand wall panels are an important contributor to interior aesthetics, they also provide insulation from road noise and can serve as carriers for a variety of othercomponents, such as visors, overhead consoles, grab handles, coat hooks, electrical wiring, speakers, lighting and other electronic and electrical products.Storage Systems. Our modular storage units and custom cabinetry are designed to improve comfort and optimize space for the operator. These storagesystems are designed to be integrated with the interior trim.Floor Covering Systems. We have an extensive and comprehensive portfolio of floor covering systems and dash insulators. Carpet flooring systemsgenerally consist of tufted or non-woven carpet with a thermoplastic backcoating. Non-carpeted flooring systems, used primarily in commercial and fleetvehicles, offer improved wear and maintenance characteristics.Sleeper Bunks. We offer a wide array of design choices for upper and lower sleeper bunks for heavy-duty trucks. All parts of our sleeper bunks can beintegrated to match the rest of the interior trim.Grab Handles and Armrests. Our grab handles and armrests are designed and engineered with specific attention to aesthetics, ergonomics and strength.Privacy Curtains. We produce privacy curtains for use in sleeper cabs.Plastics Decorating and Finishing. We offer customers a wide variety of cost-effective finishes in paint, ultra violet, hard coating and customized industrialhydrographic films (simulated appearance of wood grain, carbon fiber, brushed metal, marbles, camouflage and custom patterns), paints and other interior andexterior finishes.Cab Structures, Sleeper Boxes, Body Panels and Structural Components. We design, engineer and produce complete cab structures, sleeper boxes, bodypanels and structural components for MD/HD Trucks. Set forth below is a brief description of our principal products in this category:Cab Structures. We design, manufacture and assemble complete cab structures. Our cab structures, which are manufactured from both steel and aluminum,are delivered fully assembled and primed for paint.Sleeper Boxes. We design, manufacture and assemble sleeper boxes that can be part of the overall cab structure or standalone assemblies depending on thecustomer application.Bumper Fascias and Fender Liners. We design and manufacture durable, lightweight bumper fascias and fender liners.2Table of ContentsBody Panels and Structural Components. We produce a wide range of both steel and aluminum large exterior body panels and structural components for usein production of cab structures and sleeper boxes.Mirrors, Wipers and Technical Controls. We design, engineer and produce a variety of mirrors, wipers and controls used in commercial vehicles. Set forthbelow is a brief description of our principal products in this category:Mirrors. We offer a range of round, rectangular, motorized and heated mirrors and related hardware, including brackets, braces and side bars. We haveintroduced both road and outside temperature devices that can be mounted on the cab, integrated into the mirror face and the vehicle’s dashboard throughour RoadWatch™ family of products.Windshield Wiper Systems. We offer application-specific windshield wiper systems and individual windshield wiper components.Controls. We offer a range of controls and control systems for window lifts, door locks and electric switch products.Global Truck and Bus Segment Raw Materials and SuppliersA description of the principal raw materials we utilize in our GTB Segment’s principal product categories is set forth below:•Seats and Seating Systems. The principal raw materials used in our Seats include steel, resin-based products and foam products and aregenerally readily available and obtained from multiple suppliers under various supply agreements. Leather, vinyl, fabric and certaincomponents are also purchased from multiple suppliers.•Trim Systems and Components. The principal raw materials used in our Trim are resin and chemical products, foam, vinyl and fabric which areformed and assembled into end products. These raw materials are generally readily available from multiple suppliers.•Cab Structures, Sleeper Boxes, Body Panels and Structural Components. The principal raw materials and components used in our cabstructures, sleeper boxes, body panels and structural components are steel and aluminum. These raw materials are generally readily availableand obtained from multiple suppliers.•Mirrors, Wipers and Controls. The principal raw materials used to manufacture our mirrors, wipers and controls are steel, stainless steel,aluminum and rubber, which are generally readily available and obtained from multiple suppliers. We also purchase sub-assembled products,such as motors, for our wiper systems and mirrors.Global Truck and Bus Segment CustomersThe following is a summary of the GTB Segment’s significant revenues (figures are shown as a percentage of total GTB Segment revenue) by end market foreach of the three years ended December 31: 2017 2016 2015Medium- and Heavy-duty Truck OEMs64% 62% 70%Aftermarket and OE Service19 18 15Bus OEMs7 8 6Construction OEMs2 2 2Other8 10 7Total100% 100% 100%We believe we are a successful long-term supplier because of our comprehensive product offerings, leading brand names and product innovation. Ourprincipal customers include A.B. Volvo, Daimler Trucks, PACCAR and Navistar, constituting a combined total of 74%, 73% and 79% of GTB Segmentrevenue for the years ended December 31, 2017, 2016 and 2015, respectively.Our European and Asia-Pacific operations collectively contributed approximately 6%, 6% and 4% of the GTB Segment’s revenues for the years endedDecember 31, 2017, 2016 and 2015, respectively.Global Truck and Bus IndustryCommercial Vehicle Market Overview. Commercial vehicles are used in a wide variety of end markets, including local and long-haul commercialtrucking, bus, construction, mining, agricultural, military, industrial, municipal, off-road recreation and specialty vehicle markets. The commercial vehiclesupply industry can generally be separated into two categories: (1) sales to OEMs, in which products are sold in relatively large quantities directly for use byOEMs in new commercial and construction vehicles; and (2) aftermarket sales, in which products are sold as replacements to a wide range of originalequipment service organizations, wholesalers, retailers and installers. In the OEM market, suppliers are generally divided into tiers - “Tier 1” suppliers3Table of Contentsthat provide products directly to OEMs, and “Tier 2” and “Tier 3” suppliers that sell products principally to other suppliers for integration into thosesuppliers’ own product offerings. We are generally a Tier I supplier.Our largest end market, the North American commercial truck industry, is supplied by medium- and heavy-duty commercial vehicle suppliers, as well asautomotive suppliers. The commercial vehicle supplier industry is fragmented and comprised of several large companies and many smaller companies. Inaddition, the commercial vehicle supplier industry is characterized by relatively low production volumes and can have considerable barriers to entry,including the following: (1) specific technical and manufacturing requirements, (2) high transition costs to shift production to new suppliers, (3) just-in-timedelivery requirements and (4) strong brand name recognition. Foreign competition is growing with the globalization of the world economy.Although OEM demand for our products is directly correlated with new vehicle production, suppliers like us can grow by increasing sales through the crossselling and bundling of products, further penetrating existing customers’ businesses, gaining new customers, expanding into new geographic markets,developing new content in our products to meet changing customer needs and by increasing aftermarket sales. We believe that companies with a globalpresence, advanced technology, engineering and manufacturing and support capabilities, such as our company, are well positioned to take advantage ofthese opportunities.North American Commercial Truck Market. Purchasers of commercial trucks include fleet operators, owner operators, governmental agencies andindustrial end users. Commercial vehicles used for local and long-haul commercial trucking are generally classified by gross vehicle weight. Class 8 vehiclesare trucks with gross vehicle weight in excess of 33,000 lbs. and Classes 5 through 7 vehicles are trucks with gross vehicle weight from 16,001 lbs. to 33,000lbs. The following table shows production levels (in thousands of units) of commercial vehicles used for local and long-haul commercial trucking from 2013through 2017 in North America: 2013 2014 2015 2016 2017Class 8 trucks246 297 323 228 256Class 5-7 trucks201 226 237 233 249Source: ACT N.A. (February 2018).The following describes the major markets within the commercial vehicle market in which the GTB Segment competes:Class 8 Truck Market. The global Class 8 ("Class 8" or "heavy-duty") truck manufacturing market is concentrated in three primary regions: North America,Europe and Asia-Pacific. The global Class 8 truck market is localized in nature due to the following factors: (1) the prohibitive costs of shipping componentsfrom one region to another, (2) the high degree of customization to meet the region-specific demands of end-users, and (3) the ability to meet just-in-timedelivery requirements. According to ACT Research, four companies represented approximately 98% of North American Class 8 truck production in 2017.The percentages of Class 8 production represented by Daimler, PACCAR, A.B. Volvo, and Navistar were approximately 41%, 30%, 15%, and 12%,respectively, in 2017. We supply products to all of these OEMs.New Class 8 truck demand has historically been cyclical and is particularly sensitive to economic factors that generate a significant portion of the freighttonnage hauled by commercial vehicles.The following table illustrates North American Class 8 truck build for the years 2015 to 2022:“E” — EstimatedSource: ACT (February 2018).Class 5-7 Truck Market. North American Class 5-7 ("Class 5-7" or "medium-duty") includes recreational vehicles, buses and medium-duty trucks. Weprimarily participate in the Class 6 and 7 medium-duty truck market. The medium-duty market is influenced4Table of Contentsby overall economic conditions but has historically been less cyclical than the North American Class 8 truck market, with highs and lows generally not aspronounced as the Class 8 truck market. As the North American truck fleet companies move to a distribution center model, requiring less long-haul freightvehicles, the demand for medium-duty trucks may increase.The following table illustrates the North American Class 5-7 truck build for the years 2015 through 2022:“E” — EstimatedSource: ACT (February 2018).We believe the following factors are primarily responsible for driving the North American Class 8 truck market:Economic Conditions. The North American truck industry is directly influenced by overall economic conditions and consumer spending. Since heavy-dutytruck OEMs supply the fleet operators, their production levels generally reflect the demand for freight and the fleet operators' access to capital.Truck Replacement Cycle and Fleet Aging. The average age of the U.S. Class 8 truck population is approximately 11.3 years in 2017. The average fleet agetends to run in cycles as freight companies permit their truck fleets to age during periods of lagging demand and then replenish those fleets during periods ofincreasing demand. As truck fleets age, maintenance costs typically increase. Freight companies evaluate the economics between repair and replacement aswell as the potential to utilize more cost-effective technology in vehicles. The chart below illustrates the approximate average age of the U.S. Class 8 truckpopulation:“E” — EstimatedSource: ACT (February 2018).Commercial Truck Aftermarket. The GTB Segment sells aftermarket products primarily in North America. Demand for aftermarket products is driven bythe quality of OEM parts, the number of vehicles in operation, the average age of the vehicle fleet, the content and value per vehicle, vehicle usage and theaverage useful life of vehicle parts. Aftermarket sales tend to be at a higher margin. The recurring nature of aftermarket revenue can be expected to providesome insulation to the overall cyclical nature of the industry as it tends to provide a more stable stream of revenues. Brand equity and the extent of acompany’s distribution network also contribute to the level of aftermarket sales. We believe CVG has a widely recognized brand portfolio and participates inmost retail sales channels including Original Equipment Dealer networks and independent distributors.GLOBAL CONSTRUCTION AND AGRICULTURE SEGMENT OVERVIEW5Table of ContentsGlobal Construction and Agriculture Segment ProductsSet forth below is a brief description of our products manufactured in the GCA Segment and their applications.Electric Wire Harnesses and Panel Assemblies. We produce a wide range of electric wire harnesses and electrical distribution systems, and relatedassemblies. Set forth below is a brief description of our principal products in this category:Electric Wire Harnesses. We offer a broad range of electric wire harness assemblies that function as the primary electric current carrying devices used toprovide electrical interconnections for gauges, lights, control functions, power circuits, powertrain and transmission sensors, emissions systems and otherelectronic applications on commercial vehicles. Our wire harnesses are customized to fit specific end-user requirements, and can be complex. We provide ourwire harnesses for a variety of commercial and other vehicles.Panel Assemblies. We assemble integrated components such as panel assemblies and cabinets that are installed in a vehicle or unit of equipment and maybe integrated with our wire harness assemblies. These components provide the user control over multiple operational functions and features.Seats and Seating Systems. We design, engineer and produce Seats predominately for the construction, agriculture and military markets. For the most part,our Seats are fully-assembled and ready for installation when they are delivered to the OEM. We offer a wide range of Seats that include mechanical and airsuspension seats and static seats, as well as seat frames. As a result of our product design and product technology, we believe we are a leader in designingseats with convenience and enhanced safety features. Our Seats are designed to achieve a high level of operator comfort by adding a range of manual andpower features such as lumbar support, cushion and back bolsters and leg and thigh support. Our Seats are built to meet customer requirements in lowvolumes and produced in numerous feature combinations to form a full-range product line with a wide level of price points. We also manufacture seats, partsand components for the aftermarket.Office Seating. We design, engineer and produce office seating products. Our office chair was developed as a result of our experience supplying seats forthe heavy-duty truck, agricultural and construction industries and is fully adjustable to achieve a high comfort level. Our office chairs are designed to suitdifferent office environments including heavy usage environments, such as emergency services, call centers, reception areas, studios and general officeenvironments.Wipers Systems. We design, engineer and produce a variety of wipers used in commercial vehicles. We offer application-specific windshield wiper systemsand individual windshield wiper components.Global Construction and Agriculture Segment Raw Materials and SuppliersA description of the principal raw materials we utilize in GCA Segment’s principal product categories is set forth below:•Electric Wire Harnesses and Panel Assemblies. The principal raw materials used to manufacture our electric wire harnesses are wire and cable,connectors, terminals, switches, relays and various covering techniques involving braided yarn, braided copper, slit and non-slit conduit andmolded foam. These raw materials are obtained from multiple suppliers and are generally available, although we have experienced and continueto experience a shortage of certain of these raw materials.•Seats and Seating Systems. The principal raw materials used in our seating systems include steel, die-cast aluminum, resin-based products andfoam products and are generally readily available and obtained from multiple suppliers under various supply agreements. Leather, vinyl, fabricand certain other components are also readily available to be purchased from multiple suppliers under supply agreements.•Wiper Systems. The principal raw materials used to manufacture our wipers are steel, stainless steel and rubber, which are generally readilyavailable and obtained from multiple suppliers. We also purchase sub-assembled products such as motors for our wiper systems.Global Construction and Agriculture Segment’s CustomersThe following is a summary of the GCA Segment’s significant revenues (figures are shown as a percentage of total GCA Segment revenue) by end marketbased for each of the three years ended December 31:6Table of Contents 2017 2016 2015Construction52% 47% 52%Automotive13 14 14Aftermarket and OE Service12 16 16Truck8 8 5Military5 5 3Agriculture3 3 3Other7 7 7Total100% 100% 100%We believe we are a successful long-term supplier because of our comprehensive product offerings and product innovation services. Our principal customersinclude Caterpillar and John Deere, constituting a combined total of 36%, 33% and 37% of GCA Segment revenue for the years ended December 31, 2017,2016 and 2015, respectively.Our European and Asia-Pacific operations collectively contributed approximately 62%, 63% and 57% of our revenues for the years ended December 31,2017, 2016 and 2015, respectively.Global Construction and Agriculture IndustryCommercial Construction Vehicle Market. New vehicle demand in the global construction equipment market generally follows certain economicconditions including GDP, infrastructure investment, housing starts, business investment, oil and energy investment and industrial production around theworld. Within the construction market, there are two classes of construction equipment markets: the medium and heavy construction equipment market(weighing over 12 metric tons) and the light construction equipment market (weighing below 12 metric tons). Our construction equipment products areprimarily used in the medium and heavy construction equipment markets, with a growing emphasis on light and utility machines. The platforms that wegenerally participate in include: cranes, pavers, planers & profilers, dozers, loaders, graders, haulers, tractors, excavators, backhoes, material handling andcompactors. Demand in the medium and heavy construction equipment market is typically related to the level of larger-scale infrastructure developmentprojects such as highways, dams, harbors, hospitals, airports and industrial development as well as activity in the mining, forestry and other raw materialbased industries.Purchasers of medium and heavy construction equipment include construction companies, municipalities, local governments, rental fleet owners, quarryingand mining companies and forestry related industries. Purchasers of light construction equipment include contractors, rental fleet owners, landscapers,logistics companies and farmers. In the medium and heavy construction equipment market, we primarily supply OEMs with our wire harness and seatingproducts.Agricultural Equipment Market. We market most of our products for small, medium and large agricultural equipment across a spectrum of machinesincluding tractors, sprayers, bailers, farm telehandler equipment and harvesters. Sales and production of these vehicles can be influenced by rising or fallingfarm commodity prices, land values, profitability, and other factors such as increased mechanization in emerging economies and new uses for crop materialssuch as biofuels and other factors. In the medium to longer term, a combination of factors create the need for more productive agricultural equipment, such as:(1) population growth, (2) an evolving sophistication of dietary habits, and (3) constraints on arable land and other macroeconomic and demographic factors.Military Equipment Market. We supply products for heavy- and medium-payload tactical trucks that are used by various military customers. Militaryequipment production is particularly sensitive to political and governmental budgetary considerations.OUR CONSOLIDATED OPERATIONSCompetitive StrengthsGenerally, the barriers to entry in our industries include investment, specific engineering requirements, transition costs for OEMs to shift production to newsuppliers, just-in-time delivery requirements and brand name recognition. Our competitive strengths include the following:Market Positions and Brands. We believe we have a strong market position supplying Seats and a good market position supplying Trim products to theNorth American MD/HD Truck market. Our market position in the North American MD/HD Truck market leads us to believe we have processes in place todesign, manufacture and introduce products that meet customers’ expectations in that market. We also believe we are competitive as a global supplier ofconstruction vehicle Seats. Our major product brands7Table of Contentsinclude CVG™, Sprague Devices®, Moto Mirror®, RoadWatch®, KAB Seating™, National Seating™, Bostrom Seating®, Stratos™ and FinishTEK™.Comprehensive Cab Product and Cab System Solutions. We manufacture a broad base of products utilized in the interior and the exterior of commercialvehicle cabs. We believe the breadth of our product offerings provide us with a potential opportunity for further customer penetration through cross-sellinginitiatives and by bundling our products to provide complete system solutions.End-User Focused Product Innovation. Commercial vehicle OEMs focus on interior and exterior product design features that better serve the vehicleoperator and therefore seek suppliers that can provide product innovation. Accordingly, we have engineering, and research and development capabilities toassist OEMs in meeting those needs. We believe this helps us secure content on new as well as current platforms and models.Flexible Manufacturing Capabilities. Because commercial vehicle OEMs permit their customers to select from an extensive menu of cab options, our endusers frequently request modified products in low volumes within a limited time frame. We can leverage our flexible manufacturing capabilities to providelow volume, customized products to meet styling, cost and just-in-time delivery requirements. We manufacture or assemble our products at facilities in NorthAmerica, Europe and in the Asia-Pacific region.Global Capabilities. We have sales, engineering, manufacturing and assembly capabilities in North America, Europe and the Asia-Pacific region thatprovide a high level of service to our customers who manufacture and sell their products on a global basis.Relationships with Leading Customers and Major North American Fleets. We have comprehensive product offerings, brand names and product featuresthat enable us to be a global supplier to many of the leading MD/HD Truck, construction and specialty commercial vehicle manufacturers such as PACCAR,Caterpillar, Volvo/Mack, Navistar, Daimler Trucks, John Deere, Oshkosh Corporation, Komatsu and Škoda (part of the Volkswagen Group). In addition, wemaintain relationships with the major MD/HD Truck fleet organizations that are end-users of our products such as Schneider National, Werner, Walmart,FedEx and JB Hunt.Management Team. We believe that our management team has substantial knowledge of our customer needs and expertise in critical operational areas, andhas a demonstrated ability to manage costs, improve processes and expand revenue through product, market, geography and customer diversification.Research and DevelopmentOur research and development capabilities offer quality and technologically advanced products to our customers at competitive prices. We offer industrialengineering, product design, specialized simulation and testing and evaluation services that are necessary in today’s global markets. Our capabilities inacoustics, thermal efficiency, benchmarking, multi-axis durability, biomechanics, comfort, prototyping and process prove-out allow us to provide completeintegrated solutions for the end-user.We engage in global engineering, and research and development activities that improve the reliability, performance and cost-effectiveness of our existingproducts and support the design and development and testing of new products for existing and new applications. We have test and validation engineeringcenters in North America, Europe and Asia. We have developed a global engineering support center in India to provide a cost-effective global engineeringresource to all of our seat facilities.We believe we are staffed with experienced engineers and have equipment and technology to support early design involvement that results in products thattimely meet or exceed the customer’s design and performance requirements, and are more efficient to manufacture. Our ability to support our products andcustomers with extensive involvement enhances our position for bidding on such business. We work aggressively to ensure that our quality and deliverymetrics distinguish us from our competitors.Generally, we work with our customers’ engineering and development teams at the beginning of the concept design process for new components andassemblies and systems, or the re-engineering process for existing components and assemblies, in order to leverage production efficiency and quality. Ourcustomers are continuously searching for advanced products while maintaining cost, quality and performance deliverables.Research and development costs for the years ended December 31, 2017, 2016 and 2015 totaled $7.7 million, $7.0 million and $7.4 million, respectively.8Table of ContentsIntellectual PropertyOur principal intellectual property consists of product and process technology U.S. and foreign patents, trade secrets, trademarks and copyrights. Althoughour intellectual property is important to our business operations and in the aggregate constitutes a valuable asset, we do not believe that any single patent,trade secret, trademark or copyright, or group of patents, trade secrets, trademarks or copyrights is critical to the success of our business. Our policy is to seekstatutory protection for all significant intellectual property embodied in patents, trademarks and copyrights.Our major brands include CVG™, Sprague Devices®, Moto Mirror®, RoadWatch®, KAB Seating™, National Seating™, Bostrom Seating®, Stratos™ andFinishTEK™. We believe that our brands are valuable, but that our business is not dependent on any one brand. We own U.S. federal trademark registrationsfor several of our products.Manufacturing ProcessesA description of the manufacturing processes we utilize for each of our principal product categories is set forth below:•Seats and Seating Systems. Our Seats utilize a variety of manufacturing techniques whereby foam and various other components along withfabric, vinyl or leather are affixed to an underlying seat frame. We also manufacture and assemble seat frames.•Trim Systems and Components. Our Trim capabilities include injection molding, low-pressure injection molding, urethane molding andfoaming processes, compression molding, heavy-gauge thermoforming and vacuum forming as well as various cutting, sewing, trimming andfinishing methods.•Cab Structures, Sleeper Boxes, Body Panels and Structural Components. We utilize a wide range of manufacturing processes to produce ourcab structures, sleeper boxes, body panels and structural components and utilize robotic and manual welding techniques in the assembly ofthese products. We have facilities with large capacity, fully automated E-coat paint priming systems thereby allowing us to provide ourcustomers with a paint-ready cab product. Due to their high cost, full body E-coat systems, such as ours, are rarely found outside of themanufacturing operations of the major OEMs.•Mirrors, Wipers and Controls. We manufacture our mirrors, wipers and controls utilizing a variety of manufacturing processes and techniques.Our mirrors, wipers and controls are primarily assembled utilizing semi-automatic work cells, electronically tested and then packaged.•Electric Wire Harnesses and Panel Assemblies. We utilize several manufacturing techniques to produce our electric wire harnesses and panelassemblies. Our processes, manual and automated, are designed to produce a wide range of wire harnesses and panel assemblies in short timeframes. Our wire harnesses and panel assemblies are electronically and hand tested.We have a broad array of processes to enable us to meet our OEM customers’ styling and cost requirements. The vehicle cab is the most significant andappealing aspect to the operator of the vehicle; each commercial vehicle OEM therefore has unique requirements as to feel, appearance and features.The end markets for our products can be highly specialized and our customers frequently request modified products in low volumes within an expediteddelivery timeframe. As a result, we primarily utilize flexible manufacturing cells at our production facilities. Manufacturing cells are clusters of individualmanufacturing operations and work stations. This provides flexibility by allowing efficient changes to the number of operations each operator performs.When compared to the more traditional, less flexible assembly line process, cell manufacturing allows us to better maintain our product output consistentwith our OEM customers’ requirements and minimize the level of inventory.When an end-user buys a commercial vehicle, the end-user may specify the seat and other features for that vehicle. Because our Seats are unique, ourmanufacturing facilities have significant complexity which we manage by building in sequence. We build our Seats as orders are received, and the Seats aredelivered to our customer’s rack in the sequence in which vehicles come down the assembly line. We have systems in place that allow us to provide completecustomized interior kits in boxes that are delivered in sequence. Sequencing reduces our cost of production because it eliminates warehousing costs andreduces waste and obsolescence, offsetting any increased labor costs. Several of our manufacturing facilities are strategically located near our customers’assembly plants, which facilitates this process and minimizes shipping costs.We employ just-in-time manufacturing and sourcing in our operations to meet customer requirements for faster deliveries and to minimize our need to carrysignificant inventory levels. We utilize material systems to manage inventory levels and, in certain locations, we have inventory delivered as often as twotimes per day from a nearby facility based on the previous day’s order, which reduces the need to carry excess inventory at our facilities.9Table of ContentsWithin our cyclical industries, we strive to maintain a certain portion of temporary labor to improve our ability to flex our costs and throughput as requiredby fluctuating customer demand. We engage our core employees to assist in making our processes efficient.SeasonalityOEMs close their production facilities around holidays or when demand drops, reducing work days. Our cost structure, to the extent it is variable, provides uswith some flexibility during these periods.Our Supply AgreementsOur supply agreements generally provide for fixed pricing but do not require us to purchase any specified quantities. Normally we do not carry inventories ofraw materials or finished products in excess of those reasonably required to meet production and shipping schedules, as well as service requirements. Steel,aluminum, petroleum-based products, copper, resin, foam, fabrics, wire and wire components comprise the most significant portion of our raw material costs.We typically purchase steel, copper and petroleum-based products at market prices that are fixed over varying periods of time. Due to the volatility in pricingover the last several years, we use methods such as market index pricing and competitive bidding to assist in reducing our overall cost. We strive to align ourcustomer pricing and material costs to minimize the impact of steel, copper and petrochemical price fluctuations. Certain component purchases and suppliersare directed by our customers, so we generally will pass through directly to the customer any cost changes from these components. We generally are notdependent on a single supplier or limited group of suppliers for our raw materials.Our Customer ContractsOur OEM customers generally source business to us pursuant to written contracts, purchase orders or other firm commitments (“Commercial Arrangements”)with terms of price, quality, technology and delivery. Awarded business generally covers the supply of all or a portion of a customer’s production and servicerequirements for a particular product program rather than the supply of a specific quantity of products. In general, these Commercial Arrangements providethat the customer can terminate them if we do not meet specified quality, delivery and cost requirements. Although these Commercial Arrangements may beterminated at any time by our customers (but not by us), such terminations have historically been minimal and have not had a material impact on our resultsof operations. Because we produce products for a broad cross section of vehicle models, we are not overly reliant on any one vehicle model.Our Commercial Arrangements with our OEM customers may provide for an annual prospective productivity cost reduction. These productivity costreductions are generally calculated on an annual basis as a percentage of the previous year’s purchases by each customer. Historically, most of these costreductions have been offset by internal cost reductions and through the assistance of our supply base, although no assurances can be given that we will beable to achieve such reductions in the future. The cost reduction is achieved through engineering changes, material cost reductions, logistics savings,reductions in packaging cost, labor efficiencies and other productivity actions.Our sales and marketing efforts are designed to create customer awareness of our engineering, design and manufacturing capabilities. Our sales and marketingstaff work closely with our design and engineering personnel to prepare the materials used for bidding on new business, as well as to provide a consistentinterface between us and our key customers. We have sales and marketing personnel located in every major region in which we operate. From time to time, weparticipate in industry trade shows and advertise in industry publications.Our principal customers for our aftermarket sales include OEM dealers and independent wholesale or retail distributors. Our sales and marketing efforts arefocused on support of these two distribution chains, as well as participation in industry trade shows and direct contact with major fleets.CompetitionWithin each of our principal product categories we compete with a variety of independent suppliers and with OEMs’ in-house operations, primarily on thebasis of price, breadth of product offerings, product quality, technical expertise, development capability, product delivery and product service. A summary ofour primary competitors is set forth below:Seats and Seating Systems. We believe we have a strong market position supplying Seats to the North American MD/HD Truck market. Our primarycompetitors in the North American commercial vehicle market include Sears Manufacturing Company, Isringhausen, Grammer AG and Seats, Inc. Our primarycompetitors in the European commercial vehicle market include Grammer AG and Isringhausen; and in the Asia-Pacific region include Isrihuatai andTiancheng (in China); and Harita and Pinnacle (in India).10Table of ContentsTrim Systems and Components. We believe we have a good position supplying Trim products to the North American MD/HD Truck market. We facecompetition from a number of different competitors with respect to each of our trim system products and components. Our primary competitors are ConMet,International Automotive Components, Superior, Blachford Ltd. and Grupo Antolin.Cab Structures, Sleeper Boxes, Body Panels and Structural Components. We are a supplier of cab structural components, cab structures, sleeper boxes andbody panels to the North American MD/HD Truck market. Our primary competitors in this category are Magna, International Equipment Solutions (formerlyCrenlo), Worthington Industries (formerly Angus Palm), McLaughlin Body Company and Defiance Metal Products.Mirrors, Wipers and Controls. We are a supplier of wiper systems and mirrors to the North American MD/HD Truck market. We also sell wiper systems tothe construction and agriculture market in Europe. We face competition from various competitors in this category. Our principal competitors for mirrors areHadley, Retrac, and Lang-Mekra and our principal competitors for wiper systems are Doga, Wexco, Trico and Valeo.Electric Wire Harnesses and Panel Assemblies. We supply a wide range of electric wire harnesses and panel assemblies used in various commercial andother vehicles. Our primary competitors for wire harnesses include large diversified suppliers such as Delphi Automotive PLC, Leoni, Nexans SA, Motherson-Sumi, St. Clair and Electrical Components International as well as many smaller companies.BacklogOur customers may place annual blanket purchase orders that do not obligate them to purchase any specific or minimum amount of products from us until arelease is issued by the customer under the blanket purchase order. Releases are typically placed 30 to 90 days prior to required delivery and may be canceledat any time within agreed terms. We do not believe that our backlog of expected product sales covered by firm purchase orders is a meaningful indicator offuture sales since orders may be rescheduled or canceled.EmployeesAs of December 31, 2017, we had approximately 8,250 permanent employees, of whom approximately 14% were salaried and the remainder were hourly. Asof December 31, 2017, approximately 56% of the employees in our North American operations were unionized, with the majority of union-representedpersonnel based in Mexico. On January 24, 2017, workers in our Shadyside, Ohio facility ratified a Closure Effects Agreement between Mayflower VehicleSystems, LLC and the United Steel, Paper and Forestry, Rubber, Manufacturing and Energy, Allied Industrial and Service Workers International Union and itsaffiliated Local Union 9419. Production ceased in that facility in July 2017 and no hourly employees remained in the facility as of year-end. Approximately64% of our European, Asian and Australian operations were represented by shop steward committees.We did not experience any material strikes, lockouts or work stoppages during 2017 and consider our relationship with our employees to be satisfactory. Onan as-needed basis during peak periods we utilize contract and temporary employees. During periods of weak demand, we respond to reduced volumesthrough flexible scheduling, furloughs and/or reductions in force as necessary. Environmental MattersWe are subject to foreign, federal, state and local laws and regulations governing the protection of the environment and occupational health and safety,including laws regulating air emissions, wastewater discharges, and the generation, storage, handling, use and transportation of hazardous materials; theemission and discharge of hazardous materials into the soil, ground or air; and the health and safety of our colleagues. We are also required to obtain permitsfrom governmental authorities for certain of our operations. We cannot give assurances that we are, or have been, in complete compliance with suchenvironmental and safety laws, regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwisesanctioned by regulators. In some instances, such a fine or sanction could have a material adverse effect on us. We are also subject to laws imposing liabilityfor the cleanup of contaminated property. Under these laws, we could be held liable for costs and damages relating to contamination at our past or presentfacilities and at third-party sites to which we sent waste containing hazardous substances. The amount of such liability could be material.Certain of our operations generate hazardous substances and wastes. If a release of such substances or wastes occurs at or from our properties, or at or from anyoffsite disposal location to which substances or wastes from our current or former operations were taken, or if contamination is discovered at any of ourcurrent or former properties, we may be held liable for the cost of cleanup and for any other response by governmental authorities or private parties, togetherwith any associated fines, penalties or damages. In most jurisdictions, this liability would arise whether or not we had complied with environmental lawsgoverning the handling of hazardous substances or wastes.11Table of ContentsGovernment RegulationsNew emissions regulations were approved in 2016 by US regulators impacting MD/HD Truck manufacturers. The regulations require manufacturers to cutgreenhouse gas emissions by 25 percent by 2027. Other countries are implementing clean air measures to reduce air pollution. For example, China's Ministryof Environment implemented new standards applicable during 2017 for Stage V vehicles, including light gasoline-powered vehicles, diesel-poweredpassenger vehicles and heavy diesel-powered vehicles manufactured and sold in China.Under a California law known as Proposition 65, if the state has determined that a substance causes cancer or harms human reproduction, a warning mustappear on any product sold in the state that exposes consumers to that substance. The state maintains lists of these substances and periodically adds othersubstances to them. Certain of our products may be subject to Proposition 65 and therefore cause us to have to provide warnings on the products in Californiabecause it does not provide for any generally applicable quantitative threshold below which the presence of a listed substance is exempt from the warningrequirement. Consequently, the detection of even a trace amount of a listed substance can subject an affected product to the requirement of a warning label.To the extent that current or future governmental regulation has a negative impact on the demand for commercial vehicles, our business, financial conditionor results of operations could be adversely affected.AVAILABLE INFORMATIONWe maintain a website on the Internet at www.cvgrp.com. We make available free of charge through our website, by way of a hyperlink to a third-partySecurities Exchange Commission (SEC) filing website, our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K andamendments to those reports electronically filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934. Such information is available assoon as such reports are filed with the SEC. Additionally, our Code of Ethics may be accessed within the Investor Relations section of our website.Information found on our website is not part of this Annual Report on Form 10-K or any other report filed with the SEC.EXECUTIVE OFFICERS OF REGISTRANTThe following table sets forth certain information with respect to our executive officers as of March 12, 2018:NameAge Principal Position(s)Patrick E. Miller50 President, Chief Executive Officer, DirectorC. Timothy Trenary61 Executive Vice President and Chief Financial OfficerGreg R. Boese61 Senior Vice President and Managing Director of Global Truck and BusDale M. McKillop60 Senior Vice President and Managing Director of Global Truck and BusThe following biographies describe the business experience of our executive officers:Patrick E. Miller has served as President and Chief Executive Officer and Director since November 2015. Mr. Miller, who most recently was President of theCompany’s Global Truck & Bus Segment, has been with the Company since 2005. During this time, he served in the capacity of Senior Vice President &General Manager of Aftermarket; Senior Vice President of Global Purchasing; Vice President of Global Sales; Vice President & General Manager of NorthAmerican Truck and Vice President & General Manager of Structures. Prior to joining the Company, Mr. Miller held engineering, sales, and operationalleadership positions with Hayes Lemmerz International, Alcoa, Inc. and ArvinMeritor. He holds a Bachelor of Science in Industrial Engineering from PurdueUniversity and a Masters of Business Administration from the Harvard University Graduate School of Business.C. Timothy Trenary has served as Executive Vice President and Chief Financial Officer since October 2013. Mr. Trenary served as Executive Vice Presidentand Chief Financial Officer of ProBuild Holdings LLC, a privately held North American supplier of building materials, from 2010 to 2013. Prior to that, Mr.Trenary served as Senior Vice President & Chief Financial Officer of EMCON Technologies Holdings Limited, a privately held global automotive partssupplier, from 2008 to 2010; and as Vice President and Chief Financial Officer of DURA Automotive Systems, Inc., a publicly held global automotive partssupplier, from 2007 to 2008. He holds a Bachelor of Accounting with Honors from Michigan State University and a Masters of Business Administration withHonors from the University of Detroit Mercy. Mr. Trenary is a certified public accountant with registered status in Michigan.Greg R. Boese was promoted to Senior Vice President and Managing Director of Global Truck and Bus in February 2016. Mr. Boese, who most recently wasVice President of Product Line Management for Global Truck and Bus Seating, has been with the Company since 2005 when he joined the Company with theacquisition of Mayflower Vehicle Systems. Mr. Boese started his12Table of Contentstenure with Mayflower Vehicle Systems in 1995 and held positions of increasing responsibility including Vice President of Sales and Marketing. Prior tojoining Mayflower Vehicle Systems, Mr. Boese held various senior leadership positions in sales, marketing, and operational management with a division ofMasco Industries. He holds a Bachelor of Science degree in Business Management from Tri State University, Angola, Indiana. Dale M. McKillop was promoted to Senior Vice President and Managing Director of Global Truck and Bus in February 2016. Mr. McKillop, who mostrecently was Vice President and General Manager of the Company’s Global Truck & Bus Trim and Structures division, has been with the Company since2005 when he joined the Company with the acquisition of Mayflower Vehicle Systems. Mr. McKillop has held positions of increasing responsibility with thecompany including Managing Director - Structures and Aftermarket, Managing Director - Structures, Director of Operations Trim and Structures, and PlantManager. Prior to joining Mayflower Vehicle Systems, Mr. McKillop held engineering positions with Pullman Standard from 1978 to 1982. Mr. McKillopholds a Bachelor of Science degree in Business Administration from Gardner Webb University.Item 1A.Risk FactorsYou 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 adverselyaffected. In such case, the trading price of our common stock could decline and you may lose all or part of your investment.Our results of operations could be materially and adversely affected by downturns in the U.S. and global economy which are naturally accompanied byrelated declines in freight tonnage hauled and in infrastructure development and other construction projects.Our results of operations are directly impacted by changes in the U.S. and global economic conditions which are accompanied by related declines in freighttonnage hauled in infrastructure development and other construction projects because, among other things:•Demand for our MD/HD truck products is generally dependent on the number of new MD/HD truck commercial vehicles manufactured in NorthAmerica. Historically, the demand for MD/HD truck commercial vehicles has declined during periods of weakness in the North Americaneconomy.