Commercial Vehicle : Sidoti Microcap Virtual Investor Conference Presentation

SIDOTI VIRTUAL

MICROCAP

CONFERENCE

NOVEMBER 19, 2020

Forward-Looking Statements and Non-GAAP Financial Measures

These slides and our remarks during investor presentations about CVG's future expectations, plans and prospects are forward-

looking statements within the meaning of the federal securities laws. Forward-looking statements involve risks, uncertainties and other factors, including those discussed in our earnings press release dated November 9, 2020 and in our filings with the SEC, which could cause our actual results to differ materially from the results expressed or implied by our statements. Any forward-looking statements which we make in this presentation or in our remarks, represent our views only as of the date of such remarks. We disclaim any duty to update such forward-looking statements.

All forward-looking statements attributable to the company or persons acting on behalf of the company are expressly qualified in their entirety by cautionary statements in our filings with the SEC.

These slides also include and we plan to discuss supplementary non-GAAP financial measures. For a reconciliation of GAAP to non- GAAP measures and the reasons for management's use of non-GAAP measures, please see supplemental information.

2

MANAGEMENT IN ATTENDANCE TODAY

Harold Bevis

Mr. Bevis has been President and Chief Executive Officer

since March 2020 and has served as Director since June 2014. Mr. Bevis brings more than 30 years of business leadership experience including 19 years as a Chief Executive Officer. Mr. Bevis holds an MBA from Columbia Business School and a BS in industrial engineering from Iowa State University.

Chris Bohnert

Mr. Bohnert has been Chief Financial Officersince October 2020. Mr. Bohnert brings more than 30 years of experience in consumer products, packaging, biotechnology, and food ingredients. Mr. Bohnert has degrees in Economics and Accounting from the University of Missouri and a Master's in Accounting from the University of South Carolina.

3

COMPANYAT A GLANCE

CVG - A DIVERSIFIED INDUSTRIAL COMPANY

$502M	Founded in 2000	~7,500 Employees
2020 9mos. YTD Revenues	Listed on NASDAQ in 2004	Depending on flex requirements

		Global Footprint
$29M	$25M	40 plants/locations and 26
2020 9mos.YTD Adjusted EBIDA	2020 9mos. YTD Free Cash Flow	geographies within North
America, Europe, and Asia

4

INVESTMENT HIGHLIGHTS

L E A DING S UP P LIER OF E L E C TRICAL W I RE HA R NE SS ES, S E ATING S YS T EMS , E NGI NE ERED P L A S TIC C OMP ONE NTS, A ND E L E CTR OMECHA NICAL A S S E MBLIES

Pivoting the company for	Leading supplier to
growth by optimizing the core	sophisticated global equipment
and diversifying products and	manufacturers and category
capabilities	leaders

Expanding into

new and adjacent markets to leverage know-how,improve margins, and diversify products

Optimizing support structure, making core business leaner,

and driving new business wins where innovation and engineering expertise can add value

5

LOCATIONS

GLOBAL FOOTPRINT

Seats

Harness

Warehouse Sub Assemblies

Structures

Plastics

Wipers

6

Q3 2020 WAS A GOOD QUARTER

• Down 17% vs. prior year
• Up 48% vs. prior quarter
• Commercial vehicle markets recovered sequentially, but below 2019
• Warehouse automation market continues to be a bright spot​
• Down $0.4 million vs. prior year
• Adjusted margins increased to 6.4% from 5.5% vs. prior year
• Adjusted operating income increased sequentially by $15.6 million
• Adjusted EBITDA increased slightly to $16.4 million vs. $16.3 million, on $38 million less sales

• Free Cash Flow generation of $9 million in Q3

• Paid down an additional $20 million of debt
• Funded $6 million CapEx Q3 year to date with

outlook of $8 to $10 million

7

Q3 2 0 2 0

SALES MIX IS TURNING THE CORNER

Strategic focus areas:

• Warehouse automation systems
• Delivery vans and Class 5-7 trucks
• Electric vehicles
• Alternate markets for plastic parts and wire harness

CVG's approximate percentage of sales from

Medium-duty and Heavy-duty trucks

2009-2019	2020
10 year average	Q3 YTD

8

Q3 2 0 2 0

TRUCK MARKETS IMPROVED SUBSTANTIALLY

e-Commerce Growth and GDP Outlook Driving Favorable Truck Outlook;

EV Substitution will Occur in Future Periods

*Source: October 2020 ACT Research Report	9

STRATEGIC OBJECTIVES-REVENUE GROWTH

Lead in core markets

Right-size cost structure, increase new product and innovation rate, pursue new customers, and reposition footprint. These are a mix of short-cycle and long-cycle initiatives.

Leverage strengths into new

markets

Add new people, add new capabilities where needed, pursue brand-new markets, pursue brand- new customers, and implement brand-new marketing programs. These are a mix of short-cycle and long-cycle initiatives.

Grow in Electric Vehicle market

Add new people, pursue new customers, bundle CVG offering where possible, and adjust footprint. These are largely long-cycle initiatives.

Grow in Warehouse Automation

market

Add new people, expand capacity dedicated to this area, and expand product offering. These are largely short-cycle initiatives.

