CVG, a diversified industrial products and services company, today announced financial results for its fourth quarter and full year ended December 31, 2020.
Fourth Quarter 2020 Highlights (Compared with prior-year period, where comparisons are noted)
- Revenue of $216.0 million, up 14.0% due primarily to growth in warehouse automation.
- Operating Income of $5.0 million, up $9.3 million primarily due to higher volume and improved cost structure driven by cost reduction actions taken throughout 2020.
- Adjusted operating income of $8.3 million, up $9.6 million.
- Net loss of $4.1 million, or $(0.13) per share, an increase of $0.11 per share. Adjusted EPS is $(0.05) per share. Included in EPS and Adjusted EPS is a $(0.10) per share tax adjustment, primarily related to valuation allowance.
- Adjusted EBITDA of $13.0 million, up $9.4 million due to $26.5 million more revenues, lower costs and improved sales mix.
- North American MD/HD truck revenues declined $2.6 million which was offset by warehouse automation revenues growing to $34.4 million, with warehouse automation representing 15.9% of Company sales in the 4th quarter of 2020.
Full Year 2020 Highlights (Compared with prior-year period, where comparisons are noted)
- Revenue of $717.7 million, down 20.4% due primarily to the decline in the global commercial vehicle markets somewhat offset by growth in the warehouse automation business.
- Operating loss of $23.2 million primarily caused by the impact of the COVID-19 pandemic on the second quarter and $29.0 million goodwill impairment expense.
- Adjusted operating income of $23.9 million, down $20.6 million caused primarily by the decline in volume due to the COVID-19 pandemic.
- Net loss of $37.0 million, or $(1.20) per share, a decrease of $1.71 per share. Adjusted net loss of $1.7 million, or $(0.06) per share, a decrease of $0.73 per share.
- Adjusted EBITDA of $41.7 million, impacted by decline in truck and other end markets due to the COVID-19 pandemic, somewhat offset by improvements in cost structure and new business wins.
- The FSE acquisition, including warehouse automation, contributed $101.9 million in revenue in 2020 compared to $12.9 million in 2019.
- Estimated $100+ million of net annualized new business awarded to the company in 2020, driven by warehouse automation and electric vehicles.
Harold Bevis, President and Chief Executive Officer of CVG, gave an overview of the company’s results as follows. “Our business is healthy, growing and we are very optimistic about our future. However, we have been seriously impacted by COVID-19 and still have COVID-19 induced supply and cost risks in the business. We aggressively took advantage of this temporary business disruption to revamp our growth programs, our cost structure, and our operating footprint.
Our business goals are to secure new business in new areas, leverage our cost structure, improve our mix and operating margins, and pay down debt. We wish to decrease both our historical customer concentration as well as our industry concentration.
Our people goals are to make the planet a better place through our products and actions; employ a creative, diverse and inclusive workforce; go for it as a team; have fun and enjoy our business relationships. We are proud that we have a great team with many ideas, landed many new customers in exciting new areas in 2020, and generated a few new products.”
Chris Bohnert, Chief Financial Officer commented, “We delivered $216.0 million in sales in the quarter and $717.7 million for the full year 2020, with 2020 full year being down significantly from 2019. The full year and specifically the 2nd quarter were impacted significantly by COVID-19. Warehouse automation is one of our focused growth areas and our goal is to deliver more than $150 million of sales in 2021.”
Mr. Bevis continued, “The electric vehicle market is another focused growth area for the future, and the company is a development partner in several new electric vehicle startups. These programs are largely in development phase during 2021 and expected to turn into revenue in one to two years as we design, prototype, tool up and then produce at volume. In parallel, we are also upgrading our quality systems. We are investing in the electric vehicle market.
We have other new business awards in recreational vehicles, material handling equipment, boating, and mass transit. Net new business awards accumulated through 2020 are estimated to be $100+ million per year on an annualized basis, or about 15% of sales and were predominately in warehouse automation and electric vehicle markets. We are attempting to win the same amount of new business awards in 2021.
The growth of e-commerce is driving the need for additional warehouse automation. Industry expectations are for this growth to continue and we are seeing this in our business. We supply components for these warehouse installations, including complete work centers. In the fourth quarter, our sales in to the warehouse automation end market grew to $34.4 million in revenue as we ramped up new products and new capacity to support this business during 2020.
We expanded or repurposed space in four CVG plants in 2020 and we have a fifth plant conversion underway now. We have many global locations, so, we have the footprint to continue this expansion. We expect these volumes to continue to trend upward as we bring online new products, achieve new business awards, and deliver increased volumes on business we already have.”
Mr. Bevis concluded, “We are using our decades of know-how coupled with an entrepreneurial spirit to ‘Find a Way’ to deliver better results to our employees and shareholders. We are focused on making CVG a secular growth company and are on that path with much to do. COVID-19 hit us hard in 2020 and is truly still with us in certain ways. We sharpened our focus on new diversified revenue and are happy to report that 2020 was a good kick-start year. This is a multi-year effort and we are committed to making appropriate investments, led by a talented and unique team, and securing new business with differentiated products and services. We are optimistic about our future.”
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SOURCE: CVG