•Demand for our construction products is also dependent on the overall vehicle demand for new commercial vehicles in the global constructionequipment market.•Demand in the medium and heavy construction vehicle market, which is the market in which our GCA products are primarily used, is typicallyrelated to the level of larger-scale infrastructure development projects.•Demand in the light construction equipment market is typically related to certain economic conditions such as the level of housingconstruction and other smaller-scale developments and projects.If we experience periods of low demand for our products in the future, it could have a negative impact on our revenues, operating results and financialposition.Volatility and cyclicality in the commercial vehicle market could adversely affect us.Our profitability depends in part on the varying conditions in the commercial vehicle market. This market is subject to considerable volatility as it moves inresponse to cycles in the overall business environment and is particularly sensitive to the industrial sector of the economy, which generates a significantportion of the freight tonnage hauled. Sales of commercial vehicles have historically been cyclical, with demand affected by such economic factors asindustrial production, construction levels, demand for consumer durable goods, interest rates and fuel costs.Historically, general weakness in the global economy, but especially the North American economy, and corresponding decline in the need for commercialvehicles has contributed to a downturn in commercial vehicle production. Demand for commercial vehicles depends to some extent on economic and otherconditions in a given market and the introduction of new vehicles and technologies. The yearly demand for commercial vehicles may increase or decreasemore than overall gross domestic product in markets we serve. Downturns historically have had a material adverse effect on our business. If unit production ofcommercial vehicles declines in the future it may materially and adversely affect our business and results of operations. Conversely, upswings in the globaleconomy may result in a sharp acceleration in commercial vehicle production. A sharp acceleration in commercial vehicle production may adversely affectour ability to convert the incremental revenue into operating income efficiently.Our operating results, revenues and expenses may fluctuate significantly from quarter-to-quarter or year-to-year, which could have an adverse effecton the market price of our common stock.13Table of ContentsOur operating results, revenues and expenses have in the past varied and may in the future vary significantly from quarter-to-quarter or year-to-year. Thesefluctuations could have an adverse effect on the market price of our common stock.Our operating results may fluctuate as a result of these and other events and factors:•the size, timing, volume and execution of significant orders and shipments;•changes in the terms of our sales contracts;•the timing of new product announcements by us and our competitors;•changes in our pricing policies or those of our competitors;•market acceptance of new and enhanced products;•announcement of technological innovations or new products by us or our competitors;•the length of our sales cycles;•conditions in the commercial vehicle industry;•changes in our operating expenses;•personnel changes;•new business acquisitions;•uncertainty in geographic regions;•cyber-attacks;•currency and interest rate fluctuations;•uncertainty with respect to the North American Free Trade Agreement;•union actions; and•seasonal factors.We base our operating expense budgets in large part on expected revenue trends. However, certain of our expenses are relatively fixed and as such we may beunable to adjust expenses quickly enough to offset any unexpected revenue shortfall. Accordingly, any significant change in revenue may cause significantvariation in operating results in any quarter or year.It is possible that in one or more future quarters or years, our operating results may be below the expectations of public market analysts and investors and mayresult in changes in analysts’ estimates. In such events, the trading price of our common stock may be adversely affected.In the past, companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation. If webecome involved in securities class action litigation in the future, it could result in substantial costs and diversion of management attention and resources,thus harming our business.Our common stock has historically had a low trading volume and, as a result, any sale of a significant number of shares may depress the trading priceof our stock; shareholders may be unable to sell their shares above the purchase price.Our common stock is traded on the NASDAQ Global Select Market under the symbol “CVGI.” The trading volume of our common stock has historically beenlimited as compared to common stock of a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous saleswithout an adverse effect on share prices. Because of the limited trading volume, holders of our securities may not be able to sell quickly any significantnumber of such shares, and any attempted sale of a large number of our shares may have a material adverse impact on the price of our common stock.Additionally, because of the limited number of shares being traded, the price per share is subject to volatility and may continue to be subject to rapid priceswings in the future that may result in shareholders’ inability to sell their common stock at or above purchase price.We incur restructuring and impairment charges periodically as we continue to evaluate our portfolio of assets and identify opportunities to restructureour business in an effort to optimize our cost structure.As we continue to evaluate our manufacturing footprint to improve our cost structure and remove excess, underperforming assets, or assets that no longer fitour goals, we incur restructuring charges periodically to close facilities, such as, lease termination charges, severance charges and impairment charges ofleasehold improvements and/or machinery and equipment.Also, if we decide to close or consolidate facilities, we may face execution risks which could adversely affect our ability to serve our customers and couldlead to loss of business adversely affecting our business, results of operations and financial condition.We may be unable to successfully implement our business strategy and, as a result, our businesses and financial position and results of operations couldbe materially and adversely affected.14Table of ContentsOur ability to achieve our business and financial objectives is subject to a variety of factors, many of which are beyond our control. For example, we may notbe successful in implementing our strategy if unforeseen factors emerge diminishing the expected growth in the commercial vehicle markets we supply, or weexperience increased pressure on our margins. In addition, we may not succeed in integrating strategic acquisitions, and our pursuit of additional strategicacquisitions may lead to resource constraints, which could have a negative impact on our ability to meet customers’ demands, thereby adversely affecting ourrelationships with those customers. As a result of such business or competitive factors, we may decide to alter or discontinue aspects of our business strategyand may adopt alternative or additional strategies. Any failure to successfully implement our business strategy could materially and adversely affect ourbusiness, results of operations and growth potential.We are subject to certain risks associated with our foreign operations.We have operations in the United Kingdom, Czech Republic, Ukraine, Belgium, China, Australia, Mexico and India, which accounted in the aggregate forapproximately 26%, 25% and 23% of our total revenues for the years ended December 31, 2017, 2016 and 2015, respectively. There are certain risks inherentin our international business activities including, but not limited to:•the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems;•foreign customers, who may have longer payment cycles than customers in the U.S.;•material foreign currency exchange rate fluctuations affecting our ability to match revenue received with costs paid in the same currency;•tax rates in certain foreign countries, which may exceed those in the U.S., withholding requirements or the imposition of tariffs, exchangecontrols or other restrictions, including restrictions on repatriation, on foreign earnings;•intellectual property protection difficulties;•general economic and political conditions, along with major differences in business culture and practices, including the challenges of dealingwith business practices that may impact the company’s compliance efforts, in countries where we operate;•exposure to local social unrest, including any resultant acts of war, terrorism or similar events;•the difficulties associated with managing a large organization spread throughout various countries; and•complications in complying with a variety of laws and regulations related to doing business with and in foreign countries, some of which mayconflict with U.S. law or may be vague or difficult to comply with.Additionally, our international business activities are also subject to risks arising from violations of U.S. laws such as the U.S. Foreign Corrupt Practices Actand similar anti-bribery laws in other jurisdictions, and various export control and trade embargo laws and regulations, including those which may requirelicenses or other authorizations for transactions relating to certain countries and/or with certain individuals identified by the U.S. government. If we fail tocomply with applicable laws and regulations, we could suffer civil and criminal penalties that could materially and adversely affect our results of operationsand financial condition.As we continue to expand our business on a global basis, we are increasingly exposed to these risks. Our success will be dependent, in part, on our ability toanticipate and effectively manage these and other risks associated with foreign operations. These and other factors may have a material adverse effect on ourinternational operations, business, financial condition and results of operations.Significant changes to international trade regulations could adversely affect our results of operations.Our business benefits from current free trade agreements and other duty preference programs, including the North American Free Trade Agreement(“NAFTA”). The Trump Administration has indicated that it may propose significant changes with respect to a variety of issues, including NAFTA, otherinternational trade agreements, import and export regulations, and tariffs and customs duties, which have increased uncertainty regarding the future ofexisting international trade regulations. The imposition of tariffs on the products we manufacture and sell could have a material and adverse impact on ourbusiness, financial condition and results of operations. Additionally, if the Trump Administration or Congress takes action to withdraw from or materiallymodify NAFTA, our business, financial condition and results of operations could be adversely affected.We have invested substantial resources in markets where we expect growth and we may be unable to timely alter our strategies should such expectationsnot be realized.Our future growth is dependent in part on our making the right investments at the right time to support product development and manufacturing capacity inareas where we can support our customer base. We have identified the Asia-Pacific region, specifically China and India, as key markets likely to experiencesubstantial growth in our market share, and accordingly have made and expect to continue to make substantial investments, both directly and throughparticipation in various partnerships and joint ventures, in numerous manufacturing operations, technical centers and other infrastructure to supportanticipated growth in those regions. If15Table of Contentswe are unable to maintain, deepen existing and develop additional customer relationships in these regions, we may not only fail to realize expected rates ofreturn on our existing investments, but we may incur losses on such investments and be unable to timely redeploy the invested capital to take advantage ofother markets, potentially resulting in lost market share to our competitors. We cannot guarantee that we will be successful in leveraging our capabilities intonew markets and thus, in meeting the needs of these new customers and competing favorably in these new markets. Our results will also suffer if these regionsdo not grow as quickly as we anticipate.We may be unable to complete strategic acquisitions or we may encounter unforeseen difficulties in integrating acquisitions.We may pursue acquisition targets that will allow us to continue to expand into new geographic markets, add new customers, provide new products,manufacturing and service capabilities and increase penetration with existing customers. However, we expect to face competition for acquisition candidates,which may limit the number of our acquisition opportunities and may lead to higher acquisition prices. Moreover, acquisition of businesses may requireadditional debt and/or equity financing, perhaps resulting in additional leverage and/or shareholder dilution. The covenants relating to our debt instrumentsmay further limit our ability to complete acquisitions. There can be no assurance we will find attractive acquisition candidates or successfully integrateacquired businesses into our existing business. If the expected synergies from acquisitions do not materialize or we fail to successfully integrate such newbusinesses into our existing businesses, our results of operations could also be materially and adversely affected.The agreement governing our senior secured revolving credit facility and the agreement governing our senior secured term loan credit facility containcovenants that may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.If we are unable to comply with these covenants, our business, results of operations and liquidity could be materially and adversely affected.Our senior secured revolving and term loan credit facilities require us to maintain certain financial ratios and to comply with various operational and othercovenants. If we do not comply with those covenants we would be precluded from borrowing under the revolving credit facility, which could have a materialadverse effect on our business, financial condition and liquidity. If we are unable to borrow under our revolving credit facility, we will need to meet ourcapital requirements using other sources; however, alternative sources of liquidity may not be available on acceptable terms. In addition, if we fail to complywith the covenants set forth in our credit facilities the lenders thereunder could declare an event of default and cause all amounts outstanding thereunder tobe due and payable immediately. We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstandingcredit facilities or other debt instruments we may have in place from time to time, either upon maturity or if accelerated, upon an event of default, or that wewould be able to refinance or restructure the payments on the credit facilities or such other debt instruments on acceptable terms.In addition, the agreements governing the revolving and term loan credit facilities contain covenants that, among other things, restrict our ability to:•incur liens;•incur or assume additional debt or guarantees or issue preferred stock;•pay dividends or repurchases with respect to capital stock;•prepay, or make redemptions and repurchases of, subordinated debt;•make loans and investments;•engage in mergers, acquisitions, asset sales, sale/leaseback transactions and transactions with affiliates;•place restrictions on the ability of subsidiaries to pay dividends or make other payments to the issuer;•change the business conducted by us or our subsidiaries; and•amend the terms of subordinated debt.Our substantial amount of indebtedness may adversely affect our cash flow and our ability to operate our business, remain in compliance with debtcovenants and make payments on our indebtedness.The aggregate amount of our outstanding indebtedness was $172.8 million as of December 31, 2017. Our indebtedness, combined with our lease and otherfinancial obligations and contractual commitments could have other important consequences to our stockholders, including:•making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the revolving credit facility and our otherdebt instruments, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictivecovenants, could result in an event of default under the revolving credit facility and the governing documents of our debt instruments;16Table of Contents•the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respectof our indebtedness;•making us more vulnerable to adverse changes in general economic, industry and competitive conditions;•require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availabilityof our cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes;•limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;•placing us at a competitive disadvantage compared to our competitors that have less debt; and•limiting our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, orexecution of our business strategy or other purposes.Any of these factors could materially and adversely affect our business, financial condition and results of operations. Our ability to make payments on ourindebtedness depends on our ability to generate cash in the future. If we do not generate sufficient cash flow to meet our debt service and working capitalrequirements, we may need to seek additional financing or sell assets. This may make it more difficult for us to obtain financing on terms that are acceptableto us, or at all. Without any such financing, we could be forced to sell assets to make up for any shortfall in our payment obligations under unfavorablecircumstances. If necessary, we may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations.Economic conditions and disruptions in the credit and financial markets could have an adverse effect on our business, financial condition and results ofoperations.The financial markets experienced, in the not too distant past, a period of unprecedented turmoil, including the bankruptcy, restructuring or sale of certainfinancial institutions and the intervention of the U.S. federal government. Disruptions in the credit and financial markets may have a material adverse effecton our liquidity and financial condition if our ability to borrow money to finance our operations were to be impaired. A crisis in the financial markets mayalso have a material adverse impact on the availability and cost of credit in the future. Our ability to pay our indebtedness will depend on our futureperformance, which will be affected by, among other things, prevailing economic conditions. Tightening of credit in financial markets may also adverselyaffect the ability of our customers to obtain financing for significant truck orders and the ability of our suppliers to provide us with sufficient raw materials forour products, either of which could adversely affect our business and results of operations.Our inability to compete effectively in the highly competitive commercial vehicle component supply industry could result in lower prices for ourproducts, loss of market share and reduced gross margins, which could have an adverse effect on our revenues and operating results.The commercial vehicle component supply industry is highly competitive. Some of our competitors are companies that are larger and have greater financialand other resources than we do. In some cases, we compete with divisions of our OEM customers. Our products primarily compete on the basis of price,breadth of product offerings, product quality, technical expertise and development capability, product delivery and product service. Increased competitionmay lead to price reductions resulting in reduced gross margins and loss of market share.Current and future competitors may make strategic acquisitions or establish cooperative relationships among themselves or with others, foresee the course ofmarket development more accurately than we do, develop products that are superior to our products, produce similar products at lower cost than we can, oradapt more quickly to new technologies, industry or customer requirements. By doing so, they may enhance their ability to meet the needs of our customersor potential future customers more competitively. These developments could limit our ability to obtain revenues from new customers or maintain existingrevenues from our customer base. We may not be able to compete successfully against current and future competitors and our failure to do so may have amaterial adverse effect on our business, operating results and financial condition.Our inability to successfully achieve operational efficiencies could result in the incurrence of additional costs and expenses that could adversely affectour reported earnings.As part of our business strategy, we continuously seek ways to lower costs, improve manufacturing efficiencies and increase productivity in our existingoperations and intend to apply this strategy to those operations acquired through acquisitions. We may be unsuccessful in achieving these objectives whichcould adversely affect our operating results and financial condition.Additionally, aspects of the data upon which the company’s business strategy is based may be incomplete or unreliable, which could lead to errors in thestrategy, which in turn could adversely affect the company’s performance. Also, not all business strategy can be based on data, and to the extent that it isbased on assumptions and judgments that are untested, then it could be unsound and thereby lead to performance below expectations.17Table of ContentsWe may be unable to successfully introduce new product and, as a result, our businesses and financial position and results of operations could bematerially and adversely affected.Product innovations have been and will continue to be a significant part of our business strategy. We believe it is important we continue to meet ourcustomers’ demands for product innovation, improvement and enhancement, including the continued development of new-generation products, and designimprovements and innovations that improve the quality and efficiency of our products. However, such development will require us to continue to invest inresearch and development and sales and marketing. We are also subject to the risks generally associated with product development, including lack of marketacceptance, delays in product development and failure of products to operate properly. We may, as a result of these factors, be unable to meaningfully focuson product innovation as a strategy and may therefore be unable to meet our customers’ demands for product innovation, which could have a materialadverse effect on our business, operating results and financial condition.Our products may be rendered less attractive by changes in competitive technologies, including the introduction of autonomous vehicles.Changes in competitive technologies, including the introduction of autonomous vehicles, may render certain of our products less attractive. Our ability toanticipate changes in technology and to successfully develop and introduce new and enhanced products on a timely basis will be a significant factor in ourability to remain competitive. There can be no assurance that we will be able to achieve the technological advances that may be necessary for us to remaincompetitive. We are also subject to the risks generally associated with new product introductions and applications, including lack of market acceptance,delays in product development and failure of products to operate properly, all of which could adversely affect our business, results of operations and growthpotential.Our customer base is concentrated and the loss of business from a major customer or the discontinuation of particular commercial vehicle platformscould reduce our revenues.Sales to A.B. Volvo, Daimler Truck and PACCAR accounted for approximately 17%, 16% and 10%, respectively, of our revenue in 2017, and our ten largestcustomers accounted for approximately 75% of our revenue in 2017. Even though we may be selected as the supplier of a product by an OEM for a particularvehicle, 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 beaccordingly reduced. In addition, the OEM may terminate its purchase orders with us at any time. The loss of any of our largest customers or the loss ofsignificant business from any of these customers could have a material adverse effect on our business, financial condition and results of operations.Our profitability could be adversely affected if the actual production volumes for our customers’ vehicles are significantly lower than expected.We incur costs and make capital expenditures based in part upon estimates of production volumes for our customers’ vehicles. While we attempt to establisha price for our components and systems that will compensate for variances in production volumes, if the actual production of these vehicles is significantlyless than anticipated, our gross margin on these products would be adversely affected. We enter into agreements with our customers at the beginning of agiven platform’s life to supply products for that platform. Once we enter into such agreements, fulfillment of the supply requirements is our obligation for theentire production life of the platform, with terms generally ranging from five to seven years, and we have somewhat limited provisions to terminate suchcontracts. We may become committed to supply products to our customers at selling prices that are not sufficient to cover the direct cost to produce suchproducts. We cannot predict our customers’ demands for our products. If customers representing a significant amount of our revenues were to purchasematerially lower volumes than expected, or if we are unable to keep our commitment under the agreements, it would have a material adverse effect on ourbusiness, financial condition and results of operations.Our major OEM customers may exert significant influence over us.The commercial vehicle component supply industry has traditionally been highly fragmented and serves a limited number of large OEMs. As a result, OEMshave historically had a significant amount of leverage over their outside suppliers. Generally, our contracts with major OEM customers provide for an annualproductivity cost reduction. Historically, we have been able to generally mitigate these customer-imposed cost reduction requirements through productdesign changes, increased productivity and similar programs with our suppliers. However, if we are unable to generate sufficient production cost savings inthe future to offset these cost reductions, our gross margin and profitability would be adversely affected. Additionally, we generally do not have clauses inour customer agreements that guarantee that we will recoup the design and development costs that we incurred to develop a product.18Table of ContentsIn other cases, we share the design costs with the customer and thereby have some risk that not all the costs will be covered if the project does not go forwardor if it is not as profitable as expected.In addition, changes in OEMs’ purchasing policies or payment practices could have an adverse effect on our business. Furthermore, due to the cost focus ofour major customers, we have been, and expect to continue to be, requested to reduce prices as part of our initial business quotations and over the life ofvehicle platforms we have been awarded. We cannot be certain that we will be able to generate cost savings and operational improvements in the future thatare sufficient to offset price reductions requested by existing customers and necessary to win additional business.Demand for our products could also be materially reduced if our customers vertically integrate their operations in a significant manner, which would have amaterial and adverse impact on our business and results of operations.If we are unable to obtain raw materials at reasonable prices, it could adversely impact our results of operations and financial condition.Numerous raw materials are used in the manufacture of our products. Steel, aluminum, petroleum-based products, copper, resin, foam, fabrics, wire and wirecomponents account for the most significant portion of our raw material costs. Although we currently maintain alternative sources for most raw materials, ourbusiness is subject to the risk of price increases and periodic delays in delivery. We may be assessed surcharges on certain purchases of steel, copper and otherraw materials. If we are unable to purchase certain raw materials required for our operations for a significant period of time, our operations would be disrupted,and our results of operations would be adversely affected. In addition, if we are unable to pass on the increased costs of raw materials to our customers, thiscould adversely affect our results of operations and financial condition. Furthermore, in the past, we have experienced significant increases and fluctuationsin raw materials pricing; and future changes in the prices of raw materials or utilities could have a material adverse impact on us without proportionaterecovery from our customers.We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or delay production.We, as with other component manufactures in the commercial vehicle industry, sometimes ship products to the customers throughout the world so they aredelivered on a “just-in-time” basis in order to maintain low inventory levels. Our suppliers (external suppliers as well as our own production sites) alsosometimes use a similar method. This just-in-time method makes the logistics supply chain in our industry very complex and very vulnerable to disruptions.The potential loss of one of our suppliers or our own production sites could be caused by a myriad of potential problems, such as closures of one of our ownor one of our suppliers’ plants or critical manufacturing lines due to strikes, mechanical breakdowns, electrical outages, fires, explosions, political upheaval,as well as logistical complications due to weather, volcanic eruptions, earthquakes, flooding or other natural disasters, mechanical failures, delayed customsprocessing and more. Additionally, as we expand in growth markets, the risk for such disruptions is heightened. The lack of even a small singlesubcomponent necessary to manufacture one of our products, for whatever reason, could force us to cease production, possibly for a prolonged period.Similarly, a potential quality issue could force us to halt deliveries while we validate the products. Even where products are ready to be shipped or have beenshipped, delays may arise before they reach our customer. Our customers may halt or delay their production for the same reason if one of their other suppliersfails to deliver necessary components. This may cause our customers to suspend their orders or instruct us to suspend delivery of our products, which mayadversely affect our financial performance.When we cease timely deliveries, we have to absorb our own costs for identifying and solving the root cause problem as well as expeditiously producingreplacement components or products. Generally, we must also carry the costs associated with “catching up,” such as overtime and premium freight.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. Theselosses and expenses could be very significant and may 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 material claims ofcompensation. Where a customer halts production because of another supplier failing to deliver on time, we may not be fully compensated, if at all, andtherefore our business and financial results could be materially and adversely affected.Security breaches and other disruptions could compromise our information systems and expose us to liability, which could cause our business andreputation to suffer.In the ordinary course of our business, we collect and store sensitive data, including intellectual property, financial information, our proprietary businessinformation and that of our customers, suppliers and business partners, and personally identifiable information of our customers and employees, in our datacenters and on our networks. The secure processing, maintenance and19Table of Contentstransmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology andinfrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfunction, malfeasance or other disruptions. Like mostcompanies, our systems are under attack on a routine basis. At times there are breaches of our security measures. Breaches can and have, at times,compromised our networks and the associated applications and information residing on them. Any such access, disclosure or other loss of information couldresult in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations and theservices we provide to customers, damage our reputation, and cause a loss of confidence in our products and services, which could adversely affect ourbusiness and our results of operations.Equipment failures, delays in deliveries or catastrophic loss at any of our facilities could lead to production or service curtailments or shutdowns.We manufacture or assemble our products at facilities in North America, Europe, Asia and Australia. An interruption in production or service capabilities atany of these facilities as a result of equipment failure or other reasons could result in our inability to produce our products. In the event of a stoppage inproduction at any of our facilities, even if only temporary, or if we experience delays as a result of events that are beyond our control, delivery times to ourcustomers could be severely affected. Any significant delay in deliveries to our customers could lead to increased returns or cancellations. Our facilities arealso subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions, violent weather conditions or acts of God. We may alsoexperience plant shutdowns or periods of reduced production as a result of equipment failure, delays in deliveries or catastrophic loss, which could have amaterial adverse effect on our business, results of operations and financial condition.Volatility in the commercial vehicle market could result from manmade and natural disasters and other global business disruptions.Natural disasters and other global business disruptions may disrupt the commercial vehicle supply chain and materially and adversely affect globalproduction levels in our industry. The impact from disasters resulting in wide-spread destruction may not be immediately apparent. It is particularly difficultto assess the impact of catastrophic losses on our suppliers and end customers, who themselves may not fully understand the impact of such events on theirbusinesses. Accordingly, there is no assurance our results of operations will not be materially affected as a result of the impact of future disasters.If we are unable to recruit or retain senior management and other skilled personnel, our business, operating results and financial condition could bematerially and adversely affected.Our operations depend to a large extent on the efforts of our senior management team as well as our ability to attract, train, integrate and retain highly skilledpersonnel. We seek to develop and retain an effective management team through the proper positioning of existing key employees and the addition of newmanagement personnel where necessary. Retaining personnel with the right skills at competitive wages can be difficult in certain markets in which we aredoing business, particularly those locations that are seeing much inbound investment and have highly mobile workforces. Additionally, attractingsufficiently well-educated and talented management, especially middle-management employees, in certain markets can be challenging.We may not be able to retain our current senior management and other skilled personnel or attain similarly skilled personnel in the future. If we lose seniormanagement or the services of our skilled workforce, or if we are unable to attract, train, integrate and retain the highly skilled personnel we need, ourbusiness, operating results and financial condition could be materially and adversely affected.We may be adversely impacted by labor strikes, work stoppages and other matters.As of December 31, 2017, approximately 56% of the employees in our North American operations were unionized, with the majority of union-representedpersonnel based in Mexico. We have experienced limited unionization efforts at certain of our other North American facilities from time to time. In addition,approximately 64% of our employees of our European, Asian and Australian operations were represented by a shop steward committee, which may limit ourflexibility in our relationship with these employees. We may encounter future unionization efforts or other types of conflicts with labor unions or ouremployees.Many of our OEM customers and their suppliers also have unionized work forces. Work stoppages or slow-downs experienced by OEMs or their othersuppliers could result in slow-downs or closures of assembly plants where our products are included in assembled commercial vehicles. In the event that oneor more of our customers or their suppliers experience a material work stoppage, such work stoppage could have a material adverse effect on our business.Provisions in our charter documents and Delaware law could discourage potential acquisition proposals, could delay, deter or prevent a change incontrol and could limit the price certain investors might be willing to pay for our stock.20Table of ContentsCertain provisions of our certificate of incorporation and by-laws may inhibit changes in control of our company not approved by our board of directors.These provisions include:•a prohibition on stockholder action through written consents;•a requirement that special meetings of stockholders be called only by the board of directors;•advance notice requirements for stockholder proposals and director nominations;•limitations on the ability of stockholders to amend, alter or repeal the by-laws; and•the authority of the board of directors to issue, without stockholder approval, preferred stock and common stock with such terms as the board ofdirectors may determine.We are also afforded the protections of Section 203 of the Delaware General Corporation Law, which would prevent us from engaging in a businesscombination with a person who becomes a 15% or greater stockholder for a period of three years from the date such person acquired such status unless certainboard or stockholder approvals were obtained. These provisions could limit the price that certain investors might be willing to pay in the future for shares ofour common stock.Our earnings may be adversely affected by changes to the carrying values of our tangible and intangible assets as a result of recording any impairmentcharges deemed necessary.We are required to perform impairment tests whenever events and circumstances indicate the carrying value of certain assets may not be recoverable.Significant or unanticipated changes in circumstances, such as the general economic environment, changes or downturns in our industry as a whole,termination of any of our customer contracts, restructuring efforts and general workforce reductions, may result in a charge for impairment that can materiallyand adversely affect our reported net income and our stockholders’ equity.We have taken, are taking, and may take future restructuring actions to realign and resize our production capacity and cost structure to meet current andprojected operational and market requirements. Charges related to these actions or any further restructuring actions may have a material adverse effect on ourresults of operations and financial condition. There can be no assurance that any current or future restructuring will be completed as planned or achieve thedesired results. The failure to complete restructuring as planned could materially and adversely affect our results of operations.We have established and may establish in the future valuation allowances on deferred tax assets. These changes may have a material adverse effect on ourresults of operations and financial position.Additionally, from time to time in the past, we have recorded asset impairment losses relating to specific plants and operations. Generally, we record assetimpairment losses when we determine that our estimates of the future undiscounted cash flows from an operation will not be sufficient to recover the carryingvalue of that facility’s building, fixed assets and production tooling. For goodwill, we perform a qualitative assessment of whether it is more likely than notthat the reporting unit’s fair value is less than its carrying amount. If the fair value of the reporting unit is less than its carrying amount, we compare itsimplied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, the reporting unit would recognize animpairment loss for that excess amount. There can be no assurance that we will not incur such charges in the future as changes in economic or operatingconditions impacting the estimates and assumptions could result in additional impairment. Any future impairments may materially and adversely affect ourresults of operations.Tax legislation initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.We are a multinational corporation with operations in the United States and international jurisdictions. As such, we are subject to the tax laws and regulationsof the U.S. federal, state and local governments and various international jurisdictions. From time to time, various legislative initiatives may be proposed thatcould adversely affect our tax positions. There can be no assurance that our effective tax rate or tax payments will not be adversely affected by theseinitiatives. In addition, U.S. federal, state and local, as well as international, tax laws and regulations are extremely complex and subject to varyinginterpretations. There can be no assurance that our tax position will not be challenged by relevant tax authorities or that we would be successful in any suchchallenge.On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform") was signed into law. The U.S. Tax Reform significantly changes how theU.S. taxes corporations. The U.S. Tax Reform requires complex computations to be performed that were not previously required in U.S. tax law, judgments tobe made in interpretation of the provisions of the U.S. Tax Reform and significant estimates in calculations. The Internal Revenue Service and otherregulatory bodies could interpret or issue guidance on how provisions of the U.S. Tax Reform will be applied or otherwise administered that is different fromour interpretation. As we complete our analysis of the U.S. Tax Reform, collect and prepare necessary data, and interpret any additional guidance, we21Table of Contentsmay make adjustments to provisional amounts we have recorded that may materially impact our Consolidated Statement of Operations in the period in whichthe adjustments are made.The geographic profile of our taxable income could adversely impact our tax provision and therefore our results of operations.Our future tax provision could be adversely affected by the geographic profile of our taxable income and by changes in the valuation of our deferred taxassets and liabilities. Our results could be materially impacted by significant changes in our effective tax rate. Additionally, any changes to manufacturingactivities could result in significant changes to our effective tax rate related to products manufactured either in the United States or in internationaljurisdictions. If the United States or another international jurisdiction implements a tax change related to products manufactured in a particular jurisdictionwhere we do business, our results could be materially and adversely affected.Exposure to currency exchange rate fluctuations on cross border transactions and translation of local currency results into United States dollars couldmaterially impact our results of operations.Cross border transactions, both with external parties and intercompany relationships, result in increased exposure to foreign currency fluctuations. Thestrengthening or weakening of the United States dollar may result in favorable or unfavorable foreign currency translation effects in as much as the results ofour foreign locations are translated into United States dollars. This could materially impact our results of operations.Litigation against us could be costly and time consuming to defend, as a result, our businesses and financial position could be materially and adverselyaffected.We are regularly subject to legal proceedings and claims that arise in the ordinary course of business, such as workers’ compensation claims, OccupationalSafety and Health Administration investigations, employment disputes, unfair labor practice charges, examination by the Internal Revenue Service, customerand supplier disputes, contractual disputes, intellectual property disputes, environmental claims and product liability claims arising out of the conduct of ourbusiness. Litigation may result in substantial costs and may divert management’s attention and resources from the operation of our business, which couldhave a material adverse effect on our business, results of operations or financial condition.We have only limited protection for our proprietary rights in our intellectual property, which makes it difficult to prevent third parties from infringingupon our rights.Our success depends to a certain degree on our ability to protect our intellectual property and to operate without infringing on the proprietary rights of thirdparties. While we have been issued patents and have registered trademarks with respect to many of our products, our competitors could independentlydevelop similar or superior products or technologies, duplicate our designs, trademarks, processes or other intellectual property or design around anyprocesses or designs on which we have or may obtain patents or trademark protection. In addition, it is possible third parties may have or acquire licenses forother technology or designs that we may use or desire to use, requiring us to acquire licenses to, or to contest the validity of, such patents or trademarks ofthird parties. Such licenses may not be made available to us on acceptable terms, if at all, or we may not prevail in contesting the validity of third party rights.In addition to patent and trademark protection, we also protect trade secrets, “know-how” and other confidential information against unauthorized use ordisclosure by persons who have access to them, such as our employees and others, through contractual arrangements. These arrangements may not providemeaningful protection for our trade secrets, know-how or other confidential information in the event of any unauthorized use, misappropriation or disclosure.If we are unable to maintain the proprietary nature of our technologies, trade secrets, know-how, or other confidential information, our revenues could bematerially and adversely affected.As we diversify and globalize our geographic footprint, we may encounter laws and practices in emerging markets that are not as stringent or enforceable asthose present in developed markets, and thus incur a higher risk of intellectual property infringement, which could materially and adversely affect our resultsof operations.We may be subject to product liability claims, recalls or warranty claims, which could be expensive, damage our reputation and result in a diversion ofmanagement resources.As a supplier of products and systems to commercial and construction vehicle OEMs and markets, we face an inherent business risk of exposure to productliability claims in the event that our products, or the equipment into which our products are incorporated, malfunction and result in personal injury or death.Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the award of damages.22Table of ContentsIn addition, we may be required to participate in recalls involving systems or components sold by us if any prove to be defective, or we may voluntarilyinitiate a recall or make payments related to such claims as a result of various industry or business practices or the need to maintain good customerrelationships. Such a recall would result in a diversion of management resources. While we maintain product liability insurance generally with a self-insuredretention amount, we cannot assure you that it will be sufficient to cover all product liability claims, that such claims will not exceed our insurance coveragelimits or that such insurance will continue to be available on commercially reasonable terms, if at all. Any product liability claim brought against us couldhave a material adverse effect on our results of operations.We warrant the workmanship and materials of many of our products under limited warranties and have entered into warranty agreements with certain OEMsthat warranty certain of our products in the hands of these OEMs’ customers, in some cases for as long as seven years. From time to time, we receive productwarranty claims from our customers, pursuant to which we may be required to bear costs of repair or replacement of certain of our products. Accordingly, weare subject to risk of warranty claims in the event that our products do not conform to our customers’ specifications or, in some cases in the event that ourproducts do not conform to their customers’ expectations. It is possible for warranty claims to result in costly product recalls, significant repair costs anddamage to our reputation, all of which would materially and adversely affect our results of operations.Our products may be susceptible to claims by third parties that our products infringe upon their proprietary rights.As the number of products in our target markets increases and the functionality of these products further overlaps, we may become increasingly subject toclaims by a third party that our technology infringes such party’s proprietary rights. Regardless of their merit, any such claims could be time consuming andexpensive to defend, may divert management’s attention and resources, could cause product shipment delays and could require us to enter into costly royaltyor licensing agreements. If successful, a claim of infringement against us and our inability to license the infringed or similar technology and/or product couldhave a material adverse effect on our business, operating results and financial condition.Our businesses are subject to statutory environmental and safety regulations in multiple jurisdictions, and the impact of any changes in regulationand/or the violation of any applicable laws and regulations by our businesses could result in a material adverse effect on our financial condition andresults of operations.We are subject to foreign, federal, state, and local laws and regulations governing the protection of the environment and occupational health and safety,including laws regulating air emissions, wastewater discharges, generation, storage, handling, use and transportation of hazardous materials; the emission anddischarge of hazardous materials into the soil, ground or air; and the health and safety of our colleagues. We are also required to obtain permits fromgovernmental authorities for certain of our operations. We cannot assure you that we are, or have been, in complete compliance with such environmental andsafety laws, and regulations. Certain of our operations generate hazardous substances and wastes. If a release of such substances or wastes occurs at or fromour properties, or at or from any offsite disposal location to which substances or wastes from our current or former operations were taken, or if contaminationis discovered at any of our current or former properties, we may be held liable for the costs of cleanup and for any other response by governmental authoritiesor private parties, together with any associated fines, penalties or damages. In most jurisdictions, this liability would arise whether or not we had compliedwith environmental laws governing the handling of hazardous substances or wastes.Several of our facilities are either certified as, or are in the process of being certified as ISO 9001, 14000, 14001 or TS16949 (the international environmentalmanagement standard) compliant or are developing similar environmental management systems. We have made, and will continue to make, capitalexpenditures to implement such environmental programs and comply with environmental requirements.The environmental laws to which we are subject have become more stringent over time, and we could incur material costs or expenses in the future to complywith environmental laws. If we violate or fail to comply with these laws and regulations or do not have the requisite permits, we could be fined or otherwisesanctioned by regulators. In some instances, such a fine or sanction could have a material adverse effect on our financial condition and results of operations.We may be adversely affected by the impact of government regulations on our OEM customers.Although the products we manufacture and supply to commercial vehicle OEMs are not subject to significant government regulation, our business isindirectly impacted by the extensive governmental regulation applicable to commercial vehicle OEMs. These regulations primarily relate to emissions andnoise standards imposed by the EPA, state regulatory agencies in North America, such as CARB, and other regulatory agencies around the world. Commercialvehicle OEMs are also subject to the National Traffic and Motor Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by NHTSA inthe U.S. Changes in emission standards and other proposed governmental regulations could impact the demand for commercial vehicles and, as a result,indirectly impact our operations. For example, new emission standards for truck engines used in Class 5 to 8 trucks imposed by the EPA and CARB becameeffective in 2010. In 2011, the EPA and NHTSA adopted a program to reduce greenhouse gas emissions and improve23Table of Contentsthe fuel efficiency of medium-and heavy-duty vehicles. These standards are anticipated to phase in with increasing stringency in each model year from 2014to 2018. To the extent that current or future governmental regulation has a negative impact on the demand for commercial vehicles, our business, financialcondition or results of operations could be adversely affected.Item 1B.Unresolved Staff CommentsNone.24Table of ContentsItem 2.PropertiesOur corporate office is located in New Albany, Ohio. Several of our facilities are located near our OEM customers to reduce distribution costs, reduce risk ofinterruptions in our delivery schedule, further improve customer service and provide our customers with reliable delivery of products and services. Thefollowing table provides selected information regarding our principal facilities as of December 31, 2017:Location Primary Product/Function Ownership InterestPiedmont, Alabama Aftermarket Distribution OwnedDouglas, Arizona Warehouse LeasedDalton, Georgia Trim & Warehouse LeasedMonona, Iowa Wire Harness OwnedMichigan City, Indiana Wipers, Switches LeasedKings Mountain, North Carolina Cab, Sleeper Box OwnedConcord, North Carolina Injection Molding LeasedChillicothe, Ohio Interior Trim, Mirrors & Warehouse Owned / LeasedNew Albany, Ohio Corporate Headquarters / R&D LeasedVonore, Tennessee Seats, Flooring & Warehouse Owned / LeasedDublin, Virginia Interior Trim & Warehouse Owned / LeasedAgua Prieta, Mexico Wire Harness LeasedEsqueda, Mexico Wire Harness LeasedSaltillo, Mexico Interior Trim & Seats LeasedNorthampton, United Kingdom Seats LeasedBrisbane, Australia Seats LeasedSydney, Australia Seats LeasedMackay, Australia Distribution LeasedMelbourne, Australia Distribution LeasedPerth, Australia Distribution LeasedJiading, China Seats and Wire Harness / R&D LeasedBrandys nad Orlici, Czech Republic Seats OwnedLiberec, Czech Republic Wire Harness LeasedBaska (State of Gujarat) India Seats LeasedPune (State of Maharashtra), India Seats / R&D LeasedDharwad (State of Karnataka), India Seats LeasedL’viv, Ukraine Wire Harness LeasedWe also have leased sales and service offices located in the Belgium, Australia, and Czech Republic and a sales office branch in Sweden. Our owned domesticfacilities are subject to liens securing our obligations under our revolving credit facility and senior secured term loan credit facility as described in Note 6 ofthe "Notes to Consolidated Financial Statements".Utilization of our facilities varies with North American, European, Asian and Australian commercial vehicle production and general economic conditions insuch regions. All locations are principally used for manufacturing, assembly, distribution or warehousing, except for our New Albany, Ohio facility, which isan administrative office.Item 3.Legal ProceedingsWe are subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, workers’ compensationclaims, OSHA investigations, employment disputes, unfair labor practice charges, customer and supplier disputes, service provider disputes, product liabilityclaims, intellectual property disputes, environmental claims arising out of the conduct of our businesses, and examinations by the Internal Revenue Service(“IRS”). We are not involved in any litigation at this time in which we expect that an unfavorable outcome of the proceedings will have a material adverseeffect on our financial position, results of operations or cash flows.25Table of ContentsItem 4.Mine Safety DisclosuresNot applicable.26Table of ContentsPART IIItem 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is traded on the NASDAQ Global Select Market under the symbol “CVGI.” The following table sets forth the high and low sale prices forour common stock, for the periods indicated, as regularly reported by the NASDAQ Global Select Market: High LowYear Ended December 31, 2017: Fourth Quarter$11.85 $7.20Third Quarter$9.17 $5.55Second Quarter$9.62 $6.52First Quarter$6.87 $5.15Year Ended December 31, 2016: Fourth Quarter$6.00 $4.36Third Quarter$5.88 $3.82Second Quarter$5.56 $2.14First Quarter$3.33 $2.02As of March 12, 2018, there were 164 holders of record of our outstanding common stock.We have not declared or paid any dividends to the holders of our common stock in the past and do not anticipate paying dividends in the foreseeable future.Any future payment of dividends is within the discretion of the Board of Directors and will depend upon, among other factors, the capital requirements,operating results and financial condition of CVG. In addition, our ability to pay cash dividends is limited under the terms of the Third Amended and RestatedLoan and Security Agreement and the Term Loan and Security Agreement, as described in more detail under “Management’s Discussion and Analysis -Liquidity and Capital Resources - Debt and Credit Facilities.”The following graph compares the cumulative five-year total return to holders of Commercial Vehicle Group, Inc.’s common stock to the cumulative totalreturns of the NASDAQ Composite Index and a Peer Group that includes a legacy group through October 31, 2016 and the new group from November 1, 2016onward. The legacy group is Altra Industrial Motion Corp, Core Molding Technologies, L.B. Foster Company, Fuel Systems Solutions Inc., ModineManufacturing, Meritor Inc. EnPro Industries, Stoneridge Inc., Titan International and Wabco Holdings. The new peer group is L.B. Foster Company, ModineManufacturing, EnPro Industries, Stoneridge Inc., LCI Industries, Shiloh Industries Inc., Standard Motor Products Inc., ASTEC Industries Inc., Gentherm Inc.,Dorman Products Inc., Freightcar America Inc., Federal Signal Corp., Spartan Motors Inc., Supreme Industries, American Railcar Industries Inc. and ColumbusMcKinnon Corp. The graph assumes that the value of the investment in the Company’s common stock in the peer group and the index (includingreinvestment of dividends) was $100 on December 31, 2012 and tracks it through December 31, 2017.27Table of Contents 12/31/1212/31/1312/31/1412/31/1512/31/1612/31/17Commercial Vehicle Group, Inc.100.0088.5581.1233.6267.23130.43NASDAQ Composite100.00140.17160.95172.39187.85243.70Legacy Peer Group100.00139.63148.56119.34146.94207.14New Peer Group100.00155.17160.60150.15202.66225.11The information in the graph and table above is not “solicitation material,” is not deemed “filed” with the Securities and Exchange Commission and is not tobe incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whethermade before or after the date of this annual report, except to the extent that we specifically incorporate such information by reference.We did not repurchase any of our common stock on the open market as part of a stock repurchase program during 2017. Our employees surrendered 161,382shares of our common stock in 2017 to satisfy tax withholding obligations on the vesting of restricted stock awards issued under our Fourth Amended andRestated Equity Incentive Plan and the 2014 Equity Incentive Plan. The following table sets forth information in connection with purchases made by, or onbehalf of, us or any affiliated purchaser, of shares of our common stock during the quarterly period ended December 31, 2017: (a) TotalNumber ofShares (or Units)Purchased (b) AveragePrice Paidper Share(or Unit) (c) TotalNumber ofShares (orUnits)Purchased asPart ofPubliclyAnnouncedPlans orPrograms (d) MaximumNumber (orApproximateDollar Value) ofShares (or Units)that May Yet BePurchased Underthe Plans orProgramsOctober 1, 2017 through December 31, 2017161,382 $8.43 — —Unregistered Sales of Equity SecuritiesWe did not sell any equity securities during 2017 that were not registered under the Securities Act of 1933, as amended.28Table of ContentsItem 6.Selected Financial DataThe following table sets forth selected consolidated financial data regarding our business and certain industry information and should be read in conjunctionwith “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and notes theretoincluded elsewhere in this Annual Report on Form 10-K.Material Events Affecting Financial Statement ComparabilityThere are no material events affecting financial statement comparability of our consolidated financial statements contained in Item 8 of our Annual Report onForm 10-K for the year ended December 31, 2017.The table below sets forth certain operating revenues for the periods indicated (in thousands, except per share data): Years Ended December 31, 2017 2016 2015 2014 2013Statements of Operations Data: Revenues$755,231 $662,112 $825,341 $839,743 $747,718Cost of revenues662,666 574,882 714,519 732,055 667,989Gross profit92,565 87,230 110,822 107,688 79,729Selling, general and administrative expenses59,800 60,542 71,469 72,480 71,711Amortization expense1,320 1,305 1,327 1,515 1,580Operating income31,445 25,383 38,026 33,693 6,438Other (income) expense(1,349) (769) (152) 215 139Interest expense19,149 19,318 21,359 20,716 21,087Income (loss) before provision (benefit) for income taxes13,645 6,834 16,819 12,762 (14,788)Provision (benefit) for income taxes15,350 49 9,758 5,131 (2,337)Net (loss) income(1,705) 6,785 7,061 7,631 (12,451)Less: Non-controlling interest in subsidiary’s income (loss)— — 1 1 (6)Net (loss) income attributable to CVG stockholders$(1,705) $6,785 $7,060 $7,630 $(12,445)(Loss) income per share attributable to common stockholders: Basic$(0.06) $0.23 $0.24 $0.26 $(0.44)Diluted$(0.06) $0.23 $0.24 $0.26 $(0.44)Weighted average common shares outstanding: Basic29,942 29,530 29,209 28,926 28,584Diluted29,942 29,878 29,399 29,117 28,58429Table of Contents Years Ended December 31, 2017 2016 2015 2014 2013Balance Sheet Data (at end of each period): Working capital (current assets less current liabilities)$150,903 $202,693 $193,424 $192,618 $176,979Total assets384,388 428,765 436,679 442,927 432,441Total liabilities, excluding debt142,697 127,921 133,112 133,177 122,500Total debt, net of prepaid debt financing costs and discount166,949 233,154 235,000 250,000 250,000Total CVG stockholders’ equity74,742 67,690 65,930 58,801 59,945Total non-controlling interest— — — 35 33Total stockholders’ equity74,742 67,690 65,930 58,836 59,978Other Data: Net cash provided by (used in): Operating activities$2,257 $49,365 $55,299 $9,519 $19,154Investing activities(10,776) (8,903) (14,506) (12,289) (12,949)Financing activities(72,848) (714) (16,008) 514 (937)Depreciation and amortization15,344 16,451 17,710 18,247 20,583Capital expenditures13,567 11,917 15,590 14,568 13,666North American Class 8 Production (units) 1256,000 228,000 323,000 297,000 246,000North America Class 5-7 Production (units) 1249,000 233,000 237,000 226,000 201,000(1) Source: ACT (February 2018).30Table of ContentsItem 7.Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou should read the following discussion and analysis in conjunction with the information set forth under “Item 6 - Selected Financial Data” and ourconsolidated financial statements and the notes thereto included in Item 8 in this Annual Report on Form 10-K. The statements in this discussion regardingindustry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussionare forward-looking statements. See “Forward-Looking Information” on page ii of this Annual Report on Form 10-K. These forward-looking statements aresubject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under “Item 1A - Risk Factors.” Our actualresults may differ materially from those contained in or implied by any forward-looking statements.31Table of ContentsCompany OverviewCommercial Vehicle Group, Inc. (and its subsidiaries) is a leading supplier of a full range of cab related products and systems for the global commercialvehicle market, including the MD/HD Truck market, the medium- and heavy-construction vehicle market, and the military, bus, agriculture, specialtytransportation, mining, industrial equipment and off-road recreational markets.We have manufacturing operations in the United States, Mexico, United Kingdom, Czech Republic, Ukraine, China, India and Australia. Our products areprimarily sold in North America, Europe, and the Asia-Pacific region.Our products include Seats; Trim; cab structures, sleeper boxes, body panels and structural components; mirrors, wipers and controls; and electric wireharness and panel assemblies designed for applications in commercial and other vehicles.We are differentiated from automotive industry suppliers by our ability to manufacture low volume, customized products on a sequenced basis to meet therequirements of our customers. We believe our products are used by a majority of the North American MD/HD Truck and certain leading global constructionand agriculture OEMs, which we believe creates an opportunity to cross-sell our products.Business OverviewFor the year ended December 31, 2017, approximately 42% of our revenue was generated from sales to North American MD/HD Truck OEMs. Our remainingrevenue was primarily derived from sales to OEMs in the global construction equipment market, aftermarket, OE service organizations, military market andother specialty markets.Demand for our products is driven to a significant degree by preferences of the end-user of the vehicle, particularly with respect to heavy-duty trucks. Unlikethe automotive industry, heavy-duty truck OEMs generally afford the end-user the ability to specify many of the component parts that will be used tomanufacture the vehicle, including a wide variety of cab interior styles and colors, brand and type of seats, type of seat fabric and color, and specific interiorstyling. In addition, certain of our products are only utilized in heavy-duty trucks, such as our storage systems, sleeper boxes and privacy curtains. To theextent that demand for higher content vehicles increases or decreases, our revenues and gross profit will be impacted positively or negatively.We generally compete for new business at the beginning of the development of a new vehicle platform and upon the redesign of existing programs. Newplatform development generally begins one to three years before the marketing of such models by our customers. Contract durations for commercial vehicleproducts generally extend for the entire life of the platform. Several of the major truck makers have upgraded their truck platforms and we believe we havemaintained our share of content in these platforms. We continue to pursue opportunities to expand our content.Demand for our heavy-duty (or "Class 8") truck products is generally dependent on the number of new heavy-duty trucks manufactured in North America,which in turn is a function of general economic conditions, interest rates, changes in government regulations, consumer spending, fuel costs, freight costs,fleet operators' financial health and access to capital, used truck prices and our customers’ inventory levels. New heavy-duty truck demand has historicallybeen cyclical and is particularly sensitive to the industrial sector of the economy, which generates a significant portion of the freight tonnage hauled bycommercial vehicles. According to a February 2018 report by ACT Research, a publisher of industry market research, North American Class 8 productionlevels are expected to increase to 325,000 units in 2018, decrease to 238,000 units in 2020, and then increase to 280,000 units in 2022. We believe thedemand for North American Class 8 vehicles in 2018 will be between 300,000 to 325,000 units. ACT Research estimates that the average age of active NorthAmerican Class 8 trucks is 11.3 and 11.4 years in 2017 and 2016, respectively. As vehicles age, their maintenance costs typically increase. ACT Researchforecasts that the vehicle age will decline as aging fleets are replaced.North American medium-duty (or "Class 5-7") truck production steadily increased from 237,000 units in 2015 to 249,000 units in 2017. We believe thedemand for Class 5-7 in 2018 will be stable. According to a February 2018 report by ACT Research, North American Class 5-7 truck production is expectedto gradually increase to 275,000 units in 2022.Demand for our construction and agricultural equipment products is dependent on vehicle production. Demand for new vehicles in the global constructionand agricultural equipment market generally follows certain economic conditions around the world. Our products are primarily used in the medium- andheavy-duty construction equipment markets (vehicles weighing over 12 metric tons). Demand in the medium- and heavy-duty construction equipmentmarket is typically related to the level of large scale infrastructure development projects such as highways, dams, harbors, hospitals, airports and industrialdevelopment, as well as activity in the mining, forestry and other raw material based industries. We believe the construction markets we serve in Europe, Asia,and North America have improved, and that the global agriculture markets are trending upwards.Our Long-term Strategy32Table of ContentsOur long-term strategy is to grow organically by product, geographic region and end market. Our products are Seats, Trim, wire harnesses, structures, wipers,mirrors and controls. We expect to realize some end market diversification in truck and bus in Asia-Pacific and trim in Europe, with additional diversificationweighted toward the agriculture market, and to a lesser extent the construction market. We intend to allocate resources consistent with our strategy; morespecifically, consistent with our product portfolio, geographic region and end market diversification objectives. We periodically evaluate our long-termstrategy in response to significant changes in our business environment and other factors.Although our long-term strategy is an organic growth plan, we will consider opportunistic acquisitions to supplement our product portfolio, and to enhanceour ability to serve our customers in our geographic end markets.Strategic FootprintWe review our manufacturing footprint in the normal course to, among other considerations, provide a competitive landed cost to our customers. InNovember 2015, the Company announced a restructuring and cost reduction plan, which was expected to lower operating costs by $8 million to $12 millionannually when fully implemented at the end of 2017. The plan is substantially complete as of December 31, 2017, and the Company believes the estimatedsavings were achieved.At the time of the November 2015 announcement, the Company estimated pre-tax costs of $11 million to $16 million. The actual restructuring costs,consisting of employee-related separation costs and other costs associated with the transfer of production and subsequent closure of facilities, offset by gainson the sale of long-lived assets, totaled $6 million.Recently Issued Accounting PronouncementsRecently issued accounting pronouncements described in Note 2 of the “Notes to Consolidated Financial Statements” is incorporated in this section byreference.Consolidated Results of OperationsThe table below sets forth certain operating data expressed as a percentage of revenues for the periods indicated (dollars are in thousands): 2017 2016 2015Revenues$755,231 100.0 % $662,112 100.0% $825,341 100.0 %Cost of revenues662,666 87.7 574,882 86.8 714,519 86.6Gross profit92,565 12.3 87,230 13.2 110,822 13.4Selling, general and administrativeexpenses59,800 7.9 60,542 9.1 71,469 8.7Amortization expense1,320 0.2 1,305 0.2 1,327 0.2Operating income31,445 4.2 25,383 3.8 38,026 4.6Other (income) expense(1,349) (0.1) (769) (0.1) (152) —Interest expense19,149 2.5 19,318 2.9 21,359 2.6Income before provision for incometaxes13,645 1.8 6,834 1.0 16,819 2.0Provision for income taxes15,350 2.0 49 — 9,758 1.2Net (loss) income(1,705) (0.2) 6,785 1.0 7,061 0.9Less: Non-controlling interest insubsidiary’s income— — — — 1 —Net (loss) income attributable tocommon stockholders$(1,705) (0.2)% $6,785 1.0% $7,060 0.9 %33Table of ContentsYear Ended December 31, 2017 Compared to Year Ended December 31, 2016CONSOLIDATED RESULTSRevenues. On a consolidated basis, revenues increased $93.1 million, or 14.1%, to $755.2 million for the year ended December 31, 2017 compared to $662.1million for the year ended December 31, 2016. The increase in revenues primarily resulted from increased heavy-duty truck production volumes in NorthAmerica and an improvement in the global construction equipment markets. More specifically, the increase resulted from:•a $41.6 million, or 15%, increase in OEM North American MD/HD Truck revenues;•a $40.9 million, or 32%, increase in construction equipment revenues;•a $4.6 million, or 4%, increase in aftermarket revenues; and•a $6.0 million, or 4%, increase in other revenues.2017 revenues were favorably impacted by foreign currency exchange translation of $0.5 million, which is reflected in the change in revenue above.Gross Profit. Gross profit increased $5.4 million, or 6.2%, to $92.6 million for the year ended December 31, 2017 from $87.2 million for the year endedDecember 31, 2016. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wagesand benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. Cost ofrevenues increased $87.8 million, or 15.3%, resulting from an increase in raw material and purchased component costs of $60.6 million, wages and benefits of$11.8 million and overhead expenses of $15.4 million. The increase in gross profit is primarily attributable to an increase in sales volume partially offset byrising commodity prices, tighter labor markets and costs associated with the sharp acceleration in North American truck build. As part of the Company'srestructuring efforts, on July 19, 2016, the Company announced plans to transfer all wire harness production from the manufacturing facility in Monona, Iowato the facility in Agua Prieta, Mexico. On May 24, 2017, the Company elected to maintain production capability in the Monona, Iowa facility as a result of ashortage of labor in our North American wire harness business. Additionally, the Company established a new facility in Mexico with better access to labor.The labor shortage and footprint adjustment in our North American wire harness business are collectively referred to as the "NA Footprint Adjustment". TheNA Footprint Adjustment adversely impacted cost of revenue by approximately $10 million in 2017. Additionally, 2017 results included $1.9 million incharges relating to facility restructuring and other related costs compared to $3.4 million in the prior year period. As a percentage of revenues, gross profitwas 12.3% for the year ended December 31, 2017 compared to 13.2% for the year ended December 31, 2016.Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of wages and benefits and other overheadexpenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products.Selling, general and administrative expenses decreased $0.7 million, or 1.2%, to $59.8 million for the year ended December 31, 2017 from $60.5 million forthe year ended December 31, 2016. The decrease in selling, general and administrative expenses, notwithstanding the increase in revenue, reflects acontinuing focus on cost discipline, partially offset by $2.4 million of litigation settlement costs for the year ended December 31, 2017. In addition, the yearended December 31, 2016 included a $0.6 million impairment of an asset held for sale.Other Income. Other income increased $0.6 million, or 75.4%, to $1.3 million for the year ended December 31, 2017 from $0.8 million for the year endedDecember 31, 2016. The increase in other income is due to favorable foreign exchange on non-operating activity.Interest Expense. Interest expense associated with our long-term debt, was approximately $19.1 million and $19.3 million in the years ended December 31,2017 and 2016, respectively. Included in interest expense for the year ended December 31, 2017 is a non-cash write-off of deferred financing fees of $1.6million and a prepayment charge for interest paid of $1.5 million paid to bondholders during the 30-day notification period associated with the redemptionof the 7.875% notes completed during the second quarter of 2017. These expenses were offset by lower interest expense resulting from less outstanding debt.Provision for Income Taxes. Our provision for income taxes was $15.4 million for the year ended December 31, 2017 compared to $49 thousand for the yearended December 31, 2016. Results for the year ended December 31, 2017 were unfavorably impacted by an estimated $11.2 million attributable to thepassage of the U.S. Tax Reform. This includes a $7.2 million provision for the decrease in value of our net deferred tax assets due to a reduction of the U.S.corporate tax rate from 35% to 21% effective January 1, 2018, and a $4.0 million provision related to the deemed repatriation of accumulated untaxedearnings of certain foreign subsidiaries.34Table of ContentsOur provision for income taxes, excluding the impact of the U.S. Tax Reform, would have been $4.2 million for the year ended December 31, 2017 comparedto $49 thousand for the year ended December 31, 2016. This increase primarily resulted from a year over year increase of pre-tax earnings, a change in themix of income between our U.S. and non-U.S. locations and tax valuation allowances we continue to carry against net deferred tax assets in certain foreignjurisdictions, primarily Luxembourg and United Kingdom. For additional information regarding the income tax provision refer to Note 8 of our consolidatedfinancial statements in Item 8 in this Annual Report on Form 10-K.Net (Loss) Income Attributable to CVG Stockholders. Net loss attributable to CVG stockholders was $1.7 million for the year ended December 31, 2017compared to net income of $6.8 million in the prior year period.SEGMENT RESULTSGlobal Truck and Bus Segment ResultsThe table below sets forth certain GTB Segment operating data expressed as a percentage of revenues for the periods indicated (dollars are in thousands): 2017 2016Revenues$457,770 100.0% $416,279 100.0%Gross Profit62,668 13.7 54,665 13.1Selling, General & Administrative Expenses21,507 4.7 22,557 5.4Operating Income39,983 8.7 30,943 7.4Revenues. GTB Segment revenues increased $41.5 million, or 10.0%, to $457.8 million for the year ended December 31, 2017 from $416.3 million for theyear ended December 31, 2016. The increase in GTB Segment revenues is primarily a result of:•a $33.0 million, or 13%, increase in OEM MD/HD Truck revenues;•a $7.7 million, or 10%, increase in aftermarket revenues; and•a $0.8 million, or 1%, increase in revenues from other markets.GTB Segment 2017 revenues were favorably impacted by foreign currency exchange translation of $1.1 million, which is reflected in the changes in revenueabove.Gross Profit. GTB Segment gross profit increased $8.0 million, or 14.6%, to $62.7 million for the year ended December 31, 2017 from $54.7 million for theyear ended December 31, 2016. Cost of revenues increased $33.5 million, or 9.3%, as a result of an increase in raw material and purchased component costs of$29.0 million, wages and benefits of $4.2 million and overhead expenses of $0.3 million. The increase in gross profit was primarily the result of the increasein sales volume partially offset by rising commodity prices, tightening labor markets and costs associated with the sharp acceleration in North American truckbuild. Additionally, 2017 results included $0.8 million in charges relating to facility restructuring and other related costs compared to $2.7 million in prioryear period. As a percentage of revenues, gross profit for the year ended December 31, 2017 was 13.7% compared to 13.1% for the year ended December 31,2016.Selling, General and Administrative Expenses. GTB Segment selling, general and administrative expenses decreased, notwithstanding the increase inrevenues, $1.1 million, or 4.9%, to $21.5 million for the year ended December 31, 2017 from 22.6 million for the year ended December 31, 2016 reflecting afocus on cost discipline.Global Construction and Agriculture Segment ResultsThe table below sets forth certain GCA Segment operating data expressed as a percentage of revenues for the periods indicated (dollars are in thousands): 2017 2016Revenues$309,707 100.0% $254,024 100.0%Gross Profit31,291 10.1 $34,060 13.4Selling, General & Administrative Expenses16,845 5.4 $18,240 7.2Operating Income14,305 4.6 $15,680 6.235Table of ContentsRevenues. GCA Segment revenues increased $55.7 million, or 21.9%, to $309.7 million for the year ended December 31, 2017 from $254.0 million for theyear ended December 31, 2016. The increase in GCA Segment revenue is primarily a result of:•a $38.1 million, or 31%, increase in OEM construction equipment revenues;•a $8.6 million, or 50%, increase in OEM truck revenues;•a $4.5 million, or 12%, increase in OEM automotive revenues; and•a $4.5 million, or 6%, increase in revenues from other markets.GCA Segment 2017 revenues were adversely impacted by foreign currency exchange translation of $0.8 million, which is reflected in the changes in revenueabove.Gross Profit. GCA Segment gross profit decreased $2.8 million, or 8.2%, to $31.3 million for the year ended December 31, 2017 from $34.1 million for yearended December 31, 2016. Cost of revenues increased $58.5 million, or 26.6%, as a result of an increase in raw material and purchased component costs of$35.9 million, wages and benefits of $7.6 million and overhead expenses of $15.0 million. The decrease in gross profit was primarily attributable to the NAFootprint Adjustment and to rising commodity prices. Additionally, 2017 results included $1.1 million in charges relating to facility restructuring costscompared to $0.7 million in the prior year period. As a percentage of revenues, gross profit was 10.1% for the year ended December 31, 2017 compared to13.4% for the year ended December 31, 2016.Selling, General and Administrative Expenses. GCA Segment selling, general and administrative expenses decreased, notwithstanding the increase inrevenues, $1.4 million, or 7.7%, to $16.8 million in the year ended December 31, 2017 from $18.2 million for the year ended December 31, 2016 reflecting afocus on cost discipline.Year Ended December 31, 2016 Compared to Year Ended December 31, 2015Consolidated ResultsRevenues. On a consolidated basis, revenue decreased $163.2 million, or 19.8%, to $662.1 million for the year ended December 31, 2016 compared to $825.3million for the year ended December 31, 2015. The decrease in revenues primarily resulted from decreased heavy-duty truck production volumes in NorthAmerica, decreased sales volume in global construction markets and unfavorable foreign currency exchange translation. More specifically,the decrease resulted from:•a $132.0 million, or 32%, decrease in OEM MD/HD Truck revenues;•a $19.1 million, or 14%, decrease in aftermarket revenues;•a $16.6 million, or 11%, decrease in construction equipment revenues; and•a $4.5 million, or 3%, increase in other revenues.2016 revenues were adversely impacted by foreign currency exchange translation of $8.6 million, which is reflected in the change in revenue above.Gross Profit. Gross profit decreased $23.6 million, or 21.3%, to $87.2 million for the year ended December 31, 2016 from $110.8 million for the year endedDecember 31, 2015. Cost of revenues decreased $139.6 million, or 19.5%, resulting from a decrease in raw material and purchased component costs of $107.1million, wages and benefits of $10.3 million and overhead expenses of $22.2 million. The decrease in gross profit primarily resulted from the decrease insales volume. Additionally, 2016 results included $3.4 million in charges relating to facility restructuring costs compared to $2.1 million in the prior yearperiod. As a percentage of revenues, gross profit was 13.2% for the year ended December 31, 2016 compared to 13.4% for the year ended December 31, 2015.Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $10.9 million, or 15.3%, to $60.5 million for the yearended December 31, 2016 from $71.5 million for the year ended December 31, 2015. The decrease in selling, general and administrative expenses wasprimarily a result of a reduction in force and executive realignment of approximately $6.0 million in overhead and employee-related expenditures, areduction in outside services and other cost-cutting measures of $3.0 million, driven by a decline in volume, and favorable foreign currency exchangetranslation of $0.7 million. Additionally, 2016 results included $0.6 million in charges relating to impairment of an asset held for sale.36Table of ContentsOther (Income) Expense. Other (income) expense increased $0.6 million, or 405.9%, to $0.8 million for the year ended December 31, 2016 from $0.2million for the year ended December 31, 2015. The increase in other (income) expense is due to proceeds from an insurance settlement.Interest Expense. Interest, associated with our long-term debt, and other expense was approximately $19.3 million and $21.4 million in the years endedDecember 31, 2016 and 2015, respectively. The decline reflects a reduction in interest expense as a result of the redemption of $15.0 million of ouroutstanding notes in the fourth quarter of 2015.Provision for Income Taxes. Our provision for income taxes decreased by $9.7 million to $49 thousand for the year ended December 31, 2016 comparedto $9.8 million for the year ended December 31, 2015. This decrease primarily resulted from a change in the mix of income from our U.S. to non-U.S.locations and tax valuation allowances released in China and India during 2016. For additional information regarding the income tax provision, refer to Note8 of our consolidated financial statements in Item 8 in this Annual Report on Form 10-K.Net Income Attributable to CVG Stockholders. Net income attributable to CVG stockholders was $6.8 million for the year ended December 31, 2016compared to net income of $7.1 million.Global Truck and Bus Segment ResultsThe table below sets forth certain GTB Segment operating data expressed as a percentage of revenues for the periods indicated (dollars are in thousands): 2016 2015Revenues$416,279 100.0% $565,269 100.0%Gross Profit54,665 13.1 85,702 15.2Selling, General & Administrative Expenses22,557 5.4 25,263 4.5Operating Income30,943 7.4 59,252 10.5Revenues. GTB Segment revenues decreased $149.0 million, or 26.4%, to $416.3 million for the year ended December 31, 2016 from $565.3 million forthe year ended December 31, 2015. The decrease in GTB Segment revenues is primarily a result of:•a $134.6 million, or 34%, decrease in OEM MD/HD Truck revenues;•a $10.0 million, or 12%, decrease in aftermarket revenues; and•a $4.4 million, or 5%, decrease in revenues from other markets.GTB Segment 2016 revenues were adversely impacted by foreign currency exchange translation of $0.6 million, which is reflected in the changes in revenueabove.Gross Profit. GTB Segment gross profit decreased $31.0 million, or 36.2%, to $54.7 million for the year ended December 31, 2016 from $85.7 million forthe year ended December 31, 2015. Cost of revenues decreased $118.0 million, or 24.6%, as a result of a decrease in raw material and purchased componentcosts of $91.4 million, wages and benefits of $8.8 million and overhead expenses of $17.7 million. The decrease in gross profit was primarily the result of thedecrease in sales volume. Additionally, 2016 results included $2.7 million in charges relating to facility restructuring costs compared to $1.8 million in prioryear period, $1.5 million of which relates to Tigard restructuring in 2015. As a percentage of revenues, gross profit was 13.1% for the year ended December31, 2016 compared to 15.2% for the year ended December 31, 2015.Selling, General and Administrative Expenses. GTB Segment selling, general and administrative expenses decreased $2.7 million, or 10.7%, to $22.6million for the year ended December 31, 2016 from $25.3 million for the year ended December 31, 2015 reflecting a focus on cost discipline.Global Construction and Agriculture Segment ResultsThe table below sets forth certain GCA Segment operating data expressed as a percentage of revenues for the periods indicated (dollars are in thousands):37Table of Contents 2016 2015Revenues$254,024 100.0% $271,627 100.0%Gross Profit34,060 13.4 28,627 10.5Selling, General & Administrative Expenses18,240 7.2 20,442 7.5Operating Income15,680 6.2 8,044 3.0Revenues. GCA Segment revenues decreased $17.6 million, or 6.5%, to $254.0 million for the year ended December 31, 2016 from $271.6 million forthe year ended December 31, 2015. The decrease in GCA Segment revenue is primarily a result of:•a $13.2 million, or 10%, decrease in OEM construction equipment revenues;•a $9.2 million, or 19%, decrease in aftermarket revenues; and•a $4.8 million, or 5%, increase in revenues from other markets.GCA Segment 2016 revenues were adversely impacted by foreign currency exchange translation of $8.6 million, which is reflected in the changes in revenueabove.Gross Profit. GCA Segment gross profit increased $5.4 million, or 19.0%, to $34.1 million for the year ended December 31, 2016 from $28.6 million for yearended December 31, 2015. Cost of revenues decreased $23.0 million, or 9.5%, as a result of a decrease in raw material and purchased component costs of$17.1 million, wages and benefits of $1.4 million and overhead expenses of $4.5 million. The increase in gross profit, notwithstanding the decline in salesvolume, was primarily a result of our cost reduction and restructuring actions for the year ended December 31, 2016. Additionally, 2016 results included $0.7million in charges relating to facility restructuring costs compared to $0.3 million in the prior year period. As a percentage of revenues, gross profitwas 13.4% for the year ended December 31, 2016 compared to 10.5% for the year ended December 31, 2015.Selling, General and Administrative Expenses. GCA Segment selling, general and administrative expenses decreased $2.2 million, or 10.8% to $18.2million for the year ended December 31, 2016 from $20.4 million for the year ended December 31, 2015 reflecting a focus on cost discipline.Liquidity and Capital ResourcesDuring the year ended December 31, 2017, the Company did not have any borrowings under its asset-based revolver. At December 31, 2017, the Companyhad liquidity of $111 million; $52 million of cash and $59 million million availability from its asset-based revolver.We intend to allocate resources consistent with the following priorities: (1) to provide liquidity; (2) to invest in growth; (3) to reduce debt; and (4) to returncapital to our shareholders.Cash FlowsOur primary source of liquidity during the year ended December 31, 2017 was cash and availability under our revolving credit facility. We believe that thesesources of liquidity will provide adequate funds for our working capital needs, planned capital expenditures, and servicing of our debt through the nexttwelve months. However, no assurance can be given that this will be the case. We had no borrowings under our revolving credit facility during 2017.For the year ended December 31, 2017, cash provided by operations was $2.3 million compared to $49.4 million in the year ended December 31, 2016. and$55.3 million in the year ended December 31, 2015. The decrease in cash provided by operations for the year ended December 31, 2017 compared to 2016was primarily due to an increase in the investment in working capital in 2017 driven by the increase in sales volume. The decrease in cash provided byoperations for the year ended December 31, 2016 compared to 2015 was primarily due to year over year changes in deferred income taxes offset in part by adecrease in the investment in working capital in 2016.Net cash used in investing activities was $10.8 million for the year ended December 31, 2017 compared to $8.9 million for the year ended December 31,2016, and $14.5 million for the year ended December 31, 2015. The increase in cash used in investing activities for the year ended December 31, 2017compared to 2016 was due to an increase in capital expenditures in 2017. The decrease in cash used in investing activities for the year ended December 31,2016 compared to 2015 was due primarily to a decrease in capital expenditures in 2016 and cash provided from the settlement of corporate-owned lifeinsurance policies in 2016. In 2018, we expect capital expenditures to be in the range of $15 million to $18 million.Net cash used in financing activities was $72.8 million for the year ended December 31, 2017 compared to $0.7 million for the year ended December 31,2016, and $16.0 million for the year ended December 31, 2015. The increase in net cash used in financing38Table of Contentsactivities for the year ended December 31, 2017 is attributable to the debt refinancing completed in the second quarter of 2017. The decrease in net cash usedfor financing activities for the year ended December 31, 2016 primarily resulted from the redemption of $15 million of our 7.875% notes in 2015.As of December 31, 2017, cash of $38.2 million was held by foreign subsidiaries. We do not have plans to repatriate the earnings held by our foreignaffiliates. We intend to use the cash to fund the growth of our foreign operations. Should our plans change with respect to cash held by our foreignsubsidiaries, we would accrue and pay the appropriate withholding and local income taxes.Debt and Credit FacilitiesThe debt and credit facilities described in Note 6 of the "Notes to Consolidated Financial Statements" are incorporated in this section by reference.Contractual Obligations and Commercial CommitmentsThe following table reflects our contractual obligations as of December 31, 2017 (in thousands): Payments Due by Period Total 1 Year 2-3 Years 4-5 Years More than5 YearsDebt obligations$172,813 $4,375 $8,750 $8,750 $150,938Estimated interest payments64,833 13,138 25,043 23,460 3,192Operating lease obligations20,021 5,284 6,469 4,893 3,375Pension and other post-retirement funding45,314 4,065 8,736 8,966 23,547Total$302,981 $26,862 $48,998 $46,069 $181,052We estimated future interest payments based on the effective interest rate as of December 31, 2017. Since December 31, 2017, there have been no materialchanges outside the ordinary course of business to our contractual obligations as set forth above.We enter into agreements with our customers at the beginning of a given vehicle platform’s life to supply products for the entire life of that vehicle platform.These agreements generally provide for the supply of a customer’s production requirements for a particular platform, rather than for the purchase of a specificquantity of products. Additionally, we have recorded a liability of $0.5 million for unrecognized tax benefits as we are uncertain as to if or when this amountmay be settled. The Company also recorded $0.3 million for potential penalties and interest associated with unrecognized tax benefits. Accordingly, ourobligations under these agreements and regulations are not reflected in the contractual obligations table above.As of December 31, 2017, we were not a party to significant purchase obligations for goods or services.Off-Balance Sheet ArrangementsWe use standby letters of credit to guarantee our performance under various contracts and arrangements, principally in connection with our workers’compensation liabilities. These letter of credit contracts are usually extended on a year-to-year basis. As of December 31, 2017, we had outstanding letters ofcredit of $2.1 million. We do not believe that these letters of credit will be drawn.We currently have no non-consolidated special purpose entity arrangements.Critical Accounting Policies and EstimatesOur consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.GAAP”). For a comprehensive discussion of our significant accounting policies, see Note 2 to our consolidated financial statements in Item 8 in this AnnualReport on Form 10-K.The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. We evaluate our estimates and assumptions on an ongoing basis, particularly relating to accounts receivable reserves, inventoryreserves, goodwill, intangible and long-lived assets, income taxes, warranty reserves, litigation reserves and pension and other post-retirement benefit plans.We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances, the results of which form thebasis for making judgments about the carrying value of assets, liabilities and equity that are not readily apparent from other sources. Actual results andoutcomes could differ materially from these estimates and assumptions. See Item 1A - Risk Factors in this Annual Report on Form 10-K for additionalinformation regarding risk factors that may impact our estimates.39Table of ContentsRevenue Recognition — We recognize revenue when (1) delivery has occurred or services have been rendered, (2) persuasive evidence of an arrangementexists, (3) there is a fixed or determinable price and (4) collectability is reasonably assured. Our products are generally shipped from our facilities to ourcustomers, which is when legal title passes to the customer for substantially all of our revenues. We enter into agreements with our customers at the beginningof a given vehicle platform’s life to supply products for that vehicle platform. Once we enter into such agreements, fulfillment of our requirements is ourobligation for the entire production life of the platform and we have no provisions to terminate such contracts. At the time of revenue recognition, we alsorecord estimates for returns and allowances based on historical trends and current market conditions.Inventory — Inventories are valued at the lower of first-in, first-out cost or market. Cost includes applicable material, labor and overhead. We value ourfinished goods inventory at a standard cost that is periodically adjusted to approximate actual cost. Inventory quantities on-hand are regularly reviewed, andwhere necessary, provisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements driven by expectedmarket volumes.Income Taxes — We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financialstatements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets andliabilities using enacted tax laws and rates expected to be in place when the deferred tax items are realized. We recognize tax positions initially in thefinancial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. We provide a valuation allowancefor deferred tax assets when it is more likely than not that a portion of such deferred tax assets will not be realized.On December 22, 2017, the U.S. Tax Reform significantly revised the U.S. corporate income tax law. The SEC issued the Staff Accounting Bulletin ("SAB")118 to address the accounting implications of the U.S Tax Reform. The effects of the U.S. Tax Reform are recognized upon enactment, however, SAB 118permits a company to recognize provisional amounts when it does not have the necessary information available. The measurement period to finalize ourcalculations cannot extend beyond one year of the enactment date. The tax provision related to the deemed repatriation of accumulated untaxed earnings offoreign subsidiaries represents the Company’s best estimate. Any adjustments recorded to the provisional amounts will be included in income fromoperations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of theU.S. Tax Reform and may change as the Company receives additional clarification and implementation guidance.Due to the complexity of the new Global Intangible Low-Taxed Income (“GILTI”) tax rules, the Company continues to evaluate this provision of the U.S.Tax Reform and the application of ASC 740, Income Taxes. The Company will analyze its global activities to determine whether it expects to have futureinclusions in U.S. taxable income related to GILTI provisions, and is not yet able to reasonably estimate the impact of this provision of the U.S. Tax Reform.Therefore, the Company has not made a policy decision or any adjustments related to potential GILTI tax in its financial statements.Item 7A.Quantitative and Qualitative Disclosures About Market RiskWe are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising fromadverse changes in market rates and prices, such as foreign currency exchange and interest rates. We do not enter into derivatives or other financialinstruments for trading or speculative purposes. We enter into financial instruments, from time to time, to manage the impact of changes in foreign currencyexchange rates and interest rates and to hedge a portion of future anticipated currency transactions. The counterparties are primarily major financialinstitutions.Interest Rate RiskWe have the ability to manage our interest rate risk by balancing the amount of our fixed rate and variable rate debt. For fixed rate debt, interest rate changesaffect the fair market value of such debt but do not impact earnings or cash flows. Conversely for variable rate debt, interest rate changes generally do notaffect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant. The interest on the TermLoan Facility is variable and is comprised of 1) an Applicable Margin in the case of Term loans of either (i) 5.00% for Base Rate Loans or (ii) 6.00% forLIBOR loans, and 2) LIBOR as quoted two business days prior to the commencement of an interest period provided that LIBOR at no time falls below 1.00%.The Company entered into an interest rate swap contract to fix the interest rate on an initial aggregate amount of $80.0 million of its initial $175.0 million ofvariable rate debt thereby reducing exposure to interest rate changes. At December 31, 2017, the interest rate swap agreement was not designated as a hedginginstrument; therefore, our interest rate swap agreement has been marked-to-market and the fair value recorded in the Consolidated Balance Sheets with theoffsetting gain or loss recorded in interest and other expense in our Consolidated Statements of Operations.40Table of ContentsThe interest rate swap agreement is more fully described in Note 3 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K. Thefair value of the agreement at December 31, 2017 amounted to long-term asset of $0.5 million, which was included in other long-term assets in ourConsolidated Balance Sheets, and a current liability of $0.2 million, which was included in accrued liabilities and other in our Consolidated Balance Sheets.Foreign Currency RiskForeign currency risk is the risk that we will incur economic losses due to adverse changes in foreign currency exchange rates. We use forward exchangecontracts to hedge certain foreign currency transaction exposures. We estimate our projected revenues and purchases in certain foreign currencies or locationsand will hedge a portion or all of the anticipated long or short position. The contracts typically run from one month up to eighteen months. All existingforward foreign exchange contracts have been marked-to-market and the fair value of contracts recorded in the Consolidated Balance Sheets with theoffsetting noncash gain or loss recorded in our Consolidated Statements of Operations. We do not hold or issue foreign exchange options or forward contractsfor trading purposes.Outstanding foreign currency forward exchange contracts at December 31, 2017 are more fully described in Note 3 to our consolidated financial statements inItem 8 of this Annual Report on Form 10-K. The fair value of our contracts at December 31, 2017 amounted to a net liability of $0.6 million, which wasincluded in other current liabilities in our Consolidated Balance Sheets. The fair value of our contracts at December 31, 2016 amounted to a net liability of$1.1 million, which was included in other current liabilities in our Consolidated Balance Sheets. None of these contracts have been designated as cash flowhedges; thus, the change in fair value at each reporting date is reflected as a noncash charge (income) in our Consolidated Statements of Operations.Our primary exposures to foreign currency forward exchange contracts are Mexican peso/U.S. dollar and Japanese yen/Chinese yuan. At December 31, 2017and 2016, the potential reduction in earnings from a hypothetical instantaneous 10% adverse change in quoted foreign currency spot rates applied to foreigncurrency sensitive instruments would be immaterial.Foreign Currency TransactionsA portion of our revenues during the year ended December 31, 2017 were derived from manufacturing operations outside of the U.S. The results of operationsand the financial position of our operations in these other countries are primarily measured in their respective currency and translated into U.S. dollars. Aportion of the expenses incurred in these countries is in currencies different from which revenue is generated. As discussed above, from time to time, we enterinto forward exchange contracts to mitigate a portion of this currency risk. The reported income of these operations will be higher or lower depending on aweakening or strengthening of the U.S. dollar against the respective foreign currency.A portion of our long-term assets and liabilities at December 31, 2017 are based in our foreign operations and are translated into U.S. dollars at foreigncurrency exchange rates in effect as of the end of each period, with the effect of such translation reflected as a separate component of stockholders’ equity.Accordingly, our stockholders’ investment will fluctuate depending upon the weakening or strengthening of the U.S. dollar against the respective foreigncurrency. The principal currencies of exposure are the British Pound, Chinese Yuan, Euro, Czech Koruna, Australian Dollar, Japanese Yen, Mexican Peso,Indian Rupee and Ukrainian Hryvnia. Foreign currency translation favorably impacted fiscal year 2017 revenues by $0.5 million, or 0.1 percent.Effects of InflationInflation potentially affects us in two principal ways. First, any borrowings under our revolving credit facility is tied to prevailing short-term interest ratesthat may change as a result of inflation rates, translating into changes in interest expense. Second, general inflation can impact material purchases, labor andother costs. In many cases, we have limited ability to pass through inflation-related cost increases due to the competitive nature of the markets that we serve.Although inflation has not had a significant impact in the past few years, the rise in certain commodity prices in 2017 negatively impacted our margins.41Table of ContentsItem 8.Financial Statements and Supplementary DataINDEX TO CONSOLIDATED FINANCIAL STATEMENTSDocuments Filed as Part of this Annual Report on Form 10-K PageReport of Independent Registered Public Accounting Firm43Consolidated Balance Sheets as of December 31, 2017 and 201644Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 201545Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 201546Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2016 and 201547Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 201548Notes to Consolidated Financial Statements49Item 15 - Exhibits and Financial Statement Schedules7942Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of DirectorsCommercial Vehicle Group, Inc.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Commercial Vehicle Group, Inc. and subsidiaries (the Company) as of December 31, 2017and 2016, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in thethree‑year period ended December 31, 2017, and the related notes and financial statement schedule II: Valuation of Qualifying Accounts (collectively, theconsolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period endedDecember 31, 2017, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sinternal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 12, 2018 expressed an unqualified opinion on theeffectiveness of the Company’s internal control over financial reporting.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent withrespect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and ExchangeCommission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performingprocedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures thatrespond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating theoverall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ KPMG LLPWe have served as the Company’s auditor since 2012.Columbus, OhioMarch 12, 201843Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDecember 31, 2017 and 2016 2017 2016 (In thousands, except share andper share amounts)ASSETS Current Assets: Cash$52,244 $130,160Accounts receivable, net of allowances of $5,242 and $3,881, respectively108,595 97,793Inventories99,015 71,054Other current assets14,792 9,941Total current assets274,646 308,948Property, Plant and Equipment Land and buildings25,942 28,203Machinery and equipment183,556 167,541Construction in progress2,685 8,176Less accumulated depreciation(147,553) (137,879)Property, plant and equipment, net64,630 66,041Goodwill8,045 7,703Intangible assets, net of accumulated amortization of $8,533 and $7,048, respectively14,548 15,511Deferred income taxes, net20,273 28,587Other assets2,246 1,975TOTAL ASSETS$384,388 $428,765LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable$86,608 $60,556Accrued liabilities and other33,944 45,699Current portion of long-term debt3,191 —Total current liabilities123,743 106,255Long-term debt163,758 233,154Pension and other post-retirement liabilities15,450 18,938Other long-term liabilities6,695 2,728Total liabilities309,646 361,075Commitments and contingencies (Note 10) Stockholders’ Equity: Preferred stock, $.01 par value (5,000,000 shares authorized; no shares issued and outstanding)— —Common stock, $.01 par value (60,000,000 shares authorized; 30,219,278 and 29,871,354 shares issued andoutstanding, respectively);304 299Treasury stock, at cost: 1,175,795 and 1,014,413 shares, respectively(9,114) (7,753)Additional paid-in capital239,870 237,367Retained deficit(115,083) (113,378)Accumulated other comprehensive loss(41,235) (48,845)Total stockholders’ equity74,742 67,690TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$384,388 $428,765The accompanying notes are an integral part of these consolidated financial statements.44Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSYears Ended December 31, 2017, 2016 and 2015 2017 2016 2015 (In thousands, except per share amounts)Revenues$755,231 $662,112 $825,341Cost of revenues662,666 574,882 714,519Gross Profit92,565 87,230 110,822Selling, general and administrative expenses59,800 60,542 71,469Amortization expense1,320 1,305 1,327Operating Income31,445 25,383 38,026Other income(1,349) (769) (152)Interest expense19,149 19,318 21,359Income Before Provision for Income Taxes13,645 6,834 16,819Provision for income taxes15,350 49 9,758Net (loss) income(1,705) 6,785 7,061Less: Non-controlling interest in subsidiary’s income— — 1Net (loss) income attributable to CVG$(1,705) $6,785 $7,060(Loss) earnings per common share Basic$(0.06) $0.23 $0.24Diluted$(0.06) $0.23 $0.24Weighted average shares outstanding Basic29,942 29,530 29,209Diluted29,942 29,878 29,399The accompanying notes are an integral part of these consolidated financial statements.45Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)Years Ended December 31, 2017, 2016 and 2015 2017 2016 2015 (In thousands)Net (loss) income $(1,705) $6,785 $7,061Other comprehensive income (loss): Foreign currency translation adjustments 7,141 (3,234) (4,572)Minimum pension liability, net of tax 469 (5,957) 2,206Other comprehensive income (loss) 7,610 (9,191) (2,366)Comprehensive income (loss) $5,905 $(2,406) $4,695Less: Comprehensive loss attributed to noncontrolling interests — — (35)Comprehensive income (loss) attributable to CVG stockholders $5,905 $(2,406) $4,730The accompanying notes are an integral part of these consolidated financial statements.46Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYYears Ended December 31, 2017, 2016 and 2015 Common StockTreasuryStockAdditionalPaid-InCapitalRetainedDeficitAccum.OtherComp.LossTotal CVGStockholders’EquityNon-ControllingInterestTotal SharesAmount (In thousands, except share data )BALANCE -December 31, 201429,148,504$296$(6,622)$231,907$(129,492)$(37,288)$58,801$35$58,836Issuance of restrictedstock400,1954————4—4Surrender of commonstock by employees(99,920)(6)(417)———(423)—(423)Share-basedcompensation expense———2,853——2,853—2,853Total comprehensive(loss) income————7,061(2,366)4,695(35)4,660BALANCE -December 31, 201529,448,779$294$(7,039)$234,760$(122,431)$(39,654)$65,930$—$65,930Issuance of restrictedstock557,584$5$—$—$—$—$5$—$5Surrender of commonstock by employees(135,009)—(714)———(714)—(714)Share-basedcompensation expense———2,607——2,607—2,607Recognition of excesstax benefits on share-based compensationexpense————2,268—2,268—2,268Total comprehensive(loss) income————6,785(9,191)(2,406)—(2,406)BALANCE -December 31, 201629,871,354$299$(7,753)$237,367$(113,378)$(48,845)$67,690$—$67,690Issuance of restrictedstock509,306$5$—$—$—$—$5$—$5Surrender of commonstock by employees(161,382)—(1,361)———(1,361)—(1,361)Share-basedcompensation expense———2,503——2,503—2,503Total comprehensive(loss) income————(1,705)7,6105,905—5,905BALANCE -December 31, 201730,219,278$304$(9,114)$239,870$(115,083)$(41,235)$74,742$—$74,742The accompanying notes are an integral part of these consolidated financial statements.47Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYears Ended December 31, 2017, 2016 and 2015 2017 2016 2015 (In thousands)CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income$(1,705) $6,785 $7,061Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization15,344 16,451 17,710Provision for doubtful accounts5,622 5,552 4,640Noncash amortization of debt financing costs1,251 840 1,059Loss on early extinguishment of debt— — 591Shared-based compensation expense2,503 2,607 2,853(Gain) loss on sale of assets(586) 80 596Deferred income taxes7,992 (2,525) 8,157Noncash (gain) loss on forward exchange contracts(726) 603 151Impairment of equipment held for sale— 616 —Change in other operating items: Accounts receivable(13,794) 25,501 166Inventories(25,104) 2,993 6,761Prepaid expenses(814) (978) (3,743)Accounts payable23,250 (4,263) (3,642)Accrued liabilities(12,284) (1,997) 8,211Other operating activities, net1,308 (2,900) 4,728Net cash provided by operating activities2,257 49,365 55,299CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment(13,458) (11,429) (14,685)Proceeds from disposal/sale of property, plant and equipment2,682 37 108Proceeds from corporate-owned life insurance policies— 2,489 —Other investing activities, net— — 71Net cash used in investing activities(10,776) (8,903) (14,506)CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of Term Loan Facility175,000——Repayment of Term Loan principal(2,188)——Surrender of common stock by employees(1,361) (714) (417)Redemption of Notes(235,000) ——(15,000)Prepayment charge for redemption of 7.875% Notes(1,543) — —Prepayment of Term Loan Facility Discount(3,500) — —Payment of Debt Issuance Costs(4,256) — —Early payment fee on debt and other debt issuance costs— — (591)Net cash used in financing activities(72,848) (714) (16,008)EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH3,451 (1,782) (2,682)NET (DECREASE) INCREASE IN CASH(77,916) 37,966 22,103CASH: Beginning of period130,160 92,194 70,091End of period$52,244 $130,160 $92,194SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest$18,572 $18,684 $19,939Cash paid for income taxes, net$3,276 $2,495 $1,545Unpaid purchases of property and equipment included in accounts payable$109 $488 $905The accompanying notes are an integral part of these consolidated financial statements.48Table of ContentsCOMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears Ended December 31, 2017, 2016 and 2015 1.OrganizationCommercial Vehicle Group, Inc. (and its subsidiaries) is a leading supplier of a full range of cab related products and systems for the global commercialvehicle market, including the medium- and heavy-duty truck (“MD/HD Truck”) market, the medium- and heavy-duty construction vehicle market, and thebus, agriculture, military, specialty transportation, mining, industrial equipment and off-road recreational markets. References herein to the "Company","we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.We have manufacturing operations in the United States, Mexico, United Kingdom, Czech Republic, Ukraine, China, India and Australia. Our products areprimarily sold in North America, Europe, and the Asia-Pacific region.Our products include seats and seating systems (“Seats”); trim systems and components (“Trim”); cab structures, sleeper boxes, body panels and structuralcomponents; mirrors, wipers and controls; and electric wire harness and panel assemblies designed for applications primarily in commercial vehicles.We are differentiated from automotive industry suppliers by our ability to manufacture low volume, customized products on a sequenced basis to meet therequirements of our customers. We believe our products are used by a majority of the North American MD/HD Truck and certain leading global constructionand agriculture original equipment manufacturers (“OEMs”), which we believe creates an opportunity to cross-sell our products.Our operations are comprised of two reportable segments, Global Truck and Bus (“GTB”) and Global Construction and Agriculture (“GCA”). The Company’sChief Operating Decision Maker (“CODM”), its President and Chief Executive Officer, reviews financial information for these two reportable segments andmakes decisions regarding the allocation of resources based on these segments.Unless otherwise indicated, all amounts are in thousands, except share and per share amounts.2.Significant Accounting PoliciesPrinciples of Consolidation - The accompanying consolidated financial statements include the accounts of our wholly-owned or controlled subsidiaries. Allintercompany accounts and transactions have been eliminated in consolidation.Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. of America (“U.S. GAAP”)requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significantestimates include allowance for doubtful accounts, returns and allowances, inventory reserves, goodwill, intangible and long-lived assets, pension and otherpost-retirement benefits, product warranty reserves, litigation reserves, and income tax valuation allowances. Actual results may differ materially from thoseestimates.Reclassifications - Certain reclassifications to the Consolidated Cash Flows have been made to prior year amounts to conform to current year presentation.Cash - Cash consists of deposits with high credit-quality financial institutions.Accounts Receivable - Trade accounts receivable are stated at current value less allowances, which approximates fair value. We review our receivables on anongoing basis to ensure that they are properly valued and collectible. This is accomplished through two contra-receivable accounts - returns and allowancesand allowance for doubtful accounts.Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting thevalue of receivables. This amount is estimated based on historical trends and current market conditions, with the offset to revenues.The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ inability to pay. This allowance is maintained at alevel that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs andrecoveries and current economic market conditions. As we monitor our receivables, we identify customers that may have payment problems, and we adjustthe allowance accordingly, with the offset49Table of Contentsto selling, general and administrative expense. Account balances are charged off against the allowance when recovery is considered remote.Inventories - Inventories are valued at the lower of first-in, first-out cost or market. Inventory quantities on-hand are regularly reviewed and when necessaryprovisions for excess and obsolete inventory are recorded based primarily on our estimated production requirements, taking into consideration expectedmarket volumes and future potential use.Property, Plant and Equipment - Property, plant and equipment are stated at cost, net of accumulated depreciation. For financial reporting purposes,depreciation is computed using the straight-line method over the following estimated useful lives:Buildings and improvements15 to 40 yearsMachinery and equipment3 to 20 yearsTools and dies3 to 7 yearsComputer hardware and software3 to 5 yearsExpenditures for maintenance and repairs are charged to expense as incurred. Expenditures for major betterments and renewals that extend the useful lives ofproperty, plant and equipment are capitalized and depreciated over the remaining useful lives of the asset. When assets are retired or sold, the cost and relatedaccumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Leasehold improvementsare amortized using the straight-line method over the estimated useful lives of the improvements or the term of the lease, whichever is shorter. Accelerateddepreciation methods are used for tax reporting purposes. Depreciation expense for each of the years ended December 31, 2017, 2016 and 2015 was $14.0million, $15.1 million and $16.4 million, respectively.We review long-lived assets for recoverability whenever events or changes in circumstances indicate that carrying amounts of an asset group may not berecoverable. Our asset groups are established by determining the lowest level of cash flows available. If the estimated undiscounted cash flows are less thanthe carrying amounts of such assets, we recognize an impairment loss in an amount necessary to write down the assets to fair value as estimated from expectedfuture discounted cash flows. Estimating 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.Revenue Recognition - We recognize revenue when 1) delivery has occurred or services have been rendered, 2) persuasive evidence of an arrangement exists,3) there is a fixed or determinable price, and 4) collectability is reasonably assured. Title on our products generally passes to the customer when product isshipped from our facilities to our customers.Income Taxes - We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financialstatements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets andliabilities based on enacted tax laws and rates expected to be in place when the deferred tax items are realized. In assessing the realizability of deferred taxassets, we consider whether it is more likely than not that a portion of the deferred tax assets will not be realized. We provide a valuation allowance fordeferred tax assets when it is more likely than not that a portion of such deferred tax assets will not be realized.We evaluate tax positions for recognition by determining, based on the weight of available evidence, whether it is more likely than not the position will besustained upon audit. Any interest and penalties related to our uncertain tax positions are recognized in income tax expense.On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform") was signed into law. The U.S. Tax Reform significantly revised the U.S.corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, establishing a quasiterritorial tax system and imposing a one-time tax on the deemed repatriation of earnings of foreign subsidiaries. The tax provision related to the deemedrepatriation of accumulated untaxed earnings of foreign subsidiaries represents the Company's best estimate. This provisional amount incorporatesassumptions made based upon the Company's current interpretation of the U.S. Tax Reform and may change as the Company receives additional clarification,implementation guidance and finalization of foreign tax returns. Any adjustments to the provisional amount will be recognized as a component of theprovision for income taxes in the period in which such adjustments are determined, but in any event no later than the fourth quarter of 2018.Due to the complexity of the new Global Intangible Low-Taxed Income (“GILTI”) tax rules, the Company continues to evaluate this provision of the U.S.Tax Reform and the application of ASC 740, Income Taxes. The Company will analyze its global activities to determine whether it expects to have futureinclusions in U.S. taxable income related to GILTI provisions, and is not yet able50Table of Contentsto reasonably estimate the impact of this provision of the U.S. Tax Reform. Therefore, the Company has not made a policy decision or any adjustmentsrelated to potential GILTI tax in its financial statements.Comprehensive Income (Loss) - Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions andother events and circumstances from non-owner sources. Comprehensive income (loss) represents net income adjusted for foreign currency translationadjustments and minimum pension liability adjustments. See Note 15 for a rollforward of activity in accumulated comprehensive loss.Fair Value of Financial Instruments - The fair value framework requires the categorization of assets and liabilities into three levels based upon theassumptions (i.e., inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requiressignificant 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 quotedprices for identical assets or liabilities in inactive markets.Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.Concentrations of Credit Risk - Financial instruments that potentially subject us to concentrations of credit risk consist primarily of accounts receivable. Wesell products to various companies throughout the world in the ordinary course of business. We routinely assess the financial strength of our customers andmaintain allowances for anticipated losses. As of December 31, 2017 and 2016, receivables from our largest customers, A.B. Volvo, Daimler Trucks,Caterpillar, Navistar, John Deere and PACCAR, represented approximately 59% and 64% of total receivables, respectively.Foreign Currency Translation - Our functional currency is the local currency. Accordingly, all assets and liabilities of our foreign subsidiaries are translatedusing exchange rates in effect at the end of the period and revenue and costs are translated using average exchange rates for the period. The related translationadjustments are reported in accumulated other comprehensive loss in stockholders’ equity. Translation gains and losses arising from transactionsdenominated in a currency other than the functional currency of the entity are included in the results of operations.Foreign Currency Forward Exchange Contracts - We use forward exchange contracts to hedge certain of the foreign currency transaction exposures. Weestimate our projected revenues and purchases in certain foreign currencies or locations, and hedge a portion of the anticipated long or short position. Thecontracts typically run from one month up to eighteen months. All forward foreign exchange contracts are not designated as hedging instruments and havebeen 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 ourConsolidated Statements of Operations. We do not hold or issue foreign exchange options or forward contracts for trading purposes.Interest Rate Swap Agreement - We use an interest rate swap agreement to fix the interest rate on variable interest debt thereby reducing exposure to interestrate changes. The interest rate swap contract was not designated as a hedging instrument; therefore, our interest rate swap contract has been marked-to-marketand the fair value of the contract recorded in the Consolidated Balance Sheets with the offsetting gain or loss recorded in interest and other expense in ourConsolidated Statements of Operations.Recently Issued Accounting PronouncementsIn February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, "Income Statement -Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The amendmentsin ASU No. 2018-02 allow for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from theTax Cuts and Jobs Act. The Company will record a reclassification for the restatement of deferred taxes associated with the Company's pension and post-retirement plans. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018.In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting". ASU 2017-09provides clarity of accounting for modifications of share-based awards. The Company does not anticipate this ASU will have a material impact on share-based compensation. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017.In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic PensionCost and Net Periodic Postretirement Benefit Cost". ASU 2017-07 requires employers to report service costs in the same line item as compensation costsarising from services rendered by associated employees during the period. The Company does not anticipate this ASU to have a material impact on itspension disclosures. ASU 2017-07 is effective for fiscal years beginning after December 15, 2017.51Table of ContentsIn January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU2017-04 provides simplification for the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Annual impairmenttests should be completed by comparing the fair value of a reporting unit to its carrying amount and impairment should not exceed the goodwill allocated tothe reporting unit. Additionally, this ASU eliminated the requirement to assess reporting units with zero or negative carrying amounts. The Companyanticipates this ASU to simplify a component of its goodwill assessment. The Company does not anticipate an impact to its overall valuation of goodwill.ASU 2017-04 is effective for fiscal years beginning after December 15, 2019.In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". ASU 2017-01 providesadditional guidance to clarify acquisition transactions and whether they should be accounted for as an acquisition of a business or assets. This ASU will onlyimpact the Company to the extent we execute a business combination. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017.Revenue Recognition GuidanceIn May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-09 supersedes the revenuerecognition requirements in ASC Topic 605, "Revenue Recognition", and most industry-specific guidance. The core principle of the guidance is that anentity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which theentity expects to be entitled in exchange for those goods or services. Companies will be required to provide more disclosure regarding the nature, amount,timing and uncertainty of cash flows. Additionally, companies must disclose performance obligations to customers and significant inputs, assumptions andmethodologies impacting the timing of recognition. During 2016, the FASB also issued ASU 2016-08, "Revenue from Contracts with Customers: Principalversus Agent Considerations (Reporting Revenue Gross versus Net)"; ASU 2016-10, "Revenue from Contracts with Customers: Identifying PerformanceObligations and Licensing"; ASU 2016-11, "Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to StaffAnnouncements at the March 3, 2016 EITF Meeting"; ASU 2016-12, "Revenue from Contracts with Customers: Narrow-Scope Improvements and PracticalExpedients"; and ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers", all of which were issuedto improve and clarify the guidance in ASU 2014-09.The mandatory adoption date of each of the revenue recognition ASUs referenced above is January 1, 2018. Under guidance in effect as of December 31,2017, we typically recognized revenue when products are shipped and risk of loss has transferred to the customer. Under the new guidance, the customizednature of some of our products and provisions of some of our customer contracts provide us with an enforceable right to payment. Based on our currentcustomer contracts, we do not anticipate the need to adjust the timing of when revenue is recognized. We evaluated our customer owned tooling, engineeringand design services, and pre-production customer arrangements under the new guidance and determined that we would not be required to change the timingof revenue recognition or presentation of revenue and costs associated with such arrangements. We assessed standard customer warranties to determine if theyrepresent a material right to the customer and determined that the new guidance will not have a material impact on our Consolidated Balance Sheets,Statements of Operations, Statements of Stockholders' Equity, or Statements of Cash Flows. We will apply the cumulative effect transition method.Lease Accounting GuidanceIn February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU 2016-02 is intended to increase transparency and comparability amongcompanies by recognizing lease assets and liabilities and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal yearsbeginning after December 15, 2018. The Company is assessing the impact of this pronouncement and anticipates it will impact the presentation of our leaseassets and liabilities and associated disclosures by the recognition of lease assets and liabilities that are not included in the Consolidated Balance Sheetsunder existing accounting guidance. The Company is reviewing its population of lease arrangements, including facility leases and machinery and equipmentleases. The lease terms are not generally complex in nature. The Company will update its accounting policies as we complete our assessment of leases. TheCompany will also review other arrangements which could contain embedded lease arrangements to be considered under the revised guidance. The Companywill determine the impact of the new guidance on its current lease arrangements that are expected to remain in place during 2019 and beyond.3.Fair Value MeasurementAt December 31, 2017, our financial instruments consisted of cash, accounts receivable, accounts payable, accrued liabilities and our revolving creditfacility. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of theinterest cost associated with such instruments.Foreign Currency Forward Exchange Contracts. Our derivative assets and liabilities represent foreign exchange purchase and sales contracts that aremeasured at fair value using observable market inputs such as forward rates, interest rates, our own credit52Table of Contentsrisk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2.Interest Rate Swap Agreement. The Company’s policy is to manage its interest expense by using a mix of fixed and variable rate debt. To manage itsexposure to variable interest rates in a cost-efficient manner, the Company enters into interest rate swaps in which the Company agrees to exchange, atspecified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Theseswaps are designed to mitigate changes in the interest rate of a portion of the outstanding borrowings. The Company entered into a series of interest rateswaps to initially cover $80 million of its outstanding debt under the senior secured term loan facility. The Company expects these derivatives to remaineffective during the remaining term of the swaps and will record the impact in interest expense in the Consolidated Statements of Operations.The fair values of our derivative assets and liabilities measured on a recurring basis as of December 31 are categorized as follows: 2017 2016 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3Derivative assetsForeign exchangecontract 1$20 $— $20 $— $142 $— $142 $—Interest rate swapagreement 2$515 $— $515 $— $— $— $— $—Derivative liabilitiesForeign exchangecontract 3$627 $— $627 $— $1,234 $— $1,234 $—Interest rate swapagreement 4$246 $— $246 $— $— $— $— $— 1 Presented in the Consolidated Balance Sheets in other current assets and based on observable market transactions of spot and forward rates.2 Presented in Consolidated Balance Sheets in other assets and based on observable market transactions of forward rates.3 Presented in the Consolidated Balance Sheets in accrued liabilities and other and based on observable market transactions of spot and forward rates.4 Presented in Consolidated Balance Sheets in accrued liabilities and other, and based on observable market transactions of forward rates.The following table summarizes the notional amount of our open foreign exchange contracts at December 31: 2017 2016 U.S. $Equivalent U.S.EquivalentFair Value U.S. $Equivalent U.S.EquivalentFair ValueCommitments to buy or sell currencies$17,491 $16,838 $18,593 $17,213We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for derivatives not designated as hedginginstruments at December 31: 2017 2016 Location of Gain (Loss)Recognized in Income onDerivatives Amount of Gain (Loss)Recognized in Income onDerivativesForeign exchange contractsCost of Revenues $457 $(603)Interest rate swap agreementInterest Income $269 $—Long-term Debt. The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs. Based on the use of these inputs, ourlong-term debt is classified as Level 2. The carrying amounts and fair values of our long-term debt at December 31 are as follows:53Table of Contents 2017 2016 CarryingAmount Fair Value CarryingAmount Fair Value7.875% senior secured notes due April 15, 2019$— $— $233,154 $231,391Term loan and security agreement 1$166,949 $169,972 $— $—1 Presented in the Consolidated Balance Sheets as the current portion of long-term debt (net of current prepaid debt financing costs and current originalissue discount) of $3.2 million and long-term debt (net of long-term prepaid debt financing costs and long-term original issue discount) of $163.8million.Long-lived Assets. There are no fair value measurements of our long-lived assets and definite-lived intangible assets measured on a non-recurring basis as ofDecember 31, 2017 and December 31, 2016, except for an impairment of $0.6 million recognized in the first quarter of 2016 for an asset held for sale basedon the estimated selling price less selling costs of $0.8 million . The asset was classified as held for sale at its estimated fair value of $0.8 millionas ofDecember 31, 2016. The impairment was recorded in selling, general and administrative expense in the Consolidated Statements of Operations. The asset wasclassified as Level 2.4.InventoriesInventories consisted of the following as of December 31: 2017 2016Raw materials$73,026 $46,352Work in process10,136 11,234Finished goods15,853 13,468 $99,015 $71,0545.Accrued and Other LiabilitiesAccrued and other liabilities consisted of the following as of December 31: 2017 2016Compensation and benefits$12,904 $10,435Taxes payable3,564 2,517Warranty costs3,490 5,552Insurance2,432 5,237Legal and professional fees1,588 2,827Accrued freight1,544 1,465Accrued services1,207 1,309Deferred tooling revenue806 2,773Interest146 3,892Restructuring43 2,271Other6,220 7,421$33,944$45,699 6.DebtDebt consisted of the following at December 31: 2017 20167.875% senior secured notes due April 15, 2019$— $233,154Term loan and security agreement 1$166,949$—1 Presented in the Consolidated Balance Sheets as the current portion of long-term debt (net of current prepaid debt financing costs of $0.6 million andcurrent original issue discount of $0.6 million) of $3.2 million and long-term debt (net of long-term prepaid debt financing costs of $2.2 million andlong-term original issue discount of 2.4 million) of $163.8 million.Term Loan and Security Agreement54Table of ContentsOn April 12, 2017, the Company entered into a $175.0 million senior secured term loan credit facility (the “Term Loan Facility”), maturing on April 12,2023, pursuant to a term loan and security agreement (the “TLS Agreement”) with the Company and certain subsidiaries of the Company party thereto asguarantors, Bank of America, N.A., as administrative agent, and other lender parties thereto. Concurrent with the closing of the TLS Agreement, the proceedsof the Term Loan Facility were used, together with cash on hand in the amount of $74.0 million, to (a) fund the redemption, satisfaction and discharge of allof the Company’s outstanding 7.875% notes along with accrued interest; and (b) pay related transaction costs, fees and expenses. In conjunction with theredemption of the 7.875% notes, the Company recognized a non-cash charge of $1.6 million in the second quarter of 2017 to write-off deferred financing feesand a prepayment charge for interest of $1.5 million paid to bondholders during the 30-day notification period associated with the redemption ofthe 7.875% notes.The interest on the Term Loan Facility is variable and is comprised of 1) an Applicable Margin in the case of Term loans of either (i) 5.00% for Base RateLoans or (ii) 6.00% for LIBOR loans, and 2) LIBOR as quoted two business days prior to the commencement of an interest period provided that LIBOR at notime falls below 1.00%. There was $0.1 million in accrued interest as of December 31, 2017. The unamortized deferred financing fees of $2.8million and original issue discount of $3.0 million are netted against the aggregate book value of the outstanding debt to arrive at a balance of $166.9million as of December 31, 2017 and are being amortized over the remaining life of the agreement. The weighted average interest rate was 7.22% as ofDecember 31, 2017.The Term Loan Facility is a senior secured obligation of the Company. Our obligations under the TLS Agreement are guaranteed by the Company and certainsubsidiaries of the Company. The obligations of the Company and the guarantors under the TLS Agreement are secured (subject to certain permitted liens) bya first-priority lien on substantially all of the non-current assets (and a second priority lien on substantially all of the current assets) of the Company and theguarantors, including a first priority pledge of certain capital stock of the domestic and foreign subsidiaries directly owned by the Company and theguarantors. The liens, the security interests and all of the obligations of the Company and the guarantors and all provisions regarding remedies in an event ofdefault are subject to an intercreditor agreement among the Company, the guarantors, the agent for the lenders party to the Company’s revolving creditfacility and the collateral agent under the TLS Agreement.Terms, Covenants and Compliance StatusThe TLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to: incur additionaldebt; pay dividends or other restricted payments; make investments; engage in transactions with affiliates; create liens on assets; and consolidate, merge ortransfer all or substantially all of our assets and the assets of our subsidiaries. In addition, the TLS Agreement contains a financial maintenance covenantrequiring the Company to maintain a total leverage ratio as of the last day of any fiscal quarter not to exceed the ratios set forth in the applicable table withinthe TLS Agreement. The TLS Agreement also contains customary reporting and other affirmative covenants. We were in compliance with the covenants asof December 31, 2017.The TLS Agreement requires the Company to repay principal of approximately $1.1 million on the last day of each quarter commencing with the quarterending September 30, 2017 with the remaining outstanding principal due at maturity on April 12, 2023.Voluntary prepayments of amounts outstanding under the TLS Agreement are permitted at any time, without premium or penalty; provided, however, that aprepayment penalty equal to 1.0% of the prepaid amount is required to be paid in connection with certain events that have the effect of reducing the all-in-yield applicable to the term loan during the 12 months following the initial funding thereof. In addition, to the extent applicable, customary LIBOR breakagecharges may be payable in connection with any prepayment.The TLS Agreement requires the Company to make mandatory prepayments with excess cash flow, the proceeds of certain asset dispositions and upon thereceipt of insurance or condemnation proceeds, and in the case of an asset disposition or insurance or condemnation event, to the extent the Company doesnot reinvest the proceeds within the periods set forth in the TLS Agreement.The TLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:• nonpayment of obligations when due;• breach of covenants or other agreements in the TLS Agreement; and• defaults in payment of certain other indebtedness.Revolving Credit Facility55Table of ContentsOn April 12, 2017, Commercial Vehicle Group Inc. and certain subsidiaries, collectively the "borrowers", entered into the Third Amended and Restated Loanand Security Agreement ("Third ARLS Agreement") increasing its senior secured revolving credit facility to $65 million from $40 million and setting thematurity date to April 12, 2022. Up to an aggregate of $10.0 million is available to the borrowers for the issuance of letters of credit, which reducesavailability under the Third ARLS Agreement.The Third ARLS Agreement included amendments to certain definitions and covenants including, but not limited to, amendments to (i) permitted debt, (ii)permitted distributions, (iii) distribution of assets, and (iv) the calculation of EBITDA. The Third ARLS Agreement contains a fixed charge coverage ratiomaintenance covenant of 1.00:1.00 and amended the availability threshold for triggering compliance with the fixed charge coverage ratio.The borrowers’ obligations under the revolving credit facility are secured (subject to certain permitted liens) by a first-priority lien on substantially all of thecurrent assets (and a second priority lien on substantially all of the non-current assets) of the borrowers. Each of the Company and each other borrower isjointly and severally liable for the obligations under the revolving credit facility and unconditionally guarantees the prompt payment and performancethereof. The liens, the security interests and all of the obligations of the Company and each other borrower and all provisions regarding remedies in an eventof default are subject to an intercreditor agreement among the Company, certain of its subsidiaries, the agent under the Third ARLS Agreement and thecollateral agent for the lenders party to the Company’s term loan credit facility.The applicable margin is based on average daily availability under the revolving credit facility as follows:Level Average DailyAvailability Domestic BaseRate Loans LIBORRevolver LoansIII ≥ to $24,000,000 0.50% 1.50%II > $12,000,000 but < $24,000,000 0.75% 1.75%I ≤ to $12,000,000 1.00% 2.00%The applicable margin will be subject to increase or decrease by the agent on the first day of the calendar month following each fiscal quarter end. If the agentis unable to calculate average daily availability for a fiscal quarter due to borrowers' failure to deliver a borrowing base certificate when required, theapplicable margin will be set at Level I until the first day of the calendar month following receipt of a borrowing base certificate. As of December 31, 2017,the applicable margin was set at Level III.The unamortized deferred financing fees associated with our revolving credit facility of $0.9 million and $0.1 million as of December 31, 2017 andDecember 31, 2016, respectively, are being amortized over the remaining life of the agreement. As of December 31, 2017 and December 31, 2016, we did nothave borrowings under the revolving credit facility and had outstanding letters of credit of $2.1 million and $2.5 million, respectively. We had borrowingavailability of $58.6 million at December 31, 2017.The Company pays a commitment fee to the lenders equal to 0.25% per annum of the unused amounts under the revolving credit facility.Terms, Covenants and Compliance StatusThe Third ARLS Agreement requires the maintenance of a minimum fixed charge coverage ratio. The borrowers however are not required to comply with thefixed charge coverage ratio requirement for as long as the borrowers maintain borrowing availability under the revolving credit facility at the greater of (i)$5,000,000 or (ii) ten percent (10%) of the revolving commitments. If borrowing availability falls below this threshold at any time, the borrowers would berequired to comply with the fixed charge coverage ratio of 1.00:1.00 as of the end of each relevant fiscal quarter, and would be required to continue tocomply with these requirements until the borrowers have borrowing availability in excess of this threshold for 60 consecutive days. Since the Company hadborrowing availability in excess of this threshold from December 31, 2016 through December 31, 2017, the Company was not required to comply with theminimum fixed charge coverage ratio covenant during the year ended December 31, 2017.The Third ARLS Agreement contains customary restrictive covenants, including limitations on our ability and the ability of our subsidiaries to: incuradditional debt; pay dividends or other restricted payments; make investments; engage in transactions with affiliates; create liens on assets; and consolidate,merge or transfer all or substantially all of our assets and the assets of our subsidiaries. The Third ARLS Agreement also contains customary reporting andother affirmative covenants. The Company was in compliance with these covenants as of December 31, 2017.Voluntary prepayments of amounts outstanding under the revolving credit facility are permitted at any time, without premium or penalty, other than (to theextent applicable) customary LIBOR breakage charges and the aforementioned prepayment penalty.56Table of ContentsThe Third ARLS Agreement requires the borrowers to make mandatory prepayments upon the receipt of insurance or condemnation proceeds in respect of therevolving credit facility’s priority collateral.The Third ARLS Agreement includes customary events of default (subject in certain cases to customary grace and cure periods) which include, among others:•nonpayment of obligations when due;•breach of covenants or other agreements in the Third ARLS Agreement;•a change of control; and•defaults in payment of certain other indebtedness, including the term loan credit facility.7.Goodwill and Intangible AssetsOur intangible assets as of December 31 were comprised of the following: December 31, 2017 Weighted-AverageAmortizationPeriod GrossCarryingAmount AccumulatedAmortization Currency TranslationAdjustment NetCarryingAmountDefinite-lived intangible assets: Trademarks/Tradenames23 years $8,472 $(3,639) $54 $4,887Customer relationships15 years 14,609 (4,991) 43 9,661 $23,081 $(8,630) $97 $14,548 December 31, 2016 Weighted-AverageAmortizationPeriod GrossCarryingAmount AccumulatedAmortization CurrencyTranslationAdjustment NetCarryingAmountDefinite-lived intangible assets: Trademarks/Tradenames23 years $8,378 $(3,283) $90 $5,185Customer relationships15 years 14,181 (4,027) 172 10,326 $22,559 $(7,310) $262 $15,511The aggregate intangible asset amortization expense was $1.3 million for each of the fiscal years ended December 31, 2017, 2016 and 2015. The estimatedintangible asset amortization expense for each of the five succeeding fiscal years ending after December 31, 2017 is $1.3 million per year through December31, 2019 and $1.2 million in 2020 through 2022.The changes in the carrying amounts of goodwill for the years ended December 31 are as follows: 2017 2016Balance - Beginning of the year$7,703 $7,834Currency translation adjustment342 (131)Balance - End of the year$8,045 $7,7038.Income TaxesPre-tax income (loss) consisted of the following for the years ended December 31: 2017 2016 2015Domestic$(2,093) $(13,928) $16,819Foreign15,738 20,762 —Total$13,645 $6,834 $16,819A reconciliation of income taxes computed at the statutory rates to the reported income tax provision for the years ended December 31 follows:57Table of Contents 2017 2016 2015Federal provision at statutory rate$4,776 $2,392 $5,887U.S./Foreign tax rate differential(919) (1,842) 1Foreign non-deductible expenses(2,006) 743 (479)Foreign tax provision615 336 296State taxes, net of federal benefit73 (171) 556State tax rate change, net of federal benefit(264) 541 32Change in uncertain tax positions81 114 236Change in valuation allowance2,475 (1,858) 3,283Tax credits(152) (104) (283)Share-based compensation(657) (108) 459Change in U.S. corporate tax rate7,214 — —Repatriation of foreign earnings3,964 — —Other150 6 (230)Provision for income taxes$15,350 $49 $9,758The provision (benefit) for income taxes for the years ended December 31 follows: 2017 2016 2015 Current Deferred Total Current Deferred Total Current Deferred TotalFederal$2,954 $7,716 $10,670 $(4) $(1,801) $(1,805) $(153) $6,077 $5,924State and local362 (371) (9) (27) 1,021 994 380 389 769Foreign4,042 647 4,689 2,605 (1,745) 860 1,374 1,691 3,065Total$7,358 $7,992 $15,350 $2,574 $(2,525) $49 $1,601 $8,157 $9,758A summary of deferred income tax assets and liabilities as of December 31 follows: 2017 2016Noncurrent deferred tax assets: Amortization and fixed assets$1,835 $4,109Accounts receivable396 815Inventories2,254 2,899Pension obligations2,903 4,623Warranty obligations973 2,519Accrued benefits787 1,060Foreign exchange contracts89 460Restricted stock73 145Tax credits carryforwards1,611 2,238Net operating loss carryforwards24,784 20,130Other temporary differences not currently available for tax purposes(411) 2,135Total noncurrent deferred tax assets$35,294 $41,133Valuation allowance(15,021) (12,546)Net noncurrent deferred tax assets$20,273 $28,587Noncurrent deferred tax liabilities: Amortization and fixed assets$(100) $(764)Net operating loss carryforwards— 2,178Other temporary differences not currently available for tax purposes60 (1,430)Total noncurrent tax liabilities(40) (16)Total net deferred tax asset$20,233 $28,57158Table of ContentsOur overall deferred tax position was a net deferred tax asset of $20.2 million. The $8.3 million change in our net deferred tax asset position includes a $7.2million reduction attributable to the decrease in U.S. corporate tax rate from 35% to 21% effective January 1, 2018. Staff Accounting Bulletin ("SAB") 118addresses the accounting implications of the U.S Tax Reform. Under SAB 118, the assessment of the $7.2 million remeasurement of our net deferred tax assetposition is complete.The U.S. Tax Reform gave rise to a provision of $4.0 million on the deemed repatriation of accumulated untaxed earnings of foreign subsidiaries. Under SAB118, the assessment of the $4.0 million of accumulated untaxed earnings of foreign subsidiaries is reasonably estimated. The measurement period to finalizeour calculations cannot extend beyond one year of the enactment date. Any adjustments recorded to the provisional amounts will be included in income fromoperations as an adjustment to tax expense in the period the amounts are determined.We assess whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence using a “morelikely than not” standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability,the duration of statutory carryforward periods, our experience with unused tax attributes expiring and tax planning alternatives. In making such judgments,significant weight is given to evidence that can be objectively verified.During 2017, we recorded additional valuation allowances of $2.3 million in certain foreign affiliates, notably Luxembourg and United Kingdom, due to pre-tax losses or a decrease in earnings in the current year. We increased a valuation allowance of $0.2 million for deferred assets associated with certain U.S. statetax net operating loss carry forwards. We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuationallowance, as discussed above. In the event that our actual results differ from our estimates or we adjust these estimates in future periods, the effects of theseadjustments could materially impact our financial position and results of operations.As of December 31, 2017, we had $71.5 million of foreign, $24.0 million of U.S. federal and $65.6 million of U.S. state net operating loss carryforwardsavailable to offset future taxable income. Utilization of these losses is subject to the tax laws of the applicable tax jurisdiction and may be limited by theability of certain subsidiaries to generate taxable income in the associated tax jurisdiction. Generally, our net operating loss carryforwards continue through2037. Although some of our net operating loss carryforwards expire beginning in 2018, there are certain tax jurisdictions with no expiration dates. We haveestablished valuation allowances for all net operating losses that we believe are more likely than not to expire before they can be utilized.As of December 31, 2017, we had $1.6 million of research and development tax credits being carried forward related to our U.S. operations. Utilization ofthese credits may be limited by the ability to generate federal taxable income in future years; the credits will expire between 2026 and 2038.As of December 31, 2017, cash of $38.2 million was held by foreign subsidiaries. We do not have any plans to repatriate the earnings held by our foreignaffiliates and consider these earnings to be indefinitely reinvested. Rather, we intend to use the cash to fund the growth of our foreign operations. Should ourplans change with respect to cash held by our foreign subsidiaries, we would accrue and pay the appropriate withholding and local income taxes.We file federal income tax returns in the U.S. and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subjectto income tax examinations by any of the taxing authorities for years before 2014.As of December 31, 2017, and 2016, we provided a liability of $0.5 million and $0.6 million, respectively, for unrecognized tax benefits related to U.S.federal and state, and foreign jurisdictions. These unrecognized tax benefits are netted against their related noncurrent deferred tax assets.We accrue interest and penalties related to unrecognized tax benefits through income tax expense. We had $0.3 million and $0.2 million accrued for thepayment of interest and penalties as of December 31, 2017 and December 31, 2016, respectively. Accrued interest and penalties are included in the $0.5million of unrecognized tax benefits.59Table of ContentsA reconciliation of the beginning and ending amount of unrecognized tax benefits (including interest and penalties) at December 31 follows: 2017 2016 2015Balance - Beginning of the year$628 $489 $27Gross increase - tax positions in prior periods68 40 445Gross decreases - tax positions in prior periods(38) — —Gross increases - current period tax positions29 103 44Lapse of statute of limitations(221) (4) (27)Currency translation adjustment19 — —Balance - End of the year$485 $628 $48960Table of Contents9.Segment Reporting and Geographic LocationsOperating segments are defined as components of an enterprise that are evaluated regularly by the Company’s CODM, which is our President and ChiefExecutive Officer. The Company has two reportable segments: the GTB Segment and the GCA Segment. Each of these segments consists of a number ofmanufacturing facilities. Certain of our facilities manufacture and sell products through both of our segments. Each manufacturing facility that sells productsthrough both segments is reflected in the financial results of the segment that has the greatest amount of sales from that manufacturing facility. Our segmentsare more specifically described below.The GTB Segment manufactures and sells the following products: •Seats, Trim, sleeper boxes, cab structures, structural components and body panels. These products are sold primarily to the MD/HD Truck markets inNorth America;•Seats to the truck and bus markets in Asia-Pacific and Europe;•Mirrors and wiper systems to the truck, bus, agriculture, construction, rail and military markets in North America;•Trim to the recreational and specialty vehicle markets in North America; and•Aftermarket seats and components in North America.The GCA Segment manufactures and sells the following products: •Electric wire harness assemblies and Seats for construction, agricultural, industrial, automotive, mining and military industries in North America,Europe and Asia-Pacific;•Seats to the truck and bus markets in Asia-Pacific and Europe;•Wiper systems to the construction and agriculture markets in Europe;•Office seating in Europe and Asia-Pacific; and•Aftermarket seats and components in Europe and Asia-Pacific.Corporate expenses consist of certain overhead and shared costs that are not directly attributable to the operations of a segment. For purposes of businesssegment performance measurement, some of these costs that are for the benefit of the operations are allocated based on a combination of methodologies. Thecosts that are not allocated to a segment are considered stewardship costs and remain at corporate in our segment reporting.The following table presents segment revenues, gross profit, depreciation and amortization expense, selling, general and administrative expenses, operatingincome, capital expenditures and other items for the year ended December 31, 2017. The table does not include assets as the CODM does not review assets bysegment. For the year ended December 31, 2017 GlobalTruck &Bus GlobalConstruction &Agriculture Corporate/Other TotalRevenues External Revenues$455,864$299,367$—$755,231Intersegment Revenues1,90610,340(12,246)—Total Revenues$457,770$309,707$(12,246)$755,231Gross Profit$62,668$31,291$(1,394)$92,565Depreciation and Amortization Expense$7,875$4,736$2,733$15,344Selling, General & Administrative Expenses $21,507$16,845$21,448$59,800Operating Income$39,983$14,305$(22,843)$31,445 Capital Expenditures and Other Items: Capital Expenditures$6,290$5,324$1,953$13,567Other Items 1$777$1,146$2,377$4,3001 Other items include costs associated with restructuring activities, including employee severance and retention costs, lease cancellation costs,building repairs, costs to transfer equipment, and litigation settlement costs associated with a consulting contract.61Table of ContentsThe following table presents segment revenues, gross profit, depreciation and amortization expense, selling, general and administrative expenses, operatingincome, capital expenditures and other items for the year ended December 31, 2016. The table does not include assets as the CODM does not review assets bysegment. For the year ended December 31, 2016 GlobalTruck &Bus GlobalConstruction &Agriculture Corporate/Other TotalRevenues External Revenues$415,154 $246,958 $— $662,112Intersegment Revenues1,125 7,066 (8,191) —Total Revenues$416,279 $254,024 $(8,191) $662,112Gross Profit$54,665 $34,060 $(1,495) $87,230Depreciation and Amortization Expense$8,545 $5,581 $2,325 $16,451Selling, General & Administrative Expenses$22,557 $18,240 $19,745 $60,542Operating Income$30,943 $15,680 $(21,240) $25,383 Capital Expenditures and Other Items: Capital Expenditures$6,384$4,609$924$11,917Other Items 1$2,712$723$688$4,1231 Other items include costs associated with restructuring activities, including employee severance and retention costs, lease cancellation costs,building repairs, costs to transfer equipment, and the write down of an asset held for sale.The following table presents segment revenues, gross profit, depreciation and amortization expense, selling, general and administrative expenses, operatingincome, capital expenditures and other items as of and for the year ended December 31, 2015. The table does not include assets as the CODM does not reviewassets by segment. For the year ended December 31, 2015 GlobalTruck &Bus GlobalConstruction &Agriculture Corporate/Other TotalRevenues External Revenues$564,651 $260,690 $— $825,341Intersegment Revenues618 10,937 (11,555) —Total Revenues$565,269 $271,627 $(11,555) $825,341Gross Profit$85,702 $28,627 $(3,507) $110,822Depreciation and Amortization Expense$8,909 $5,855 $2,946 $17,710Selling, General & Administrative Expenses$25,263 $20,442 $25,764 $71,469Operating Income$59,252 $8,044 $(29,270) $38,026 Capital Expenditures and Other Items: Capital Expenditures$7,579 $4,688 $3,323 $15,590Other Items 1$1,838 $494 $— $2,3321 Other items include costs associated with restructuring activities, including employee severance and retention costs, lease cancellation costs,building repairs and costs to transfer equipment.The following table presents revenues and long-lived assets for the geographic areas in which we operate:62Table of Contents Years Ended December 31, 2017 2016 2015 Revenues Long-livedAssets Revenues Long-livedAssets Revenues Long-livedAssetsUnited States$560,412 $50,207 $496,473 $54,334 $635,627 $59,280All other countries194,819 14,423 165,639 11,707 189,714 11,681 $755,231 $64,630 $662,112 $66,041 $825,341 $70,961Revenues are attributed to geographic locations based on the geography from which the legal entity operates. Included in all other countries areintercompany sales eliminations.The following is the composition by product category of our revenues: Years Ended December 31, 2017 2016 2015 Revenues % Revenues % Revenues %Seats and seating systems$314,717 42 $280,575 42 $339,724 41Electric wire harnesses and panel assemblies189,154 25 149,417 23 154,417 19Trim systems and components150,228 20 132,623 20 179,713 22Cab structures, sleeper boxes, body panels andstructural components56,417 7 57,605 9 96,046 12Mirrors, wipers and controls44,715 6 41,892 6 55,441 6 $755,231 100 $662,112 100 $825,341 10010.Commitments and ContingenciesLeases - We lease office, warehouse and manufacturing space, and certain equipment under non-cancelable operating lease agreements that require us to paymaintenance, insurance, taxes and other expenses in addition to annual rentals. Lease expense under these arrangements was $12.0 million, $10.6 million and$11.3 million in 2017, 2016 and 2015, respectively. Capital lease agreements entered into by us are immaterial. Anticipated future lease costs are based inpart on certain assumptions to approximate minimum annual rental commitments at December 31, 2017 under non-cancelable operating leases are as follows:Year Ending December 31, 2018 $5,2842019 $3,7992020 $2,6702021 $2,5112022 $2,382 Thereafter $3,375Guarantees - We accrue for costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonablyestimated. 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 estimatesis more likely, the minimum is accrued. As of December 31, 2017 and 2016, we had no such guarantees.Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to workers'compensation claims, OSHA investigations, employment disputes, service provider disputes, intellectual property disputes, and disputes arising out ofalleged defects, breach of contracts, product warranties and environmental matters. Management believes that we maintain adequate insurance or we haveestablished reserves for issues that are probable and estimable in amounts that 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 thevarious legal actions and claims that are incidental to our business will not have a material adverse impact on the consolidated financial position, results ofoperations or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with assurance.Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Depending on theterms under which we supply products to our customers, a customer may hold us responsible for63Table of Contentssome or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to recordprovisions for estimated future customer warranty costs based on historical trends and for specific claims. These amounts, as they relate to the years endedDecember 31, 2017 and 2016 are included within accrued liabilities and other in the accompanying Consolidated Balance Sheets. The following presents asummary of the warranty provision for the years ended December 31: 2017 2016Balance - Beginning of the year$5,552 $7,580Provision for new warranty claims3,461 1,798Change in provision for preexisting warranty claims(1,065) 389Deduction for payments made(4,579) (3,819)Currency translation adjustment121 (396)Balance - End of year$3,490 $5,552Debt Payments - As disclosed in Note 6, the TLS Agreement requires the Company to repay a fixed amount of principal on a quarterly basis, make mandatoryprepayments of excess cash flows, and voluntary prepayments that coincide with certain events.The following table provides future minimum principal payments due on long-term debt for the next five fiscal years and the remaining years thereafter:Year Ending December 31,2018 $4,3752019 $4,3752020 $4,3752021 $4,3752022 $4,375Thereafter $150,93811.Stockholders’ EquityCommon Stock - Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $0.01 per share, with 30,219,278 and29,871,354 shares outstanding as of December 31, 2017 and 2016, respectively.Preferred Stock - Our authorized capital stock consists of 5,000,000 shares of preferred stock with a par value of $0.01 per share, with no shares outstandingas of December 31, 2017 and 2016.(Loss) Earnings Per Share - Basic (loss) earnings per share is determined by dividing net income by the weighted average number of common sharesoutstanding during the year. Diluted (loss) earnings per share presented is determined by dividing net income by the weighted average number of commonshares and potential common shares outstanding during the period as determined by the Treasury Stock Method. Potential common shares are included in thediluted earnings per share calculation when dilutive.Diluted (loss) earnings per share for years ended December 31, 2017, 2016 and 2015 includes the effects of potential common shares when dilutive and is asfollows: 2017 2016 2015Net (loss) income attributable to common stockholders$(1,705) $6,785 $7,060Weighted average number of common shares outstanding29,942 29,530 29,209Dilutive effect of restricted stock grants after application of the treasury stock method— 348 190 Dilutive shares outstanding29,942 29,878 29,399Basic and dilutive (loss) earnings per share attributable to common stockholders$(0.06) $0.23 $0.24For the years ended December 31, 2017 and 2016, diluted (loss) earnings per share excludes 787 thousand shares and 350 thousand shares, respectively, ofnonvested restricted stock as the effect would have been anti-dilutive.64Table of ContentsDividends — We have not declared or paid any cash dividends in the past. The terms of the Third ARLS Agreement restricts the payment or distribution ofour cash or other assets, including cash dividend payments.12.Performance AwardsAwards, defined as cash, shares or other awards, may be granted to employees under the Amended and Restated Commercial Vehicle Group, Inc. 2014 EquityIncentive Plan (the “2014 EIP”). The cash award is earned and payable based upon the Company’s relative Total Shareholder Return in terms of ranking ascompared to the Peer Group over a three-year period (the “Performance Period”). Total Shareholder Return is determined by the percentage change in value(positive or negative) over the applicable measurement period as measured by dividing (A) the sum of (I) the cumulative value of dividends and otherdistributions paid on the Common Stock (or the publicly traded common stock of the applicable Peer Group company) for the applicable measurementperiod, and (II) the difference (positive or negative) between each such company’s starting stock price and ending stock price, by (B) the starting stock price.The award is paid out at the end of the Performance Period in cash if the employee is employed through the end of the Performance Period. If the employee isnot employed as of the payment date, the award is forfeited. These grants were accounted for as cash settlement awards for which the fair value of the awardfluctuates based on the change in Total Shareholder Return in relation to the Peer Group. Performance awards were granted under the 2014 EIP in November2017, 2016, and 2015. Expense associated with the performance awards is reported in selling, general and administrative expenses in the ConsolidatedStatements of Operations. The unrecognized expense is $2.0 million as of December 31, 2017. The following table summarizes the grant activity for the yearsDecember 31, 2017, 2016 and 2015:Grant Date Grant Amount Adjustments Forfeitures Payments Adjusted AwardValue at December31, 2017 Vesting Schedule RemainingPeriods (inMonths) toVestingNovember 2014 $2,087 (495) $(1,097) $(495) $— November 2017 0November 2015 1,487 646 (197) $— 1,936 November 2018 10November 2016 1,434 (454) (37) — 943 November 2019 22November 2017 1,584 (755) — — 829 November 2020 34 $6,592 $(1,058) $(1,331) $(495) $3,708 13.Share-Based CompensationThe compensation expense for our share-based compensation arrangements (see Restricted Stock Awards below) was $2.5 million, $2.6 million and $2.9million for the years ended December 31, 2017, 2016 and 2015, respectively. Share-based compensation expense is included in selling, general andadministrative expenses in the Consolidated Statements of Operations.Restricted Stock Awards - Restricted stock is a grant of shares of common stock that may not be sold, encumbered or disposed of and that may be forfeited inthe event of certain terminations of employment or separation from the board of directors prior to the end of a restricted period set by the compensationcommittee of the board of directors. A participant granted restricted stock generally has all of the rights of a stockholder, unless the compensation committeedetermines otherwise. The following table summarizes information about unvested restricted stock grants (in thousands, except for share data):Grant Shares Vesting Schedule UnearnedCompensation RemainingPeriod (inmonths)October 2015 595,509 3 equal annual installments commencing on October 20, 2016 $451.7 10January/March 2016 62,610 3 equal annual installments commencing on October 20, 2016 $22.5 10October 2016 410,751 3 equal annual installments commencing on October 20, 2017 $1,250.6 22July 2017 5,701 3 equal annual installments commencing on July 13, 2017 $28.5 22October 2017 302,574 3 equal annual installments commencing on October 20, 2018 $2,797.6 34October 2017 45,965 Shares vesting as of October 20, 2018 $375.0 10As of December 31, 2017, there was approximately $4.9 million of unrecognized compensation expense related to non-vested share-based compensationarrangements granted under our equity incentive plans. This expense is subject to future adjustments and forfeitures and will be recognized on a straight-linebasis over the remaining period listed above for each grant.A summary of the status of our restricted stock awards as of December 31, 2017 and changes during the twelve-month period ending December 31, 2017,2016 and 2015 is presented below:65Table of Contents 2017 2016 2015 Shares(000’s) Weighted-AverageGrant-DateFair Value Shares(000’s) Weighted-AverageGrant-DateFair Value Shares(000’s) Weighted-AverageGrant-DateFair ValueNonvested - beginning of year981 $4.70 1,128 $4.24 915 $6.96Granted354 $9.77 571 $5.05 818 $3.24Vested(509) $4.90 (558) $4.68 (400) $7.06Forfeited(39) $4.84 (160) $4.35 (205) $6.93Nonvested - end of year787 $6.84 981 $4.70 1,128 $4.24As of December 31, 2017, a total of 2.6 million shares were available for future grants from the shares authorized for award under our 2014 Equity IncentivePlan, including cumulative forfeitures.Repurchase of Common Stock - We did not repurchase any of our common stock on the open market as part of a stock repurchase program during 2017;however, our employees surrendered 161 thousand shares of our common stock to satisfy tax withholding obligations on the vesting of the restricted stockawards.14.Defined Contribution Plans, Pension and Other Post-Retirement Benefit PlansDefined Contribution Plans - We sponsor various defined contribution plans covering all eligible employees. Eligible employees can contribute on a pre-taxbasis to the plan. In accordance with the terms of the 401(k) plans, we elect to match a certain percentage of the participants’ contributions to the plans, asdefined. We recognized expense associated with these plans of $3.0 million in 2017, $2.7 million in 2016 and $2.8 million in 2015.Pension and Other Post-Retirement Benefit Plans - We sponsor pension and other post-retirement benefit plans that cover certain hourly and salariedemployees in the U.S. and United Kingdom. Each of the plans are frozen to new participants. All of the plans, except for the Shadyside facility pension plan,are frozen to additional service credits earned. Our policy is to make annual contributions to the plans to fund the minimum contributions as required bylocal regulations.The change in benefit obligation, plan assets and funded status as of December 31 consisted of the following: U.S. Pension and Other Post-RetirementBenefit Plans Non-U.S. Pension Plans 2017 2016 2017 2016Change in benefit obligation: Benefit obligation — Beginning of the year$47,512 $47,795 $40,820 $39,186Service cost116 126 — —Interest cost1,810 1,878 1,138 1,370Participant contributions8 7 — —Benefits paid(2,188) (2,161) (1,309) (1,454)Actuarial loss (gain)2,814 (133) 1,099 9,234Exchange rate changes— — 3,989 (7,516)Benefit obligation at end of the year50,072 47,512 45,737 40,820Change in plan assets: Fair value of plan assets — Beginning of the year38,390 36,270 31,080 33,608Actual return on plan assets6,584 2,035 1,798 4,214Employer contributions2,252 2,239 747 756Participant contributions8 7 — —Benefits paid(2,188) (2,161) (1,309) (1,454)Exchange rate changes— — 3,061 (6,044)Fair value of plan assets at end of the year45,046 38,390 35,377 31,080Funded status$(5,026) $(9,122) $(10,360) $(9,740)Amounts recognized in the Consolidated Balance Sheets at December 31 consisted of:66Table of Contents U.S. Pension and Other Post-Retirement BenefitPlans Non-U.S. Pension Plans 2017 2016 2017 2016Current liabilities$52 $64 $— $—Noncurrent liabilities4,974 9,058 10,360 9,740Amount recognized$5,026 $9,122 $10,360 $9,740The components of net periodic (benefit) cost for the years ended December 31 were as follows: U.S. Pension and Other Post-Retirement Benefit Plans Non-U.S. Pension Plans 2017 2016 2015 2017 2016 2015Service cost$116 $126 $135 $— $— $—Interest cost1,810 1,878 1,864 1,138 1,370 1,470Expected return on plan assets(2,684) (2,719) (2,673) (1,196) (1,520) (1,597)Amortization of prior service cost6 6 6 — — —Recognized actuarial loss (gain)21 308 336 312 210 275Net periodic (benefit) cost$(731) $(401) $(332) $254 $60 $148Amounts Recognized in Accumulated Other Comprehensive Income (Loss) - Amounts recognized in accumulated other comprehensive income (loss), beforetaking into account income tax effects, at December 31 are as follows: U.S. Pension and Other Post-Retirement Benefit Plans Non-U.S. Pension Plans 2017 2016 2015 2017 2016 2015Net actuarial loss$13,765 $15,219 $14,974 $13,454 $14,134 $8,784Prior service cost57 63 69 — — — $13,822 $15,282 $15,043 $13,454 $14,134 $8,784Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income — Amounts recognized as other changes in planassets and benefit obligations in other comprehensive income (loss), before taking into account income tax effects, for the year ended December 31 are asfollows: U.S. Pension and Other Post-Retirement Plans Non-U.S. Pension Plans 2017 2016 2017 2016Actuarial loss (gain)$(1,087) $551 $519 $6,001Amortization of actuarial (gain) loss(367) (308) (504) (193)Prior Service credit(6) (6) — —Total recognized in other comprehensive income (loss)$(1,460) $237 $15 $5,808The estimated actuarial loss amortized into net periodic benefit cost over the next fiscal year is $0.3 million.Weighted-average assumptions used to determine benefit obligations at December 31 were as follows: U.S. Pension and Other Post-RetirementBenefit Plans Non-U.S. PensionPlans 2017 2016 2017 2016Discount rate3.42% 3.87% 2.45% 2.70%Weighted-average assumptions used to determine net periodic benefit cost at December 31 were as follows: U.S. Pension and Other Post-Retirement Plans Non-U.S. Pension Plans 2017 2016 2015 2017 2016 2015Discount rate3.87% 4.05% 3.73% 2.70% 3.90% 3.50%Expected return on plan assets7.00% 7.50% 7.50% 3.70% 5.00% 4.60%67Table of ContentsThe rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by thetarget asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of returnassumption. Our pension plan investment strategy is reviewed annually.We employ a total return investment approach whereby a mix of equities, fixed income and real estate investments are used to maximize the long-term returnof plan assets taking into consideration a prudent level of risk. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities overthe long run. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. Theinvestment portfolio contains a diversified blend of equity, balanced, fixed income and real estate investments. Furthermore, equity investments arediversified across U.S. and non-U.S. stocks, as well as growth, value and large capitalizations. Other assets such as real estate are used judiciously to enhancelong-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however,derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored onan ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. We expect to contributeapproximately $3.0 million to our pension plans and our other post-retirement benefit plans in 2018.Our current investment allocation target for our pension plans for 2017 and our weighted-average asset allocations of our pension assets for the years endedDecember 31, by asset category, are as follows: Target Allocation Actual Allocations as of December 31, 2017 2016 U.S. Pension Plans Non-U.S. Pension Plans U.S. Non-U.S. U.S. Non-U.S. 2017 2016 2017 2016Cash and cash equivalents— — — — — — — —Equity/Balanced securities55 55 55 55 57 52 58 55Fixed income securities25 45 25 45 20 23 42 45Real estate20 — 20 — 23 25 — — 100% 100% 100% 100% 100% 100% 100% 100% The following descriptions relate to our plan assets:Equity Securities - Includes common stocks issued by U.S., United Kingdom and other international companies, equity funds that invest in common stocksand unit linked insurance policies. Equity investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issuesthat are actively traded to facilitate transactions at minimum cost.Balanced Securities - Includes funds primarily invested in a mix of equity and fixed income securities where the allocations are at the discretion of theinvestment manager. Investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively tradedto facilitate transactions at minimum cost.Fixed Income Securities - Includes U.S. dollar-denominated and United Kingdom and other international marketable bonds and convertible debt securities aswell as fixed income funds that invest in these instruments. Investments generally allow near-term liquidity and are held in issues that are actively traded tofacilitate transactions at minimum cost.The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts isnot published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges.Real Estate - Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estateinvestments is valued by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis.Assumptions used to revalue the properties are updated every quarter.The fair values of our pension plan assets by asset category and by level as described in Note 2 for the years ended December 31, 2017 and 2016 are asfollows:68Table of Contents December 31, 2017 Quoted Prices inActive Markets forIdentical Assets SignificantObservable Inputs SignificantUnobservable Inputs Total Level 1 Level 2 Level 3Cash and cash equivalents$264 $264 $— $—Equities: U.S. large value5,499 5,499 — —U.S. large growth5,792 5,792 — —International blend10,734 — 10,734 —Emerging markets3,613 3,613 — —Balanced21,895 — 21,895 —Fixed income securities: Government bonds9,806 — 9,806 —Corporate bonds12,667 — 12,667 —Real Estate: U.S. property10,153 — — 10,153Total pension fund assets$80,423 $15,168 $55,102 $10,153 December 31, 2016 Quoted Prices inActive Markets forIdentical Assets SignificantObservable Inputs SignificantUnobservable Inputs Total Level 1 Level 2 Level 3Cash and cash equivalents$174 $174 $— $—Equities: U.S. large value4,800 4,800 — —U.S. large growth4,805 4,805 — —International blend7,954 — 7,954 —Emerging markets2,464 2,464 — —Balanced18,486 — 18,486 —Fixed income securities: Government bonds8,402 — 8,402 —Corporate bonds12,976 — 12,976 —Real Estate: U.S. property9,409 — — 9,409Total pension fund assets$69,470 $12,243 $47,818 $9,409The fair value of our pension plan assets measured using significant unobservable inputs (Level 3) at December 31 are as follows: 2017 2016Beginning balance$9,409 $8,645Actual return on assets held at reporting date744 764Ending balance$10,153 $9,409The following table summarizes our expected future benefit payments of our pension and other post-retirement benefit plans:69Table of ContentsYear Ending December 31,Pension Plans2018$4,0652019$4,2752020$4,4612021$4,4992022$4,4672023 to 2026$23,54715.Accumulated Other Comprehensive LossThe activity for each item of accumulated other comprehensive loss is as follows: Foreigncurrency items Pension andpostretirementbenefits plans Accumulated othercomprehensivelossBeginning balance, January 1, 2016$(21,079) $(18,575) $(39,654)Net current period change(3,234) (6,347) (9,581)Reclassification adjustments for losses reclassified into income— 390 390Ending balance, December 31, 2016$(24,313) $(24,532) $(48,845)Net current period change7,141 814 7,955Reclassification adjustments for losses reclassified into income— (345) (345)Ending balance, December 31, 2017$(17,172) $(24,063) $(41,235)The related tax effects allocated to each component of other comprehensive income (loss) for the years ended December 31, 2017 and 2016 are as follows:2017Before TaxAmount Tax (Expense)Benefit After Tax AmountRetirement benefits adjustment: Net actuarial gain and prior service credit$1,072 $(258) $814Reclassification of actuarial loss and prior service cost to net income(257) (88) (345)Net unrealized gain815 (346) 469Cumulative translation adjustment7,141 — 7,141Total other comprehensive income$7,956 $(346) $7,610 2016Before TaxAmount Tax (Expense)Benefit After Tax AmountRetirement benefits adjustment: Net actuarial gain and prior service credit$(6,553) $206 $(6,347)Reclassification of actuarial loss and prior service cost to net income507 (117) 390Net unrealized loss(6,046) 89 (5,957)Cumulative translation adjustment(3,235) 1 (3,234)Total other comprehensive loss$(9,281) $90 $(9,191)16.Quarterly Financial Data (Unaudited)The following is a condensed summary of quarterly results of operations for 2017 and 2016:70Table of Contents Revenues Gross Profit OperatingIncome Net Income (Loss) Basic and DilutedEarnings (Loss)Per Share2017: First$173,416 $21,503 $4,557 $628 $0.02Second$195,127 $22,701 $7,568 $131 $0.00Third$198,349 $25,150 $10,682 $4,763 $0.16Fourth$188,339 $23,211 $8,638 $(7,227) $(0.24)2016: First$180,291 $25,704 $8,580 $2,563 $0.09Second$178,251 $24,331 $8,427 $2,720 $0.09Third$153,604 $18,919 $4,466 $1,147 $0.04Fourth$149,966 $18,276 $3,910 $355 $0.01(1) See Note 11 for discussion on the computation of diluted shares outstanding.71Table of Contents17.RestructuringRestructuring ActivityOn November 19, 2015, the Board of Directors of the Company approved adjustments to the Company’s manufacturing footprint and manufacturing capacityutilization, and reductions to selling, general and administrative costs. We expected the costs associated with restructuring activities to total $11 million to$16 million, and capital investments to total $1.0 million to $2.0 million. The restructuring and cost reduction actions began in the fourth quarter of 2015and were completed in the fourth quarter of 2017. Restructuring costs incurred during the years ended December 31, 2017, 2016 and 2015 were $1.6million and $3.5 million, and $0.8 million, respectively. Following is a summary of our key actions:Edgewood FacilityThe closure of our Edgewood, Iowa facility and transfer of production to our Agua Prieta, Mexico facility was announced on December 3, 2015 and wascompleted in 2016.Piedmont FacilityOn May 2, 2016, the Company announced plans to consolidate its North American seat production into two North American facilities and cease seatproduction in the Piedmont, Alabama facility. The Company continues to maintain a presence in Piedmont for our aftermarket distribution channel. Thisrestructuring activity was completed in 2017.Monona FacilityOn July 19, 2016, the Company announced plans to transfer all wire harness production from its manufacturing facility in Monona, Iowa to its facility inAgua Prieta, Mexico. On May 24, 2017, the Company elected to maintain production capability in the Monona facility as a result of a shortage of labor inour North American wire harness business. Shadyside FacilityOn July 21, 2016, the Company announced plans to close its Shadyside, Ohio facility that performs assembly and stamping activities. These activities weretransferred to alternative facilities or sourced to local suppliers. This restructuring activity was substantially completed in 2017.Restructuring ExpendituresThe table below summarizes the expenditures incurred to date and future expenditures associated with the restructuring activities approved on November 19,2015 (in millions):72Table of Contents (in millions) 2015 Expense 2016 Expense 2017 (Income)Expense /Adjustment Total Expense Statement of Operations ClassificationEdgewood Facility Separation costs $0.1 $0.2 $— $0.3 Cost of revenuesFacility and other costs — 0.1 — 0.1 Cost of revenuesTotal $0.1 $0.3 $— $0.4 Piedmont Facility Separation costs $0.1 $0.5 $(0.2) $0.4 Cost of revenuesFacility and other costs — 0.4 — 0.4 Cost of revenuesTotal $0.1 $0.9 $(0.2) $0.8 Monona Facility Separation costs $0.2 $0.3 $(0.2) $0.3 Cost of revenuesFacility and other costs — 0.1 1.3 1.4 Cost of revenuesTotal $0.2 $0.4 $1.1 $1.7 Shadyside Facility Separation costs $0.2 $1.5 $0.5 $2.2 Cost of revenuesFacility and other costs — 0.2 0.2 0.4 Cost of revenuesTotal $0.2 $1.7 $0.7 $2.6 Other Restructuring Separation costs $— $0.1 $— $0.1 Cost of revenuesSeparation costs 0.2 0.1 — 0.3 Selling, general and administrativeTotal $0.2 $0.2 $— $0.4 Total Restructuring $0.8 $3.5 $1.6 $5.9 A summary of the restructuring liability for the years ended December 31 is as follows: 2017 Employee Costs Facility Exit and OtherContractual Costs TotalBalance - Beginning of the year$2,229 $45 $2,274Provisions196 1,402 1,598Utilizations(2,382) (1,447) (3,829)Balance - End of the year$43 $— $43 2016 Employee Costs Facility Exit and OtherContractual Costs TotalBalance - Beginning of the year$542 $43 $585Provisions2,668 839 3,507Utilizations(981) (837) (1,818)Balance - End of the year$2,229 $45 $2,274Item 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureThere were no disagreements with our independent accountants on matters of accounting and financial disclosures or reportable events.Item 9A.Controls and Procedures73Table of ContentsWe maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our ExchangeAct reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information isaccumulated and communicated to our management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate, toallow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls andprocedures, which, by their nature, can provide only reasonable assurance regarding management’s disclosure control objectives.Evaluation of Disclosure Controls and ProceduresWe evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls andprocedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of December 31, 2017. Based on thisevaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as ofDecember 31, 2017 to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated tomanagement as appropriate to allow timely decisions regarding required disclosure.Management’s Report on Internal Control Over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under theExchange Act. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal controlover financial reporting may not prevent or detect misstatements. Also, controls deemed effective now may become inadequate in the future because ofchanges in conditions, or because compliance with the policies or procedures has deteriorated or been circumvented. Management assessed the effectivenessof our internal control over financial reporting as of December 31, 2017. In making this assessment, management used the criteria established in the InternalControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”).Based on management’s assessment and the COSO criteria, management believes that our internal control over financial reporting was effective as ofDecember 31, 2017.Our independent registered public accounting firm, KPMG LLP, has issued a report on our internal control over financial reporting. KPMG LLP’s reportappears following Item 9A and expresses an unqualified opinion on the effectiveness of our internal control over financial reporting.Changes in Internal Control Over Financial ReportingThere were no changes in our internal control over financial reporting during the year ended December 31, 2017 that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting.74Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of DirectorsCommercial Vehicle Group, Inc.:Opinion on Internal Control Over Financial ReportingWe have audited Commercial Vehicle Group, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2017, basedon criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteriaestablished in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidatedbalance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss),stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statementschedule II: Valuation of Qualifying Accounts (collectively, the consolidated financial statements), and our report dated March 12, 2018 expressed anunqualified opinion on those consolidated financial statements.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financialreporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ KPMG LLPColumbus, OhioMarch 12, 201875Table of ContentsItem 9B.Other InformationNone.PART IIIItem 10.Directors, Executive Officers and Corporate GovernanceA.Directors of the RegistrantThe following table sets forth certain information with respect to our current directors as of March 12, 2018: Name Age Principal Position(s)Richard A. Snell 75 Chairman and DirectorPatrick E. Miller 50 President, Chief Executive Officer and DirectorScott C. Arves 60 DirectorHarold Bevis 58 DirectorWayne Rancourt 55 DirectorRoger Fix 63 DirectorRobert C. Griffin 70 DirectorThe following biographies describe the business experience of our directors:Scott C. Arves has served as a Director since July 2005. From January 2007 to June 2015, Mr. Arves served as President and Chief Executive Officer ofTransport America, a truckload, intermodal and logistics provider. Prior to joining Transport America, Mr. Arves was President of Transportation forSchneider National, Inc., a provider of transportation, logistics and related services, from May 2000 to July 2006. Mr. Arves brings over 30 years oftransportation experience to his role as Director, including 19 years of P&L experience and 16 years as a Division President or Chief Executive Officer. Mr.Arves also serves on the board of TFI International, a North American leader in the transportation and logistics industry.Harold Bevis has served as a Director since June 2014. He has 25 years of business leadership experience, including 15 years as a CEO. He was a businessleader at both GE and Emerson Electric. He has led or directed 8 businesses in 6 industries, 148 plants in 22 countries, 12 new business/new plant startups, 11acquisitions, and 24 business/plant expansions. Mr. Bevis is currently President of OmniMax International, a portfolio of building products businesses, sinceOctober 2017. Mr. Bevis earned a BS degree in industrial engineering from Iowa State University and an MBA degree from Columbia Business School. He isa member of the National Association of Corporate Directors and has served on 5 Boards of Directors.Roger L. Fix has served as a Director since June 2014. He served as a member of the board of directors of Standex International Corporation from 2001 until2017, when he retired from the Standex board. He served as Non-Executive Chairman from 2014 - 2016, and President and Chief Executive Officer ofStandex from 2003 to 2014. He was Standex’s President and Chief Operating Officer from 2001 to 2003. Prior to joining Standex, Mr. Fix held a number ofgeneral management positions at Emerson Electric, the TI Group, plc and TRW over a period of more than 20 years. Mr. Fix has served as a Director ofFlowserve Corporation since 2006 and as Chairman of the Corporate Nominating and Governance Committee and a member of the Audit Committee. Mr. Fixcurrently serves as the Chairman of the Board of Flowserve Corporation. Mr. Fix earned a master’s degree in mechanical engineering from the University ofTexas and a bachelor-of-science degree in mechanical engineering from the University of Nebraska.Robert C. Griffin has served as a Director since July 2005. His career spanned over 25 years in the financial sector, including Head of Investment BankingAmericas and Management Committee Member for Barclay’s Capital from 2000 to 2002. Prior to that, Mr. Griffin served as the Global Head of FinancialSponsor Coverage for Bank of America Securities and a member of its Montgomery Securities Subsidiary Management Committee from 1998 to 2000 and asGroup Executive Vice President of Bank of America and a member of its Senior Management Committee from 1997 to 1998. Mr. Griffin served as a Directorof GSE Holdings, Inc., from December 2011 to August 2014 where he was Chairman of the Board and a member of the Compensation Committee and theNominating and Corporate Governance Committee. Mr. Griffin served as a Director of The J.G. Wentworth Company where he was Chairman of the AuditCommittee from October 2013 to January 2018. Mr. Griffin serves as a Director of Builders FirstSource, Inc., where he is Chairman of the Audit Committee, amember of the Compensation Committee and the Nominating Committee and was Chairman of their Special Committee in 2009 and 2015. Mr. Griffin bringsstrong financial and management expertise to our Board through his experience as an officer and director of a public company, service on other boards andhis senior leadership tenure within the financial industry.76Table of ContentsPatrick E. Miller has served as President and Chief Executive Officer and a Director since November 2015. Mr. Miller, who most recently was President of theCompany’s Global Truck & Bus Segment, has been with the Company since 2005. During this time, he served in the capacity of Senior Vice President &General Manager of Aftermarket; Senior Vice President of Global Purchasing; Vice President of Global Sales; Vice President & General Manager of NorthAmerican Truck and Vice President & General Manager of Structures. Prior to joining the Company, Mr. Miller held engineering, sales, and operationalleadership positions with Hayes Lemmerz International, Alcoa, Inc. and ArvinMeritor. He holds a Bachelor of Science in Industrial Engineering from PurdueUniversity and a Masters of Business Administration from the Harvard University Graduate School of Business.Wayne Rancourt has served as a Director since July 2016. Mr. Rancourt has served as Executive Vice President, Chief Financial Officer & Treasurer of BoiseCascade Company since August 2009, a $4.4 billion in revenues North American based manufacturing and distribution company. Mr. Rancourt has over 30years of experience in various finance roles including chief financial officer, treasurer, investor relations, strategic planning, as well as internal audit. Mr.Rancourt received a bachelor of science degree in Accounting from Central Washington University. Mr. Rancourt brings strong financial expertise to theBoard through his experience in various finance roles.Richard A. Snell has served as a Director since August 2004 and as Chairman since March 2010. He served as Chairman and Chief Executive Officer ofQualitor, Inc. from May 2005 until April 2015 and as an Operating Partner at HCI Partners from 2003 to December 2015. Mr. Snell served as Chairman andChief Executive Officer of Federal-Mogul Corporation, an automotive parts manufacturer, where he served from 1996 to 2000, and as Chief Executive Officerat Tenneco Automotive, also an automotive parts manufacturer, where he was employed from 1987 to 1996. Mr. Snell served as a Director of SchneiderNational, Inc., a multi-national trucking company, and as a member of their Compensation and Governance Committees from 1996 to 2011.B.Executive OfficersInformation regarding our executive officers is set forth in Item 1 of Part I of this Annual Report on Form 10-K under the heading “Executive Officers of theRegistrant.”There are no family relationships between any of our directors or executive officers.C.Section 16(a) Beneficial Ownership Reporting Compliance and Corporate GovernanceThe information required by Item 10 with respect to compliance with reporting requirements is incorporated herein by reference to the sections labeled“Section 16(a) Beneficial Ownership Reporting Compliance” and “Proposal No. 1 - Election of Directors - Corporate Governance,” which appear in CVG’s2018 Proxy Statement.Item 11.Executive CompensationThe information required by Item 11 is incorporated herein by reference to the sections labeled “Executive Compensation - 2017 Director CompensationTable” and “Executive Compensation” and “Proposal No. 1 - Election of Directors - Corporate Governance,” which appear in CVG’s 2018 Proxy Statement,including information under the heading “Compensation Discussion and Analysis.”Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersOptions to purchase common shares of our common stock were granted to certain of our executives and key employees under our 2014 Equity Incentive Plan.There are no outstanding options, warrants or rights associated with the Company's Equity Incentive Plans. The following table summarizes the number ofsecurities remaining to be issued under the outstanding equity compensation plan as of December 31, 2017: Number of Securities to beIssued upon Exercise ofOutstanding Options,Warrants and Rights Weighted-averageExercise Price ofOutstandingOptions, Warrantsand Rights Number ofSecuritiesRemaining Availablefor Future IssuanceUnder EquityCompensation Plans2014 Equity Incentive Plan approved by security holders— $— 2,553,463The information required by Item 12 is incorporated herein by reference to the section labeled “Security Ownership of Certain Beneficial Owners andManagement,” which appears in CVG’s 2018 Proxy Statement.Item 13Certain Relationships, Related Transactions and Director IndependenceThe information required by Item 13 is incorporated herein by reference to the sections labeled “Certain Relationships and Related Transactions” and“Proposal No. 1 - Election of Directors - Corporate Governance,” which appear in CVG’s 2018 Proxy Statement.77Table of ContentsItem 14.Principal Accountant Fees and ServicesThe information required by Item 14 is incorporated herein by reference to the section labeled “Proposal No. 3 - Ratification of Appointment of theIndependent Registered Public Accounting Firm,” which appears in CVG’s 2018 Proxy Statement. 78Table of ContentsPART IVItem 15.Exhibits, Financial Statements Schedules(1)LIST OF FINANCIAL STATEMENT SCHEDULESThe following financial statement schedule of the Corporation and its subsidiaries is included herein:Schedule II - Valuation and Qualifying Accounts and Reserves.COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIESSCHEDULE II: VALUATION AND QUALIFYING ACCOUNTSDecember 31, 2017, 2016 and 2015Accounts Receivable Allowances:Activity for the years ended December 31 is as follows (in thousands): 2017 2016 2015Balance - Beginning of the year$3,881 $4,539 $2,808Provisions5,488 5,547 4,640Utilizations(4,264) (6,063) (2,828)Currency translation adjustment137 (142) (81)Balance - End of the year$5,242 $3,881 $4,539Income Tax Valuation Allowance:Activity for the years ended December 31 is as follows (in thousands): 2017 2016 2015Balance - Beginning of the year12,546 $14,404 $11,770Provisions2,506 2,917 3,436Utilizations(31) (4,775) (802)Balance - End of the year15,021 $12,546 $14,404All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or areinapplicable and, therefore, have been omitted.(2)LIST OF EXHIBITSThe following exhibits are either included in this report or incorporated herein by reference as indicated below:79Table of ContentsEXHIBIT INDEXExhibit No. Description 2.1** Asset Purchase Agreement, dated as of January 28, 2011, by and among CVG Alabama LLC and Bostrom Seating, Inc., (incorporated byreference to the Company’s annual report on Form 10-K (File No. 000-34365), filed on March 15, 2011). 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s quarterly report onForm 10-Q (File No. 000-50890), filed on September 17, 2004). 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated as of May 12, 2011(incorporated by reference to the Company’s current report on Form 8-K (File No. 001-34365), filed on May 13, 2011). 3.3 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated as of May 15, 2015(incorporated by reference to the Company’s current report on Form 8-K (File No. 001-34365), filed on May 15, 2015). 3.4 Amended and Restated By-laws of the Company (incorporated by reference to the Company’s quarterly report on Form 10-Q (File No.000-50890), filed on September 17, 2004). 3.5 Certificate of Designations of Series A Preferred Stock (included as Exhibit A to the Rights Agreement incorporated by reference toExhibit 4.8) (incorporated by reference to the Company’s current report on Form 8-K (File No. 000-50890), filed on May 22, 2009. 4.1 Registration Rights Agreement, dated July 6, 2005, among the Company, the subsidiary guarantors party thereto and the purchasersnamed therein (incorporated herein by reference to the Company’s current report on Form 8-K (File No. 000-50890), filed on July 8,2005). 4.2Commercial Vehicle Group, Inc. Rights Agreement, dated as of May 21, 2009, by and between the Company and Computershare TrustCompany, N.A. (incorporated by reference to the Company’s current report on Form 8-K (File No. 000-50890), filed on May 22, 2009). 4.3 Form of Rights Certificate (included as Exhibit B to the Rights Agreement) (incorporated by reference to the Company’s current report onForm 8-K (File No. 000-50890), filed on May 22, 2009). 4.4 Form of Summary of Rights to Purchase (included as Exhibit C to the Rights Agreement) (incorporated by reference to the Company’scurrent report on Form 8-K (File No. 000-50890), filed on May 22, 2009). 4.5 Commercial Vehicle Group, Inc. Amendment No. 1 to Rights Agreement, dated as of March 9, 2011, by and between the Company andComputershare Trust Company, N.A. (incorporated by reference to the Company’s current report on Form 8-K (File No. 001-34365), filedon March 9, 2011). 4.6 Form of Certificate of Common Stock of the Company (incorporated by reference to the Company’s registration statement on Form S-1/A(File No. 333-115708), filed August 3, 2004). 4.7 Amended and Restated Loan and Security Agreement, dated as of April 26, 2011, by and among the Company, certain of the Company’ssubsidiaries, as borrowers, and Bank of America, N.A. as agent and lender (incorporated by reference to the Company’s current report onForm 8-K (File No. 001-34365), filed on April 28, 2011. 4.8 Second Amended and Restated Loan and Security Agreement, dated as of November 15, 2013, by and among the Company, certain of theCompany’s subsidiaries, as borrowers, and Bank of America, N.A. as agent and lender, (incorporated by reference to the Company’scurrent report on Form 8-K (File No. 001-34365), filed on November 21, 2013). 4.9 Third Amended and Restated Loan and Security Agreement, dated as of April 12, 2017, by and among the Company, certain of theCompany’s subsidiaries, as borrowers, and Bank of America, N.A. as agent and other lender parties thereto (incorporated by reference tothe Company’s current report on Form 8-K (File No. 001-34365), filed on April 13, 2017). 4.10 Term Loan Agreement, dated as of April 12, 2017, by and among the Company, Bank of America, N.A., as administrative agent, and otherlender parties thereto (incorporated by reference to the Company’s current report on Form 8-K (File No. 001-34365), filed on April 13,2017).80Table of ContentsExhibit No. Description 10.1* Commercial Vehicle Group, Inc. Fourth Amended and Restated Equity Incentive Plan (incorporated by reference to the Company’scurrent report on Form 8-K (File No. 001-34365), filed on May 13, 2011). 10.2* Commercial Vehicle Group, Inc. 2014 Equity Incentive Plan (incorporated by reference from the Company proxy statement on FormSchedule 14A (File No. 001-34365), filed on April 11, 2014). 10.3* Amended and Restated Commercial Vehicle Group, Inc. 2014 Equity Incentive Plan (incorporated by reference from the Company currentreport on Form 8-K (File No. 001-34365), filed on May 17, 2017). 10.4* Commercial Vehicle Group, Inc. 2017 Annual Incentive Plan (incorporated by reference from the Company current report on Form 10-Q(File No. 001-34365), filed on May 5, 2017). 10.5 Registration Agreement, dated October 5, 2000, by and among Bostrom Holding, Inc. and the investors listed on Schedule A attachedthereto (incorporated by reference to the Company’s registration statement on Form S-1 (File No. 333-115708), filed on May 21, 2004). 10.6 Joinder to the Registration Agreement, dated as of May 20, 2004, by and among Commercial Vehicle Group, Inc. and the priorstockholders of Trim Systems (incorporated by reference to the Company’s quarterly report on Form 10-Q (File No. 000-50890), filed onSeptember 17, 2004). 10.7 Assignment and Assumption Agreement, dated as of June 1, 2004, between Mayflower Vehicle Systems PLC and Mayflower VehicleSystems, Inc. (incorporated by reference to the Company’s registration statement on Form S-1 (File No. 333-125626), filed on June 8,2005). 10.8* Form of Cash Performance Award pursuant to the Commercial Vehicle Group, Inc. Fourth Amended and Restated Equity Incentive Plan(incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-34365), filed on March 11, 2013). 10.9* Form of Restricted Stock Agreement pursuant to the Commercial Vehicle Group, Inc. 2014 Equity Incentive Plan (incorporated byreference from the Company quarterly report on Form 10-Q (File No. 001-34365), filed on November 7, 2014). 10.10* Offer letter, dated September 27, 2013, to C. Timothy Trenary (incorporated by reference to the Company’s current report on Form 8-K(File No. 001-34365), filed on September 30, 2013). 10.11* Change in Control & Non-Competition Agreement dated January 23, 2014 with C. Timothy Trenary (incorporated by reference to theCompany’s current report on Form 8-K (File No. 001-34365), filed on January 24, 2014). 10.12* Amended and Restated Deferred Compensation Plan dated November 5, 2008 (incorporated by reference to the Company’s annual reporton Form 10-K (File No. 000-50890), filed on March 16, 2009). 10.13* Form of indemnification agreement with directors and executive officers (incorporated by reference to the Company’s annual report onForm 10-K (File No. 000-50890), filed on March 14, 2008). 10.14* Change in Control & Non-Competition Agreement dated October 24, 2014 with Patrick Miller (incorporated by reference to theCompany’s current report on Form 8-K (File No. 001-34365), filed on October 28, 2014). 10.15* Employment Agreement, dated as of March 22, 2016, between the Company and Patrick E. Miller (incorporated by reference to thecompany’s current report on form 8-K (File No. 001-34365), filed on March 24, 2016). 10.16* Change in Control & Non-Competition Agreement dated October 24, 2014 with Stacie Fleming (incorporated by reference to theCompany’s current report on Form 8-K (File No. 001-34365), filed on October 28, 2014). 10.17* Change in Control & Non-Competition Agreement dated February 1, 2016 with Greg Boese. 10.18* Change in Control & Non-Competition Agreement dated February 1, 2016 with Dale McKillop. 10.19* Retention Bonus Agreement between the Company and Mr. Trenary effective March 22, 2016 (incorporated by reference to theCompany’s quarterly report on Form 10-Q (File No. 001-34365), filed on August 3, 2016). 10.20 Contract for Purchase and Sale of Real Property between Mayflower Vehicle Systems, LLC and Warren Distribution, Inc. dated July 24,2017 (incorporated by reference from the Company quarterly report on Form 10-Q (File No. 001-34365), filed on November 7, 2017). 81Table of ContentsExhibit No. Description12.1 Computation of ratio of earnings to fixed charges. 21.1 Subsidiaries of Commercial Vehicle Group, Inc. 23.1 Consent of KPMG LLP. 31.1 302 Certification by Patrick E. Miller, President and Chief Executive Officer. 31.2 302 Certification by C. Timothy Trenary, Executive Vice President and Chief Financial Officer. 32.1 906 Certification by Patrick E. Miller pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. 32.2 906 Certification by C. Timothy Trenary pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document 101.SCH XBRL Schema Document 101.CAL XBRL Calculation Linkbase Document 101.LAB XBRL Label Linkbase Document 101.PRE XBRL Presentation Linkbase Document 101.DEF XBRL Definition Linkbase Document *Management contract or compensatory plan or arrangement required to be filed as an exhibit to this annual report on Form 10-K.**The schedules and exhibits to the Asset Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S—K. TheCompany will furnish supplementally a copy of any such omitted schedules or exhibits to the SEC upon request.All other items included in an Annual Report on Form 10-K are omitted because they are not applicable or the answers thereto are none.82Table of ContentsSIGNATURESPursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized. COMMERCIAL VEHICLE GROUP, INC. By:/s/ Patrick E. Miller Patrick E. Miller President and Chief Executive OfficerDate: March 12, 2018Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and inthe capacities indicated on March 12, 2018. Signature Title /s/ Richard A. Snell Chairman and DirectorRichard A. Snell /s/ Patrick E. Miller President, Chief Executive OfficerPatrick E. Miller (Principal Executive Officer) and Director /s/ Scott C. Arves DirectorScott C. Arves /s/ Harold Bevis DirectorHarold Bevis /s/ Wayne Rancourt DirectorWayne Rancourt /s/ Roger Fix DirectorRoger Fix /s/ Robert C. Griffin DirectorRobert C. Griffin /s/ C. Timothy Trenary Chief Financial OfficerC. Timothy Trenary (Principal Financial Officer) /s/ Stacie N. Fleming Chief Accounting OfficerStacie N. Fleming (Principal Accounting Officer)83CHANGE IN CONTROLS &NON-COMPETITION AGREEMENTThis Agreement is made as of this 1st day of February, 2016, by and between Greg Boese (“Executive”) and Commercial Vehicle Group, Inc., aDelaware corporation with its principal office at 7800 Walton Parkway, New Albany, Ohio 43054, its subsidiaries, successors and assigns (the“Company”).RecitalsA.The Company is engaged in the business of developing, manufacturing, and marketing of interior systems, vision safety solutions and othercab-related related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the constructionmarket and other specialized transportation markets and in connection therewith develops and uses valuable technical and nontechnical tradesecrets and other confidential information which it desires to protect.B.You will continue to be employed as an office or key employee of the Company.C.The Company considers your continued services to be in the best interest of the Company and desires, through this Agreement, to assure yourcontinued services on behalf of the Company on an objective and impartial basis and without distraction or conflict of interest in the event ofan attempt to obtain control of the Company.D.You are willing to remain in the employ of the Company on the terms set forth in this agreement.AgreementNOW, THEREFORE, the parties agree as follows:1.Consideration. As consideration for your entering into this Agreement and your willingness to remain bound by its terms, the Companyshall continue to employ you and provide you with access to certain Confidential Information as defined in this Agreement and other valuableconsideration as provided for throughout this Agreement, including in Sections 3 and 4 of this Agreement.2.Employmenta)Position. You will continue to be employed as Senior Vice President and Managing Director, reporting to the President and ChiefExecutive Officer of the Company. You shall continue to perform the duties, undertake the responsibilities and exercise the authoritycustomarily performed, undertaken and exercised by persons employed in similar executive capacities.b)Restricted Employment. While employed by the Company, you shall devote your best efforts to the business of the Company andshall not engage in any outside employment or consulting work without first securing the approval of the Company’s Board ofDirectors. Furthermore, so long as you are employed under this Agreement, you agree to devote your full time and effortsPage 1 of 1 Change in Control & Non-competition Agreement | Boeseexclusively on behalf of the Company and to competently, diligently, and effectively discharge your duties hereunder. You shall notbe prohibited from engaging in such personal, charitable, or other non-employment activities that do not interfere with your full timeemployment hereunder and which do not violate the other provisions of this Agreement. You further agree to comply fully with allpolicies and practices of the Company as are from time to time in effect.3.Compensationa)Your compensation will be continued at your current annual base rate (“Basic Salary”), payable in accordance with the normal payrollpractices of the Company. Your base salary may be increased from time to time by action of the Board of Directors of the Company.You will also be eligible for a cash bonus under a performance bonus plan which is determined annually by the Board of Directors ofthe Company.b)You will be entitled to receive equity and other long term incentive awards (including but not limited to stock awards) pursuant to theterms of the Company’s Equity Incentive Plan or other plan adopted by the Board of Directors of the Company from time to time. Ifa “Change in Control,” as defined in Section 8(e)(v) shall occur (i) in which the Company does not survive as a result of such Changein Control, or substantially all of the assets of the Company are sold as a result of such Change in Control, and (ii) in which thesurviving entity does not assume the obligations of your outstanding stock options upon the Change in Control, then all outstandingstock options and restricted stock issued to you prior to the Change in Control will be immediately vested upon such Change ofControl and such options will be exercisable for a period of at least 12 months from the date of the Change in Control, but, in noevent, following the expiration date of the term of such stock options.c)Subject to applicable Company policies, you will be reimbursed for necessary and reasonable business expenses incurred inconnection with the performance of your duties hereunder or for prompting, pursuing or otherwise furthering the business or interestof the Company.4.Fringe Benefits. You will be entitled to receive employee benefits and participate in any employee benefit plans, in accordance with theirterms as from time to time amended, that the Company maintains during your employment and which are made generally available to allother executive management employees in like positions. This includes medical and dental insurance, life insurance, disability insurance,supplemental medical insurance and 401(k) plan including all executive benefits as approved by the Board of Directors’ CompensationCommittee.5.Confidential Informationa)As used throughout this Agreement, the term “Confidential Information” means any information you acquire during employment bythe Company (including information you conceive, discover or develop) which is not readily available to the general public andwhich relates to the business, including research and development projects, of the Company, its subsidiaries or its affiliatedcompanies.Page 2 of 2 Change in Control & Non-competition Agreement | Boeseb)Confidential Information includes, without limitation, information of a technical nature (such as trade secrets, inventions, discoveries,product requirements, designs, software codes and manufacturing methods), matters of a business nature (such as customer lists, theidentities of customer contacts, information about customer requirements and preferences, the terms of the Company’s contracts withits customers and suppliers, and the Company’s costs and prices), personnel information (such as the identities, duties, customercontacts, and skills of the Company’s employees) and other financial information relating to the Company and its customers(including credit terms, methods of conducting business, computer systems, computer software, personnel data, and strategicmarketing, sales or other business plans.) Confidential Information may or may not be patentable.c)Confidential Information does not include information which you learned prior to employment with the Company from sources otherthan the Company, information you develop after employment from sources other than the Company’s Confidential Information orinformation which is readily available to persons with equivalent skills, training and experience in the same fields or fields ofendeavor as you. You must presume that all information that is disclosed or made accessible to you during employment by theCompany is Confidential Information if you have a reasonable basis to believe the information is Confidential Information or if youhave notice that the Company treats the information as Confidential Information.d)Except in conducting the Company’s business, you shall not at any time, either during or following your employment with theCompany, make use of, or disclose to any other person or entity, any Confidential Information unless (i) the specific informationbecomes public from a source other than you or another person or entity that owes a duty of confidentiality to the Company and (ii)twelve months have passed since the specific information became public. However, you may discuss Confidential Information withemployees of the Company when necessary to perform your duties to the Company. Notwithstanding the foregoing, if you areordered by a court of competent jurisdiction to disclose Confidential Information, you will officially advise the Court that you areunder a duty of confidentiality to the Company hereunder, take reasonable steps to delay disclosure until the Company may be heardby the Court, give the Company prompt notice of such Court order, and if ordered to disclose such Confidential Information youshall seek to do so under seal or in camera or in such other manner as reasonably designed to restrict the public disclosure andmaintain the maximum confidentiality of such Confidential Information.e)Upon Employment Separation, you shall deliver to the Company all originals, copies, notes, documents, computer data bases, disks,and CDs, or records of any kind that reflect or relate to any Confidential Information. As used herein, the term “notes” means writtenor printed words, symbols, pictures, numbers or formulae. As used throughout this Agreement, the term “Employment Separation”means the separation from and/or termination of your employment with the Company, regardless of the time, manner or cause ofsuch separation or termination.6.Inventions.Page 3 of 3 Change in Control & Non-competition Agreement | Boesea)As used throughout this Agreement, the term “Inventions” means any inventions, improvements, designs, plans, discoveries orinnovations of a technical or business nature, whether patentable or not, relating in any way to the Company’s business orcontemplated business if the Invention is conceived or reduced to practice by you during your employment by the Company.Inventions include all data, records, physical embodiments and intellectual property pertaining thereto. Inventions reduced to practicewithin one year following Employment Separation shall be presumed to have been conceived during employment.b)Inventions are the Company’s exclusive property and shall be promptly disclosed and assigned to the Company without additionalcompensation of any kind. If requested by the Company, you, your heirs, your executors, your administrators or legal representativewill provide any information, documents, testimony or other assistance needed for the Company to acquire, maintain, perfect orexercise any form of legal protection that the Company desires in connection with and Invention.c)Upon Employment Separation, you shall deliver to the Company all copies of and all notes with respect to all documents or recordsof any king that relate to any Inventions.7.Non-competition and Non-solicitation.a)By entering into this Agreement, you acknowledge that the Confidential Information has been and will be developed and acquired bythe Company by means of substantial expense and effort, that the Confidential Information is a valuable asset of the Company’sbusiness, that the disclosure of the Confidential Information to any of the Company’s competitors would cause substantial andirreparable injury to the Company’s business, and that any customers of the Company developed by you or others during youremployment are developed on behalf of the Company. You further acknowledge that you have been provided with access toConfidential Information, including Confidential Information concerning the Company’s major customers, and its technical,marketing and business plans, disclosure or misuse of which would irreparably injure the Company.b)In exchange for the consideration specified in Section 1 of this Agreement — the adequacy of which you expressly acknowledge —you agree that during your employment by the Company and for a period of twelve (12) months following Employment Separation,you shall not, directly or indirectly, as an owner, shareholder, officer, employee, manager, consultant, independent contractor, orotherwise:(i)Attempt to recruit or hire, interfere with or harm, or attempt to interfere with or harm, the relationship of theCompany, its subsidiaries or affiliates, with any person who is an employee, customer or supplier of the Company, itssubsidiaries or affiliates;(ii)Contact any employee of the Company for the purpose of discussion or suggesting that such employee resign formemployment with the Company for the purpose of becoming employed elsewhere or provide information aboutindividual employees of the Company or personnel policies or procedures of the Company to any person or entity,including any individual,Page 4 of 4 Change in Control & Non-competition Agreement | Boeseagency or company engaged in the business of recruiting employees, executives or officer; or(iii)Own, manage, operate, join control, be employed by, consult with or participate in the ownership, management,operation or control of, or be connected with (as a stockholder, partner, or otherwise), any business, individual, partner,firm, corporation, or other entity that competes or plans to compete, directly or indirectly, with the Company, itsproducts, or any division, subsidiary or affiliate of the Company; provided, however, that your “beneficial ownership,”either individually or as a member of a “group” as such terms are used in Rule 13d of the General Rules andRegulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of not more than twopercent (2%) of the voting stock of any publicly held corporation, shall not be a violation of this Agreement.8.Termination of Employmenta)Termination Upon Death or Disability. Your employment will terminate automatically upon your death. The Company will beentitled to terminate your employment because of your disability upon 30 days written notice. “Disability” will mean “total disability”as defined in the Company’s long term disability plan or any successor thereto. In the event of a termination under this Section, 8 (a),the Company will pay you the earned but unpaid portion of your Basic Salary through the termination date. Additionally, you will beentitled to any Annual Bonus earned with respect to the previous calendar year, but unpaid as of the employment termination date;and a prorated amount of the Annual Bonus for the calendar year in which the termination occurs, calculated by multiplying theAnnual Bonus that the Executive would have received for such year had Executive’s employment continued through the end of suchcalendar year by a fraction, the numerator of which is the number of days the Executive was employed during the applicable year andthe denominator of which is 365.b)Termination by Company for Cause. An Employment Separation for Cause will occur upon a determination by the Company that“Cause” exists for your termination and the Company serves you written notice of such termination. As used in this Agreement, theterm “Cause” shall refer only to any one or more of the following grounds:(i)Commission of an act of dishonesty involving the Company, its business or property, including, but not limited to,misappropriation of funds or any property of the Company;(ii)Engagement in activities or conduct clearly injurious to the best interest or reputation of the Company;(iii)Willful and continued failure substantially to perform your duties under this Agreement (other than as a result ofphysical or mental illness or injury), after the Board of Directors of the Company delivers to you a written demand forsubstantial performance that specifically identifies the manner in which the Board believes that you have notsubstantially performed your duties;Page 5 of 5 Change in Control & Non-competition Agreement | Boese(iv)Illegal conduct or gross misconduct that is willful and results in material and demonstrable damage to the business orreputation of the Company;(v)The clear and willful violation of any of the material terms and conditions of this Agreement or any other writtenagreement or agreements you may from time to time have with the Company;(vi)The clear and willful violation of the Company’s code of business conduct or the clear violation of any other rules ofbehavior as may be provided in any employee handbook which would be grounds for dismissal of any employee of theCompany or;(vii)Commission of a crime which is a felony, a misdemeanor involving an act of moral turpitude, or a misdemeanorcommitted in connection with your employment by the Company which causes the Company a substantial detriment.(viii)No act or failure to shall be considered “willful” unless it is done, or omitted to be done, by you in bad faith or withoutreasonable belief that your action or omission was in the best interests of the Company. Any act or failure to act that isbased upon authority given pursuant to a resolution duly adopted by the Board of Directors, or the advice of counsel forthe Company, shall be conclusively presumed to be done, or omitted to be done, by you in the good faith and in the bestinterest of the Company.(ix)In the event of a termination under this Section 8 (b), the Company will pay you only the earned but unpaid portion ofyour Basic Salary through the termination date.(x)Following a termination for Cause by the Company, if you desire to contest such determination, your sole remedy willbe to submit the Company’s determination of Cause to arbitration in Columbus, Ohio before a single arbitrator underthe commercial arbitration rules of the American Arbitration Association. If the arbitrator determines that thetermination was other than for Cause, the Company’s sole liability to you will be the amount that would be payable toyou under Section 8.d) of this Agreement for a termination of your employment by the Company without Cause. Eachparty will bear his or its own expenses of the arbitration.c)Termination by You. In the event of an Employment Separation as a result of a termination by your for any reason, you must providethe Company with a least 14 days advance written notice (“Notice of Termination”) and continue working for the Company duringthe 14-day notice period, but only if the Company so desires to continue your employment and to compensate you during suchperiod.In the event of such termination under this Section, the Company will pay you the earned but unpaid portion of your Basic Salarythrough the termination date.d)Termination by Company Without Cause. In the event of an Employment Separation as a result of termination by the Companywithout Cause, the Company will pay you the earned but unpaidPage 6 of 6 Change in Control & Non-competition Agreement | Boeseportion of your Basic Salary through the termination date and will continue to pay you your Basic Salary in accordance with theCompany’s payroll practices in effect at the time of the Employment Separation for an additional twelve (12) months (the “SeverancePeriod”); provided, however, any such payments will immediately end if (i) you are in violation of any of your obligations under thisAgreement, including Sections 5, 6 or 7 ; or (ii) the Company, after your termination, learns of any facts about your job performanceor conduct that would have given the Company Cause, as defined in Section 8.b), to terminate your employment. Additionally, youwill be entitled to any Annual Bonus earned with respect to the previous calendar year, but unpaid as of the employment terminationdate; and a prorated amount of the Annual Bonus for the calendar year in which the termination occurs, calculated by multiplying theAnnual Bonus that the Executive would have received for such year had Executive’s employment continued through the end of suchcalendar year by a fraction, the numerator of which is the number of days the Executive was employed during the applicable year andthe denominator of which is 365.e)Termination Following Change of Control. If a “Change in Control” as defined in Section 8 (e) (v), shall have occurred and within13 months following such Change in Control the Company terminates your employment other than for Cause, as defined in Section 8(b), or you terminate your employment for Good Reason, as that term is defined in Section 8(e) (vi), then you shall be entitled to thebenefits described below:(i)You shall be entitled to the unpaid portion Basic Salary plus credit for any vacation accrued but not taken and theamount of any earned but unpaid portion of any bonus, incentive compensation, or any other Fringe Benefit to whichyou are entitled under this Agreement through the date of the termination as a result of a Change in Control (the“Unpaid Earned Compensation”), plus 1.0 times your “Current Annual Compensation” as defined in this Section 8e (i)(the “Salary Termination Benefit”). “Current Annual Compensation” shall mean the total of your Basic Salary in effectat the Termination Date, plus the average annual performance bonus actually received by you over the last three yearsfiscal years (or if you have been employed for a shorter period of time over such period during which you performedservices for the Company) plus any medical, financial and insurance coverage provided presently under your currentannual compensation plan, and shall not include the value of any stock options granted or exercised, restricted stockawards granted or vested, contributions to 401 (k) or other qualified plans.”(ii)Immediate vesting of all outstanding stock options and restricted stock awards issued to you, and thereafter shall beexercisable for a period of at least 12 months after the Termination Date but, in no event following the expiration dateof eh term of such options.(iii)The Company shall maintain for your benefit (or at your election make COBRA payments for your benefit), until theearlier of (A) 12 months after termination of employment following a Change in Control, or (B) your commencementof full-time employment with a new employer with comparable benefits, all life insurance, medical, health andaccident, and disability plans or programs, such plans or programs to be maintained at the then current standards of theCompany, in which you shall have been entitled to participate prior to termination of employmentPage 7 of 7 Change in Control & Non-competition Agreement | Boesefollowing a Change in Control, provided your continued participation is permitted under the generalterms of such plans and programs after the Change in Control (“Fringe Termination Benefit”); (collectively the SalaryTermination Benefit and the Fringe Termination Benefit are referred to as the “Termination Benefits”).(iv)The Unpaid Earned Compensation shall be paid to you within 15 days after termination of employment, one-half of theSalary Termination Benefit shall be payable to you as severance pay in a lump sum payment within 30 days aftertermination of employment, and one-half of the Salary Termination Benefit shall be payable to you as severance pay inequal monthly payments commencing 30 days after termination of employment and ending on the date that is the earlierof two and one-half months after the end of the Company’s fiscal year in which termination occurred or your death;provided, however, the Company may immediately discontinue the payment of the Termination Benefits if (i) you arein violation of any of your obligations under this Agreement, including in Sections 5, 6 or 7; and/or (ii) the Company,after your termination, learns of any facts about your job performance or conduct that would have given the CompanyCause as defined in Section 8 (b) to terminate your employment. You shall have no duty to mitigate your damages byseeking other employment, and the Company shall not be entitled to set off against amounts payable hereunder anycompensation which you may receive from future employment. To the extent necessary, the parties hereto agree tonegotiate in good faith should any amendment to this Agreement required in order to comply with Section 409A of theCode, provided, however, no amendment shall be effected after the occurrence of a Change in Control.(v)A “Change in Control” shall be deemed to have occurred if and when, after the date hereof, (i) any “person” (as thatterm is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) onthe date hereof), including any “group” as such term is used in Section 13(d)(3) of the Exchange Act on the date hereof,shall acquire (or disclose the previous acquisition of) beneficial ownership (as that term is defined in Section 13(d) ofthe Exchange Act and the rules thereunder on the date hereof) of shares of the outstanding stock of any class or classesof the Company which results in such person or group possessing more than 50% of the total voting power of theCompany’s outstanding voting securities ordinarily having the right to vote for the election of directors of theCompany; or (ii) as the result of, or in connection with, any tender or exchange offer, merger or other businesscombination, or contested election, or any combination of the foregoing transactions (a “Transaction”), the owners ofthe voting shares of the Company outstanding immediately prior to such Transaction own less than a majority of thevoting shares of the Company after the Transaction; or (iii) during any period of two consecutive years during the termof this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company(or who take office following the approval of a majority of the directors then in office who were directors at thebeginning of the period) cease forPage 8 of 8 Change in Control & Non-competition Agreement | Boeseany reason to constitute at least one-half thereof, unless the election of each director who was not a director at thebeginning of such period has been approved in advance by directors of the Company representing at least one-half ofthe directors then in office who were directors at the beginning of the period; or (iv) the sale, exchange, transfer, orother disposition of all or substantially all of the assets of the Company (a “Sale Transaction”) shall have occurred.Notwithstanding the foregoing, an event shall not be treated as a “Change in Control” hereunder unless such event alsoconstitutes a change in the ownership of a substantial portion of the assets of a corporation pursuant to the Section 409Aof the Internal Revenue Code of 1986, as amended (the “Code”) and the treasury regulations and other official guidancepromulgated thereunder (collectively, “Code Section 409A”).(vi)As used in this Agreement, the term “Good Reason” means without your written consent:(A)a material change in our status, position or responsibilities which, in your reasonable judgment, does notrepresent a promotion from your existing status, position or responsibilities as in effectimmediately prior to the Change in Control; the assignment of any duties or responsibilitiesor the removal or termination of duties or responsibilities (except in connection with thetermination of employment for total and permanent disability, death, or Cause, or by youother than for Good Reason), which, in your reasonable judgment, are materially inconsistentwith such status, position or responsibilities;(B)a reduction by the Company in your Basic Salary as in effect on the date hereof or as the same may beincreased from time to time during the term of this Agreement or the Company’s failure toincrease (within twelve months of your last increase in Basic Salary) your Basic Salary after aChange in Control in an amount which at least equals, on a percentage basis, the averagepercentage increase in Basic Salary for all executive and senior officers of the Company, inlike position, which were effected in the preceding twelve months;(C)the relocation of the Company’s principal executive office to a location outside the greater Columbusmetropolitan area or the relocation of you by the Company to any place other than thelocation at which you performed duties prior to a Change in Control, except for requiredtravel on the Company’s business to an extent consistent with business travel obligations at thetime of a Change in Control;(D)the failure of the Company to continue in effect, or continue or materially reduce your participation in, anyincentive, bonus or other compensation plan in which you participate, including but notlimited to the Company’s stock option plans, unless an equitable arrangement (embodied inongoing substitute or alternative plan), has been made orPage 9 of 9 Change in Control & Non-competition Agreement | Boeseoffered with respect to such plan in connection with the Change in Control;(E)the failure by the company to continue to provide you with benefits substantially similar to those enjoyed orto which you are entitled under any of the Company’s deferred compensation, pension, profitsharing, life insurance, medical, dental, health and accident, or disability plans at the time of aChange in Control, the taking of any action by the Company which would directly orindirectly materially reduce any of such benefits or deprive you of any material fringe benefitenjoyed or to which you are entitled at the time of the Change in Control, or the failure by theCompany to provide the number of paid vacation and sick leave days to which you areentitled on the basis of years of service with the Company in accordance with the Company’snormal vacation policy in effect on the date hereof;(F)the failure of the Company to obtain a satisfactory agreement from any successor or assign of the Companyto assume and agree to perform this Agreement;(G)any request by the Company that you participate in an unlawful act or take any action constituting a breachof your professional standard of conduct; or(H)any breach of the Agreement on the part of the Company, Notwithstanding anything in this Section to thecontrary, your right to terminate your employment pursuant to this Section shall not beaffected by incapacity due to physical or mental illness.(vii)Upon any termination or expiration of the Agreement or any cessation of your employment hereunder, the Companyshall have no further obligations under this Agreement and no further payments shall be payable by the Company toyou, except as provided in Section 8 above and except as required under any benefit plans or arrangements maintainedby the Company and applicable to you at the time of such termination, expiration or cessation of your employment.(viii)Enforcement of Agreement. The Company is aware that upon the occurrence of a Change in Control, the Board ofDirectors or a shareholder of the Company may then cause or attempt to cause the Company to refuse to comply with itsobligations under this Agreement, or may cause or attempt to cause the Company to institute, or may institute litigationseeking to have this Agreement declared unenforceable, or may take or attempt to take other action to deny you thebenefits intended under this Agreement. In these circumstances, the purpose of this Agreement could be frustrated.Accordingly, if following a Change in Control it should appear to you that the Company has failed to comply with anyof its obligations under Section 8 of this Agreement or in the event that the Company or any other person takes anyaction to declare Section 8 of this Agreement void or enforceable , or institutes anyPage 10 of 10 Change in Control & Non-competition Agreement | Boeselitigation or other legal action designed to deny, diminish or to recover from you the benefits entitled to be provided toyou under Section 8, and that you have complied with all your obligations under this Agreement, the Companyauthorizes you to retain counsel of your choice, at the expense of the Company as provided in this Section 8(e)(viii), torepresent you in connection with the initiation or defense of any pre-suit settlement negotiations, litigation or other legalaction, whether such action is by or against the Company or any Director, officer, shareholder, or other person affiliatedwith the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between theCompany and such counsel, the Company consents to you entering into an attorney-client relationship with suchcounsel, and in that connection the Company and you agree that a confidential relationship shall exist between you andsuch counsel, except with respect to any fee and expense invoices generated by such counsel. The reasonable fees andexpenses of counsel selected by you as hereinabove provided shall be paid or reimbursed to you by the Company on aregular, periodic basis upon presentation by you of a statement or statements prepared by such counsel in accordancewith its customary practices, up to a maximum aggregate amount of $50,000. Any legal expenses incurred by theCompany by reason of any dispute between the parties as to enforceability of Section 8 or the terms contained inSection 8 (f) notwithstanding the outcome of any such dispute, shall be the sole responsibility of the Company, and theCompany shall not take any action to seek reimbursement from you for such expenses.f)The non-competition periods described in Section 7 of this Agreement shall be suspended while you engage in any activities in breachof this Agreement. In the event that a court grants injunctive relief to the Company for your failure to comply with Section 7, thenoncompetition period shall begin again on the date such injunctive relief is granted.g)Nothing contained in this Section 8 shall be construed as limiting your obligations under Sections 5, 6 or 7 of this Agreementconcerning Confidential Information, Inventions, or Non-competition and Non-solicitation.9.Remedies; Venue; Process.a)You hereby acknowledge and agree that the Confidential Information disclosed to you prior to and during the term of this Agreementis of a special, unique and extraordinary character, and that any breach of this Agreement will cause the Company irreparable injuryand damage, and consequently the Company shall be entitled, in addition to all other legal and equitable remedies available to it, toinjunctive and any other equitable relief to prevent or cease a breach of Sections 5, 6 or 7 of this Agreement without further proof ofharm and entitlement; that the terms of this Agreement, if enforced by the Company, will not unduly impair your ability to earn aliving or pursue your vocation; and further, that the Company may cease paying any compensation and benefits under Section 8 ifyou fail to comply with this Agreement, without restricting the Company from other legal and equitable remedies. The parties agreethat the prevailing party in litigation concerning a breach of this Agreement shall be entitled to all costs and expenses (includingreasonable legal fees and expenses) which it incurs in successfully enforcing this Agreement and in prosecuting or defending anylitigation (including appellate proceedings) concerning a breach of this Agreement.Page 11 of 11 Change in Control & Non-competition Agreement | Boeseb)Except for actions brought under Section 8 (b) of this Agreement, the parties agree that jurisdiction and venue in any action broughtpursuant to this Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie ineither the United States District Court for the Southern District of Ohio, Eastern Division, Columbus, Ohio, or the Court of CommonPleas of Franklin County, Ohio. Such jurisdiction and venue is exclusive, except that the Company may bring suit in any jurisdictionand venue where jurisdiction and venue would otherwise be proper if you may have breached Sections 5, 6 or 7 of this Agreement.The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any suchcourt shall constitute valid and lawful service of process against them, without the necessity for service by any other means providedby statute or rule of court.10.Exit Interview. Prior to Employment Separation, you shall attend an exit interview if desired by the Company and shall, in any event, informthe Company at the earliest possible time of the identify of your future employer and of the nature of your future employment.11.No Waiver. Any failure by the Company to enforce any provision of the Agreement shall not in any way affect the Company’s right toenforce such provision or any other provision at a later time.12.Saving. If any provision of this Agreement is later found to be completely or partially unenforceable, the remaining part of that provision ofany other provision of this Agreement shall still be valid and shall not in any way be affected by the finding. Moreover, if any provision is forany reason held to be unreasonably broad as to time, duration, geographical scope, activity or subject, such provision shall be interpreted andenforced by limiting and reducing it to preserve enforceability to the maximum extent permitted by law.13.No Limitation. You acknowledge that your employment by the Company may be terminated at any time by the Company or by you with orwithout cause in accordance with the terms of this Agreement. This Agreement is in addition to and not in place of other obligations of trust,confidence and ethical duty imposed on you by law.14.Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Ohio without reference to itschoice of law rules.15.Final Agreement. This Agreement replaces any existing agreement between you and the Company relating to the same subject matter andmay be modified only by an agreement in writing signed by both you and a duly authorized representative of the Company.16.Further Acknowledgements. YOU ACKNOWLEDGE THAT YOU HAVE RECEIVED A COPY OF THIS AGREEMENT, THAT YOUHAVE READ AND UNDERSTOOD THIS AGREEMENT, THAT YOU UNDERSTAND THIS AGREEMENT AFFECTS YOURRIGHTS, AND THAT YOU HAVE ENTERED INTO THIS AGREEEMENT VOLUNTARILY.17.Code of Section 409A Compliancea)The intent of the parties is that payments and benefits under this Agreement comply with Code Section 409A and, accordingly, to themaximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereofis modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximumextent reasonably possible, maintain the original intent and economicPage 12 of 12 Change in Control & Non-competition Agreement | Boesebenefit to the parties hereto of the applicable provision without violating the provisions of Code Section 409A. In no eventwhatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by CodeSection 409A or damages for failing to comply with Code Section 409A.b)An “Employment Separation: shall not be deemed to have occurred for purposes of any provision of this Agreement providing for thepayment of any amounts or benefits upon or following an Employment Separation unless such Employment Separation is also a“separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement,references to an Employment Separation or like terms shall mean “separation from service.” If the Executive is deemed on the date oftermination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to anypayment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a“separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration ofthe six (6)-month period measured from the date of such “separation from service” of the Executive, and (ii) the date of theExecutive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to thisSection (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall bepaid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paidor provided in accordance with the normal payment dates specified for them herein.c)All expenses or other reimbursements under this Agreement shall be made on or prior to the last day of the taxable year following thetaxable year in which such expenses were incurred by the Executive (provided that if any such reimbursements constitute taxableincome to the Executive, such reimbursements shall be paid no later than March 15th of the calendar year following the calendar yearin which the expenses to be reimbursed were incurred), and no such reimbursement or expenses eligible for reimbursement in anytaxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year.d)For purpose of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall betreated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a paymentperiod with reference to a number of days (e.g., “payment shall be made within thirty (30) days”), the actual date of payment withinthe specified period shall be within the sole discretion of the Company.e)In no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A beoffset by any other payment pursuant to this Agreement or otherwise.”Commercial Vehicle Group, Inc.:By /s/ Laura MaciasLaura L. MaciasChief Human Resources OfficerPage 13 of 13 Change in Control & Non-competition Agreement | BoeseExecutive:By /s/ Greg BoeseGreg BoeseSenior Vice President and Managing Director, GT&B Seats Page 14 of 14 Change in Control & Non-competition Agreement | BoeseCHANGE IN CONTROLS &NON-COMPETITION AGREEMENTThis Agreement is made as of this 1st day of February, 2016 by and between Dale McKillop (“Executive”) and Commercial Vehicle Group, Inc., aDelaware corporation with its principal office at 7800 Walton Parkway, New Albany, Ohio 43054, its subsidiaries, successors and assigns (the“Company”).RecitalsA.The Company is engaged in the business of developing, manufacturing, and marketing of interior systems, vision safety solutions and othercab-related related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the constructionmarket and other specialized transportation markets and in connection therewith develops and uses valuable technical and nontechnical tradesecrets and other confidential information which it desires to protect.B.You will continue to be employed as an office or key employee of the Company.C.The Company considers your continued services to be in the best interest of the Company and desires, through this Agreement, to assure yourcontinued services on behalf of the Company on an objective and impartial basis and without distraction or conflict of interest in the event ofan attempt to obtain control of the Company.D.You are willing to remain in the employ of the Company on the terms set forth in this agreement.AgreementNOW, THEREFORE, the parties agree as follows:1.Consideration. As consideration for your entering into this Agreement and your willingness to remain bound by its terms, the Companyshall continue to employ you and provide you with access to certain Confidential Information as defined in this Agreement and other valuableconsideration as provided for throughout this Agreement, including in Sections 3 and 4 of this Agreement.2.Employmenta)Position. You will continue to be employed as Senior Vice President and Managing Director, reporting to the President and ChiefExecutive Officer of the Company. You shall continue to perform the duties, undertake the responsibilities and exercise the authoritycustomarily performed, undertaken and exercised by persons employed in similar executive capacities.b)Restricted Employment. While employed by the Company, you shall devote your best efforts to the business of the Company andshall not engage in any outside employment or consulting work without first securing the approval of the Company’s Board ofDirectors. Furthermore, so long as you are employed under this Agreement, you agree to devote your full time and effortsPage 1 of 1 Change in Control & Non-competition Agreement | McKillopexclusively on behalf of the Company and to competently, diligently, and effectively discharge your duties hereunder. You shall notbe prohibited from engaging in such personal, charitable, or other non-employment activities that do not interfere with your full timeemployment hereunder and which do not violate the other provisions of this Agreement. You further agree to comply fully with allpolicies and practices of the Company as are from time to time in effect.3.Compensationa)Your compensation will be continued at your current annual base rate (“Basic Salary”), payable in accordance with the normal payrollpractices of the Company. Your base salary may be increased from time to time by action of the Board of Directors of the Company.You will also be eligible for a cash bonus under a performance bonus plan which is determined annually by the Board of Directors ofthe Company.b)You will be entitled to receive equity and other long term incentive awards (including but not limited to stock awards) pursuant to theterms of the Company’s Equity Incentive Plan or other plan adopted by the Board of Directors of the Company from time to time. Ifa “Change in Control,” as defined in Section 8(e)(v) shall occur (i) in which the Company does not survive as a result of such Changein Control, or substantially all of the assets of the Company are sold as a result of such Change in Control, and (ii) in which thesurviving entity does not assume the obligations of your outstanding stock options upon the Change in Control, then all outstandingstock options and restricted stock issued to you prior to the Change in Control will be immediately vested upon such Change ofControl and such options will be exercisable for a period of at least 12 months from the date of the Change in Control, but, in noevent, following the expiration date of the term of such stock options.c)Subject to applicable Company policies, you will be reimbursed for necessary and reasonable business expenses incurred inconnection with the performance of your duties hereunder or for prompting, pursuing or otherwise furthering the business or interestof the Company.4.Fringe Benefits. You will be entitled to receive employee benefits and participate in any employee benefit plans, in accordance with theirterms as from time to time amended, that the Company maintains during your employment and which are made generally available to allother executive management employees in like positions. This includes medical and dental insurance, life insurance, disability insurance,supplemental medical insurance and 401(k) plan including all executive benefits as approved by the Board of Directors’ CompensationCommittee.5.Confidential Informationa)As used throughout this Agreement, the term “Confidential Information” means any information you acquire during employment bythe Company (including information you conceive, discover or develop) which is not readily available to the general public andwhich relates to the business, including research and development projects, of the Company, its subsidiaries or its affiliatedcompanies.Page 2 of 2 Change in Control & Non-competition Agreement | McKillopb)Confidential Information includes, without limitation, information of a technical nature (such as trade secrets, inventions, discoveries,product requirements, designs, software codes and manufacturing methods), matters of a business nature (such as customer lists, theidentities of customer contacts, information about customer requirements and preferences, the terms of the Company’s contracts withits customers and suppliers, and the Company’s costs and prices), personnel information (such as the identities, duties, customercontacts, and skills of the Company’s employees) and other financial information relating to the Company and its customers(including credit terms, methods of conducting business, computer systems, computer software, personnel data, and strategicmarketing, sales or other business plans.) Confidential Information may or may not be patentable.c)Confidential Information does not include information which you learned prior to employment with the Company from sources otherthan the Company, information you develop after employment from sources other than the Company’s Confidential Information orinformation which is readily available to persons with equivalent skills, training and experience in the same fields or fields ofendeavor as you. You must presume that all information that is disclosed or made accessible to you during employment by theCompany is Confidential Information if you have a reasonable basis to believe the information is Confidential Information or if youhave notice that the Company treats the information as Confidential Information.d)Except in conducting the Company’s business, you shall not at any time, either during or following your employment with theCompany, make use of, or disclose to any other person or entity, any Confidential Information unless (i) the specific informationbecomes public from a source other than you or another person or entity that owes a duty of confidentiality to the Company and (ii)twelve months have passed since the specific information became public. However, you may discuss Confidential Information withemployees of the Company when necessary to perform your duties to the Company. Notwithstanding the foregoing, if you areordered by a court of competent jurisdiction to disclose Confidential Information, you will officially advise the Court that you areunder a duty of confidentiality to the Company hereunder, take reasonable steps to delay disclosure until the Company may be heardby the Court, give the Company prompt notice of such Court order, and if ordered to disclose such Confidential Information youshall seek to do so under seal or in camera or in such other manner as reasonably designed to restrict the public disclosure andmaintain the maximum confidentiality of such Confidential Information.e)Upon Employment Separation, you shall deliver to the Company all originals, copies, notes, documents, computer data bases, disks,and CDs, or records of any kind that reflect or relate to any Confidential Information. As used herein, the term “notes” means writtenor printed words, symbols, pictures, numbers or formulae. As used throughout this Agreement, the term “Employment Separation”means the separation from and/or termination of your employment with the Company, regardless of the time, manner or cause ofsuch separation or termination.6.Inventions.Page 3 of 3 Change in Control & Non-competition Agreement | McKillopa)As used throughout this Agreement, the term “Inventions” means any inventions, improvements, designs, plans, discoveries orinnovations of a technical or business nature, whether patentable or not, relating in any way to the Company’s business orcontemplated business if the Invention is conceived or reduced to practice by you during your employment by the Company.Inventions include all data, records, physical embodiments and intellectual property pertaining thereto. Inventions reduced to practicewithin one year following Employment Separation shall be presumed to have been conceived during employment.b)Inventions are the Company’s exclusive property and shall be promptly disclosed and assigned to the Company without additionalcompensation of any kind. If requested by the Company, you, your heirs, your executors, your administrators or legal representativewill provide any information, documents, testimony or other assistance needed for the Company to acquire, maintain, perfect orexercise any form of legal protection that the Company desires in connection with and Invention.c)Upon Employment Separation, you shall deliver to the Company all copies of and all notes with respect to all documents or recordsof any king that relate to any Inventions.7.Non-competition and Non-solicitation.a)By entering into this Agreement, you acknowledge that the Confidential Information has been and will be developed and acquired bythe Company by means of substantial expense and effort, that the Confidential Information is a valuable asset of the Company’sbusiness, that the disclosure of the Confidential Information to any of the Company’s competitors would cause substantial andirreparable injury to the Company’s business, and that any customers of the Company developed by you or others during youremployment are developed on behalf of the Company. You further acknowledge that you have been provided with access toConfidential Information, including Confidential Information concerning the Company’s major customers, and its technical,marketing and business plans, disclosure or misuse of which would irreparably injure the Company.b)In exchange for the consideration specified in Section 1 of this Agreement — the adequacy of which you expressly acknowledge —you agree that during your employment by the Company and for a period of twelve (12) months following Employment Separation,you shall not, directly or indirectly, as an owner, shareholder, officer, employee, manager, consultant, independent contractor, orotherwise:(i)Attempt to recruit or hire, interfere with or harm, or attempt to interfere with or harm, the relationship of theCompany, its subsidiaries or affiliates, with any person who is an employee, customer or supplier of the Company, itssubsidiaries or affiliates;(ii)Contact any employee of the Company for the purpose of discussion or suggesting that such employee resign formemployment with the Company for the purpose of becoming employed elsewhere or provide information aboutindividual employees of the Company or personnel policies or procedures of the Company to any person or entity,including any individual,Page 4 of 4 Change in Control & Non-competition Agreement | McKillopagency or company engaged in the business of recruiting employees, executives or officer; or(iii)Own, manage, operate, join control, be employed by, consult with or participate in the ownership, management,operation or control of, or be connected with (as a stockholder, partner, or otherwise), any business, individual, partner,firm, corporation, or other entity that competes or plans to compete, directly or indirectly, with the Company, itsproducts, or any division, subsidiary or affiliate of the Company; provided, however, that your “beneficial ownership,”either individually or as a member of a “group” as such terms are used in Rule 13d of the General Rules andRegulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of not more than twopercent (2%) of the voting stock of any publicly held corporation, shall not be a violation of this Agreement.8.Termination of Employmenta)Termination Upon Death or Disability. Your employment will terminate automatically upon your death. The Company will beentitled to terminate your employment because of your disability upon 30 days written notice. “Disability” will mean “total disability”as defined in the Company’s long term disability plan or any successor thereto. In the event of a termination under this Section, 8 (a),the Company will pay you the earned but unpaid portion of your Basic Salary through the termination date. Additionally, you will beentitled to any Annual Bonus earned with respect to the previous calendar year, but unpaid as of the employment termination date;and a prorated amount of the Annual Bonus for the calendar year in which the termination occurs, calculated by multiplying theAnnual Bonus that the Executive would have received for such year had Executive’s employment continued through the end of suchcalendar year by a fraction, the numerator of which is the number of days the Executive was employed during the applicable year andthe denominator of which is 365.b)Termination by Company for Cause. An Employment Separation for Cause will occur upon a determination by the Company that“Cause” exists for your termination and the Company serves you written notice of such termination. As used in this Agreement, theterm “Cause” shall refer only to any one or more of the following grounds:(i)Commission of an act of dishonesty involving the Company, its business or property, including, but not limited to,misappropriation of funds or any property of the Company;(ii)Engagement in activities or conduct clearly injurious to the best interest or reputation of the Company;(iii)Willful and continued failure substantially to perform your duties under this Agreement (other than as a result ofphysical or mental illness or injury), after the Board of Directors of the Company delivers to you a written demand forsubstantial performance that specifically identifies the manner in which the Board believes that you have notsubstantially performed your duties;Page 5 of 5 Change in Control & Non-competition Agreement | McKillop(iv)Illegal conduct or gross misconduct that is willful and results in material and demonstrable damage to the business orreputation of the Company;(v)The clear and willful violation of any of the material terms and conditions of this Agreement or any other writtenagreement or agreements you may from time to time have with the Company;(vi)The clear and willful violation of the Company’s code of business conduct or the clear violation of any other rules ofbehavior as may be provided in any employee handbook which would be grounds for dismissal of any employee of theCompany or;(vii)Commission of a crime which is a felony, a misdemeanor involving an act of moral turpitude, or a misdemeanorcommitted in connection with your employment by the Company which causes the Company a substantial detriment.(viii)No act or failure to shall be considered “willful” unless it is done, or omitted to be done, by you in bad faith or withoutreasonable belief that your action or omission was in the best interests of the Company. Any act or failure to act that isbased upon authority given pursuant to a resolution duly adopted by the Board of Directors, or the advice of counsel forthe Company, shall be conclusively presumed to be done, or omitted to be done, by you in the good faith and in the bestinterest of the Company.(ix)In the event of a termination under this Section 8 (b), the Company will pay you only the earned but unpaid portion ofyour Basic Salary through the termination date.(x)Following a termination for Cause by the Company, if you desire to contest such determination, your sole remedy willbe to submit the Company’s determination of Cause to arbitration in Columbus, Ohio before a single arbitrator underthe commercial arbitration rules of the American Arbitration Association. If the arbitrator determines that thetermination was other than for Cause, the Company’s sole liability to you will be the amount that would be payable toyou under Section 8.d) of this Agreement for a termination of your employment by the Company without Cause. Eachparty will bear his or its own expenses of the arbitration.c)Termination by You. In the event of an Employment Separation as a result of a termination by your for any reason, you must providethe Company with a least 14 days advance written notice (“Notice of Termination”) and continue working for the Company duringthe 14-day notice period, but only if the Company so desires to continue your employment and to compensate you during suchperiod.In the event of such termination under this Section, the Company will pay you the earned but unpaid portion of your Basic Salarythrough the termination date.d)Termination by Company Without Cause. In the event of an Employment Separation as a result of termination by the Companywithout Cause, the Company will pay you the earned but unpaidPage 6 of 6 Change in Control & Non-competition Agreement | McKillopportion of your Basic Salary through the termination date and will continue to pay you your Basic Salary in accordance with theCompany’s payroll practices in effect at the time of the Employment Separation for an additional twelve (12) months (the “SeverancePeriod”); provided, however, any such payments will immediately end if (i) you are in violation of any of your obligations under thisAgreement, including Sections 5, 6 or 7 ; or (ii) the Company, after your termination, learns of any facts about your job performanceor conduct that would have given the Company Cause, as defined in Section 8.b), to terminate your employment. Additionally, youwill be entitled to any Annual Bonus earned with respect to the previous calendar year, but unpaid as of the employment terminationdate; and a prorated amount of the Annual Bonus for the calendar year in which the termination occurs, calculated by multiplying theAnnual Bonus that the Executive would have received for such year had Executive’s employment continued through the end of suchcalendar year by a fraction, the numerator of which is the number of days the Executive was employed during the applicable year andthe denominator of which is 365.e)Termination Following Change of Control. If a “Change in Control” as defined in Section 8 (e) (v), shall have occurred and within13 months following such Change in Control the Company terminates your employment other than for Cause, as defined in Section 8(b), or you terminate your employment for Good Reason, as that term is defined in Section 8(e) (vi), then you shall be entitled to thebenefits described below:(i)You shall be entitled to the unpaid portion Basic Salary plus credit for any vacation accrued but not taken and theamount of any earned but unpaid portion of any bonus, incentive compensation, or any other Fringe Benefit to whichyou are entitled under this Agreement through the date of the termination as a result of a Change in Control (the“Unpaid Earned Compensation”), plus 1.0 times your “Current Annual Compensation” as defined in this Section 8e (i)(the “Salary Termination Benefit”). “Current Annual Compensation” shall mean the total of your Basic Salary in effectat the Termination Date, plus the average annual performance bonus actually received by you over the last three yearsfiscal years (or if you have been employed for a shorter period of time over such period during which you performedservices for the Company) plus any medical, financial and insurance coverage provided presently under your currentannual compensation plan, and shall not include the value of any stock options granted or exercised, restricted stockawards granted or vested, contributions to 401 (k) or other qualified plans.”(ii)Immediate vesting of all outstanding stock options and restricted stock awards issued to you, and thereafter shall beexercisable for a period of at least 12 months after the Termination Date but, in no event following the expiration dateof eh term of such options.(iii)The Company shall maintain for your benefit (or at your election make COBRA payments for your benefit), until theearlier of (A) 12 months after termination of employment following a Change in Control, or (B) your commencementof full-time employment with a new employer with comparable benefits, all life insurance, medical, health andaccident, and disability plans or programs, such plans or programs to be maintained at the then current standards of theCompany, in which you shall have been entitled to participate prior to termination of employmentPage 7 of 7 Change in Control & Non-competition Agreement | McKillopfollowing a Change in Control, provided your continued participation is permitted under the generalterms of such plans and programs after the Change in Control (“Fringe Termination Benefit”); (collectively the SalaryTermination Benefit and the Fringe Termination Benefit are referred to as the “Termination Benefits”).(iv)The Unpaid Earned Compensation shall be paid to you within 15 days after termination of employment, one-half of theSalary Termination Benefit shall be payable to you as severance pay in a lump sum payment within 30 days aftertermination of employment, and one-half of the Salary Termination Benefit shall be payable to you as severance pay inequal monthly payments commencing 30 days after termination of employment and ending on the date that is the earlierof two and one-half months after the end of the Company’s fiscal year in which termination occurred or your death;provided, however, the Company may immediately discontinue the payment of the Termination Benefits if (i) you arein violation of any of your obligations under this Agreement, including in Sections 5, 6 or 7; and/or (ii) the Company,after your termination, learns of any facts about your job performance or conduct that would have given the CompanyCause as defined in Section 8 (b) to terminate your employment. You shall have no duty to mitigate your damages byseeking other employment, and the Company shall not be entitled to set off against amounts payable hereunder anycompensation which you may receive from future employment. To the extent necessary, the parties hereto agree tonegotiate in good faith should any amendment to this Agreement required in order to comply with Section 409A of theCode, provided, however, no amendment shall be effected after the occurrence of a Change in Control.(v)A “Change in Control” shall be deemed to have occurred if and when, after the date hereof, (i) any “person” (as thatterm is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) onthe date hereof), including any “group” as such term is used in Section 13(d)(3) of the Exchange Act on the date hereof,shall acquire (or disclose the previous acquisition of) beneficial ownership (as that term is defined in Section 13(d) ofthe Exchange Act and the rules thereunder on the date hereof) of shares of the outstanding stock of any class or classesof the Company which results in such person or group possessing more than 50% of the total voting power of theCompany’s outstanding voting securities ordinarily having the right to vote for the election of directors of theCompany; or (ii) as the result of, or in connection with, any tender or exchange offer, merger or other businesscombination, or contested election, or any combination of the foregoing transactions (a “Transaction”), the owners ofthe voting shares of the Company outstanding immediately prior to such Transaction own less than a majority of thevoting shares of the Company after the Transaction; or (iii) during any period of two consecutive years during the termof this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company(or who take office following the approval of a majority of the directors then in office who were directors at thebeginning of the period) cease forPage 8 of 8 Change in Control & Non-competition Agreement | McKillopany reason to constitute at least one-half thereof, unless the election of each director who was not a director at thebeginning of such period has been approved in advance by directors of the Company representing at least one-half ofthe directors then in office who were directors at the beginning of the period; or (iv) the sale, exchange, transfer, orother disposition of all or substantially all of the assets of the Company (a “Sale Transaction”) shall have occurred.Notwithstanding the foregoing, an event shall not be treated as a “Change in Control” hereunder unless such event alsoconstitutes a change in the ownership of a substantial portion of the assets of a corporation pursuant to the Section 409Aof the Internal Revenue Code of 1986, as amended (the “Code”) and the treasury regulations and other official guidancepromulgated thereunder (collectively, “Code Section 409A”).(vi)As used in this Agreement, the term “Good Reason” means without your written consent:(A)a material change in our status, position or responsibilities which, in your reasonable judgment, does notrepresent a promotion from your existing status, position or responsibilities as in effectimmediately prior to the Change in Control; the assignment of any duties or responsibilitiesor the removal or termination of duties or responsibilities (except in connection with thetermination of employment for total and permanent disability, death, or Cause, or by youother than for Good Reason), which, in your reasonable judgment, are materially inconsistentwith such status, position or responsibilities;(B)a reduction by the Company in your Basic Salary as in effect on the date hereof or as the same may beincreased from time to time during the term of this Agreement or the Company’s failure toincrease (within twelve months of your last increase in Basic Salary) your Basic Salary after aChange in Control in an amount which at least equals, on a percentage basis, the averagepercentage increase in Basic Salary for all executive and senior officers of the Company, inlike position, which were effected in the preceding twelve months;(C)the relocation of the Company’s principal executive office to a location outside the greater Columbusmetropolitan area or the relocation of you by the Company to any place other than thelocation at which you performed duties prior to a Change in Control, except for requiredtravel on the Company’s business to an extent consistent with business travel obligations at thetime of a Change in Control;(D)the failure of the Company to continue in effect, or continue or materially reduce your participation in, anyincentive, bonus or other compensation plan in which you participate, including but notlimited to the Company’s stock option plans, unless an equitable arrangement (embodied inongoing substitute or alternative plan), has been made orPage 9 of 9 Change in Control & Non-competition Agreement | McKillopoffered with respect to such plan in connection with the Change in Control;(E)the failure by the company to continue to provide you with benefits substantially similar to those enjoyed orto which you are entitled under any of the Company’s deferred compensation, pension, profitsharing, life insurance, medical, dental, health and accident, or disability plans at the time of aChange in Control, the taking of any action by the Company which would directly orindirectly materially reduce any of such benefits or deprive you of any material fringe benefitenjoyed or to which you are entitled at the time of the Change in Control, or the failure by theCompany to provide the number of paid vacation and sick leave days to which you areentitled on the basis of years of service with the Company in accordance with the Company’snormal vacation policy in effect on the date hereof;(F)the failure of the Company to obtain a satisfactory agreement from any successor or assign of the Companyto assume and agree to perform this Agreement;(G)any request by the Company that you participate in an unlawful act or take any action constituting a breachof your professional standard of conduct; or(H)any breach of the Agreement on the part of the Company, Notwithstanding anything in this Section to thecontrary, your right to terminate your employment pursuant to this Section shall not beaffected by incapacity due to physical or mental illness.(vii)Upon any termination or expiration of the Agreement or any cessation of your employment hereunder, the Companyshall have no further obligations under this Agreement and no further payments shall be payable by the Company toyou, except as provided in Section 8 above and except as required under any benefit plans or arrangements maintainedby the Company and applicable to you at the time of such termination, expiration or cessation of your employment.(viii)Enforcement of Agreement. The Company is aware that upon the occurrence of a Change in Control, the Board ofDirectors or a shareholder of the Company may then cause or attempt to cause the Company to refuse to comply with itsobligations under this Agreement, or may cause or attempt to cause the Company to institute, or may institute litigationseeking to have this Agreement declared unenforceable, or may take or attempt to take other action to deny you thebenefits intended under this Agreement. In these circumstances, the purpose of this Agreement could be frustrated.Accordingly, if following a Change in Control it should appear to you that the Company has failed to comply with anyof its obligations under Section 8 of this Agreement or in the event that the Company or any other person takes anyaction to declare Section 8 of this Agreement void or enforceable , or institutes anyPage 10 of 10 Change in Control & Non-competition Agreement | McKilloplitigation or other legal action designed to deny, diminish or to recover from you the benefits entitled to be provided toyou under Section 8, and that you have complied with all your obligations under this Agreement, the Companyauthorizes you to retain counsel of your choice, at the expense of the Company as provided in this Section 8(e)(viii), torepresent you in connection with the initiation or defense of any pre-suit settlement negotiations, litigation or other legalaction, whether such action is by or against the Company or any Director, officer, shareholder, or other person affiliatedwith the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between theCompany and such counsel, the Company consents to you entering into an attorney-client relationship with suchcounsel, and in that connection the Company and you agree that a confidential relationship shall exist between you andsuch counsel, except with respect to any fee and expense invoices generated by such counsel. The reasonable fees andexpenses of counsel selected by you as hereinabove provided shall be paid or reimbursed to you by the Company on aregular, periodic basis upon presentation by you of a statement or statements prepared by such counsel in accordancewith its customary practices, up to a maximum aggregate amount of $50,000. Any legal expenses incurred by theCompany by reason of any dispute between the parties as to enforceability of Section 8 or the terms contained inSection 8 (f) notwithstanding the outcome of any such dispute, shall be the sole responsibility of the Company, and theCompany shall not take any action to seek reimbursement from you for such expenses.f)The non-competition periods described in Section 7 of this Agreement shall be suspended while you engage in any activities in breachof this Agreement. In the event that a court grants injunctive relief to the Company for your failure to comply with Section 7, thenoncompetition period shall begin again on the date such injunctive relief is granted.g)Nothing contained in this Section 8 shall be construed as limiting your obligations under Sections 5, 6 or 7 of this Agreementconcerning Confidential Information, Inventions, or Non-competition and Non-solicitation.9.Remedies; Venue; Process.a)You hereby acknowledge and agree that the Confidential Information disclosed to you prior to and during the term of this Agreementis of a special, unique and extraordinary character, and that any breach of this Agreement will cause the Company irreparable injuryand damage, and consequently the Company shall be entitled, in addition to all other legal and equitable remedies available to it, toinjunctive and any other equitable relief to prevent or cease a breach of Sections 5, 6 or 7 of this Agreement without further proof ofharm and entitlement; that the terms of this Agreement, if enforced by the Company, will not unduly impair your ability to earn aliving or pursue your vocation; and further, that the Company may cease paying any compensation and benefits under Section 8 ifyou fail to comply with this Agreement, without restricting the Company from other legal and equitable remedies. The parties agreethat the prevailing party in litigation concerning a breach of this Agreement shall be entitled to all costs and expenses (includingreasonable legal fees and expenses) which it incurs in successfully enforcing this Agreement and in prosecuting or defending anylitigation (including appellate proceedings) concerning a breach of this Agreement.Page 11 of 11 Change in Control & Non-competition Agreement | McKillopb)Except for actions brought under Section 8 (b) of this Agreement, the parties agree that jurisdiction and venue in any action broughtpursuant to this Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie ineither the United States District Court for the Southern District of Ohio, Eastern Division, Columbus, Ohio, or the Court of CommonPleas of Franklin County, Ohio. Such jurisdiction and venue is exclusive, except that the Company may bring suit in any jurisdictionand venue where jurisdiction and venue would otherwise be proper if you may have breached Sections 5, 6 or 7 of this Agreement.The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any suchcourt shall constitute valid and lawful service of process against them, without the necessity for service by any other means providedby statute or rule of court.10.Exit Interview. Prior to Employment Separation, you shall attend an exit interview if desired by the Company and shall, in any event, informthe Company at the earliest possible time of the identify of your future employer and of the nature of your future employment.11.No Waiver. Any failure by the Company to enforce any provision of the Agreement shall not in any way affect the Company’s right toenforce such provision or any other provision at a later time.12.Saving. If any provision of this Agreement is later found to be completely or partially unenforceable, the remaining part of that provision ofany other provision of this Agreement shall still be valid and shall not in any way be affected by the finding. Moreover, if any provision is forany reason held to be unreasonably broad as to time, duration, geographical scope, activity or subject, such provision shall be interpreted andenforced by limiting and reducing it to preserve enforceability to the maximum extent permitted by law.13.No Limitation. You acknowledge that your employment by the Company may be terminated at any time by the Company or by you with orwithout cause in accordance with the terms of this Agreement. This Agreement is in addition to and not in place of other obligations of trust,confidence and ethical duty imposed on you by law.14.Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Ohio without reference to itschoice of law rules.15.Final Agreement. This Agreement replaces any existing agreement between you and the Company relating to the same subject matter andmay be modified only by an agreement in writing signed by both you and a duly authorized representative of the Company.16.Further Acknowledgements. YOU ACKNOWLEDGE THAT YOU HAVE RECEIVED A COPY OF THIS AGREEMENT, THAT YOUHAVE READ AND UNDERSTOOD THIS AGREEMENT, THAT YOU UNDERSTAND THIS AGREEMENT AFFECTS YOURRIGHTS, AND THAT YOU HAVE ENTERED INTO THIS AGREEEMENT VOLUNTARILY.17.Code of Section 409A Compliancea)The intent of the parties is that payments and benefits under this Agreement comply with Code Section 409A and, accordingly, to themaximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereofis modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximumextent reasonably possible, maintain the original intent and economicPage 12 of 12 Change in Control & Non-competition Agreement | McKillopbenefit to the parties hereto of the applicable provision without violating the provisions of Code Section 409A. In no eventwhatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by CodeSection 409A or damages for failing to comply with Code Section 409A.b)An “Employment Separation: shall not be deemed to have occurred for purposes of any provision of this Agreement providing for thepayment of any amounts or benefits upon or following an Employment Separation unless such Employment Separation is also a“separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement,references to an Employment Separation or like terms shall mean “separation from service.” If the Executive is deemed on the date oftermination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to anypayment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a“separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration ofthe six (6)-month period measured from the date of such “separation from service” of the Executive, and (ii) the date of theExecutive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to thisSection (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall bepaid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paidor provided in accordance with the normal payment dates specified for them herein.c)All expenses or other reimbursements under this Agreement shall be made on or prior to the last day of the taxable year following thetaxable year in which such expenses were incurred by the Executive (provided that if any such reimbursements constitute taxableincome to the Executive, such reimbursements shall be paid no later than March 15th of the calendar year following the calendar yearin which the expenses to be reimbursed were incurred), and no such reimbursement or expenses eligible for reimbursement in anytaxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year.d)For purpose of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall betreated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a paymentperiod with reference to a number of days (e.g., “payment shall be made within thirty (30) days”), the actual date of payment withinthe specified period shall be within the sole discretion of the Company.e)In no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A beoffset by any other payment pursuant to this Agreement or otherwise.”Commercial Vehicle Group, Inc.:By /s/ Laura MaciasLaura L. MaciasChief Human Resources OfficerPage 13 of 13 Change in Control & Non-competition Agreement | McKillopExecutive:By /s/ Dale McKillopDale McKillopSenior Vice President and Managing Director, GT&B Trim, Wipers & Structures Page 14 of 14 Change in Control & Non-competition Agreement | McKillop EXHIBIT 12.1 COMMERCIAL VEHICLE GROUP, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES ($ in thousands) Year Ended December 31 2017 2016 2015 2014 2013EARNINGS Pre-tax income from operations $13,645 $6,834 $16,819 $12,762 $(14,788)Fixed charges 21,553 21,432 23,621 23,230 23,724Capitalized interest — — — — —Earnings available for fixed charges $35,198 $28,266 $40,440 $35,992 $8,936FIXED CHARGES: Interest expense (including debt issuance costsamortized to interest expense) $19,149 $19,318 $21,359 $20,716 $21,087Capitalized interest — — — — —Interest component of rent expense 1 $2,404 $2,114 $2,262 $2,514 $2,637 Total fixed charges $21,553 $21,432 $23,621 $23,230 $23,724 Ratio of earnings to fixed charges 1.63 1.32 1.71 1.55 0.381 For purposes of calculating the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before incometaxes and cumulative effect of change in accounting principles plus fixed charges. Fixed charges include interest expense (includingamortization of deferred financing costs) and an estimate of operating rental expense, approximately 20%, which management believes isrepresentative of the interest component. EXHIBIT 21.1Subsidiaries of Commercial Vehicle Group, Inc. Entity Jurisdiction 1.Cabarrus Plastics, Inc. North Carolina, United States2.Comercial Vehicle Group México, S. de R.L. de C.V. Mexico3.Commercial Vehicle Group, Inc. Delaware, United States4.CVG Alabama, LLC Delaware, United States5.CVG CVS Holdings, LLC Delaware, United States6.CVG CS LLC Delaware, United States7.CVG European Holdings, LLC Delaware, United States8.CVG Global S.à r.l. Luxembourg9.CVG International Holdings, Inc. Barbados10.CVG International S.à r.l. Luxembourg11.CVG Monona Wire, LLC Iowa, United States12.CVG Monona, LLC Delaware, United States13.CVG National Seating Company, LLC Delaware, United States14.CVG Seating (India) Private Limited India15.CVG Sprague Devices, LLC Delaware, United States16.CVG Vehicle Components (Shanghai) Co., Ltd. China17.CVS Holdings Limited United Kingdom18.Mayflower Vehicle Systems, LLC Delaware, United States19.MWC de México, S. de R.L. de C.V. Mexico20.PEKM Kabeltechnik s.r.o. Czech Republic21.Trim Systems Operating Corp. Delaware, United States22.Trim Systems, Inc. Delaware, United States Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsCommercial Vehicle Group, Inc.:We consent to the incorporation by reference in the registration statements (No. 333‑124590, 333-145120, 333-161219, 333-176020, 333-198312, 333-222081) on Form S-8 and the registration statement (No. 333-163276) on Form S-3 of Commercial Vehicle Group, Inc. of our reports dated March 12, 2018,with respect to the consolidated balance sheets of Commercial Vehicle Group, Inc. as of December 31, 2017 and 2016, and the related consolidatedstatements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31,2017, and the related notes and financial statement schedule II: Valuation of Qualifying Accounts (collectively, the “consolidated financial statements”), andthe effectiveness of internal control over financial reporting as of December 31, 2017, which reports appear in the December 31, 2017 annual report on Form10‑K of Commercial Vehicle Group, Inc./s/ KPMG LLPColumbus, Ohio March 12, 2018Exhibit 31.1SECTION 302 CEO CERTIFICATIONI, Patrick E. Miller, certify that:1.I have reviewed this Form 10-K of Commercial Vehicle Group, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and we have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.March 12, 2018 /s/ Patrick E. Miller Patrick E. MillerChief Executive Officer(Principal Executive Officer)Exhibit 31.2SECTION 302 CFO CERTIFICATIONI, C. Timothy Trenary, certify that:1.I have reviewed this Form 10-K of Commercial Vehicle Group, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and we have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. March 12, 2018 /s/ C. Timothy Trenary C. Timothy TrenaryChief Financial Officer(Principal Financial Officer)Exhibit 32.1Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as AdoptedPursuant to Section 906 of the Sarbanes-Oxley Act of 2002I, Patrick E. Miller, President and CEO of Commercial Vehicle Group, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, that: (1)the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 containing the financial statements of the Company (the “PeriodicReport”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934(15 U.S.C. 78m or 78o(d)); and(2)the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Dated: March 12, 2018 /s/ Patrick E. Miller Patrick E. MillerChief Executive Officer(Principal Executive Officer)Exhibit 32.2Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as AdoptedPursuant to Section 906 of the Sarbanes-Oxley Act of 2002I, C. Timothy Trenary, Chief Financial Officer of Commercial Vehicle Group, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, that: (1)the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 containing the financial statements of the Company (the “PeriodicReport”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934(15 U.S.C. 78m or 78o(d)); and(2)the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Dated: March 12, 2018 /s/ C. Timothy Trenary C. Timothy TrenaryChief Financial Officer(Principal Financial Officer)

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