10

Q3 2 0 2 0

STRATEGICALLY ADDED CAPACITY AND EXPANDED PRODUCT LINE IN THE WAREHOUSE AUTOMATION BUSINESS

PLANTS	•	Expanded capacity at 4 plants
	•	Evaluating next steps for additional capacity

PEOPLE

PRODUCTS

• Added dedicated resources in business leadership, procurement
• Staffed up hourly production personnel ~ 100 people
• Added brand new products in portfolio
• Evaluating further product line additions

*

*Source: RoboticsBusinessReview.com	11

Q3 2 0 2 0

WAREHOUSE AUTOMATION

SUBASSEMBLIES

• Complicated subassemblies used in warehouse systems; multiple units in each warehouse
• Each warehouse implementation is unique
• Top 100 retailers, top shippers, top ecommerce companies

12

Q3 2 0 2 0

FOCUS ON SECURING PLATFORM

POSITIONS ON ELECTRIC VEHICLES

• Secured 2 marquee Electric Vehicle contingent awards in 2020 with >$200 million of business potential, with future start dates
• Secured 3 smaller Electric Vehicle contingent awards in 2020 with future start dates
• Pending business opportunities with multiple other Electric Vehicle companies
• Securing positions across the vehicle size spectrum - delivery vans, long-haul trucks, and special purpose vehicles

13

UNIQUE ELECTRIC VEHICLE

VALUE PROPOSITION

Brand Recognition, Existing

Certifications

Product Development Capabilities

Speed to Market

Bundled Sourcing Opportunity

Manufacturing Technologies

14

ENTERING NEW END MARKETS - INJECTION MOLDING AND W IRE HARNESSES

• Decades of experience in demanding applications serving a very discriminating customer base
• • Near perfect quality and on-time delivery
• Design, manufacturing and post-processing value added assemblies
• Wide spectrum of machine capabilities with redundant machine and plant backup
• Sophisticated aesthetics, material selection, part performance and cost optimization

• Decades of experience in demanding application service a very discriminating customer base
• • Near perfect quality and on-time delivery
• IoT digital business process from design to component selection to assembly
• Combination of low-cost country plants and quick service plants
• Climb the aggregation scale from harnesses to ECMs to complete subassemblies

15

Q3 2020 KEY TAKEAWAYS

MARKETS PERFORMED WELL

-- OLD AND NEW --

• Truck markets recovered
• Warehouse automation stayed strong

GROWTH ACTIONS

WORKING WELL

• Focused on growth markets, less cyclicality
• Adding people, capacity, products, customers
• Added another marquee Electric Vehicle customer

COST REDUCTIONS WERE AGGRESSIVE AND WORKED

• Salaried/benefit/discretionary expenses suppressed, restoring some costs in Q4/Q1
• Permanent reductions still underway

COVID STILL A CONCERN

• Cases are increasing rapidly in some countries
• Supply chains in the industries we serve are having issues

16

Q3 2020

FINANCIAL UPDATE

17

Q3 2 0 2 0

CVG CONSOLIDATED FINANCIALS

$ MILLIONS, EXCEPT PER SHARE DATA

	Q3 2020	Q2 2020	Q3 2019
Revenue	187.7	126.9	225.4
Gross Profit	24.2	6.5	29.4
Gross Margin	12.9%	5.1%	13.1%
SGA	14.4	16.0	17.5
Amortization	0.9	0.9	0.4
Impairment	-	0.2	-
Operating (Loss)/Income	8.9	(10.5)	11.5
Operating Margin	4.7%	(8.3)%	5.1%
Diluted Earnings Per Share	$0.13	($0.40)	$0.23
Adjusted Operating (Loss)/Income*	$12.0	(3.6)	12.4
Adjusted Operating Margin*	6.4%	(2.8)%	5.5%
Adjusted EBITDA*	$16.4	1.2	16.3
Adjusted EBITDA Margin*	8.8%	1.0%	7.3%

Q3 2020 NOTES

• The P&L benefited in Q3 from revenue rebound, year over year impact of FSE acquisition, and cost actions
• Revenues increased 47.9% vs. Q2
• Adjusted OI and Adjusted EBITDA increased as a percent of revenue compared to prior year

*See reconciliation to non-GAAP financial measures in the appendix	18

Q3 2 0 2 0

ELECTRICAL SYSTEMS SEGMENT RESULTS

$ MILLIONS

	Q3 2020	Q2 2020	Q3 2019
Revenue	121.1	74.2	131.4
Gross Profit	16.1	1.1	17.1
Gross Margin	13.3%	1.5%	13.0%
SGA	3.2	6.6	4.0
Amortization	0.7	0.7	0.3
Operating (Loss)/Income	12.2	(6.2)	12.8
Operating Margin	10.1%	(8.3)%	9.7%
Adjusted Operating (Loss)/Income*	13.4	(0.7)	12.8
Adjusted Operating Margin*	11.1%	(1.0)%	9.7%

Q3 2020 NOTES

• Revenue increased 63.2% vs. Q2 due to increased truck build and year over year impact of FSE acquisition
• Gross margin and Adjusted OI increased as a percent of revenue vs. prior year
• Warehouse automation sub- systems contributed $26 million of incremental revenue in Q3

*See reconciliation to non-GAAP financial measures in the appendix	19

Q3 2 0 2 0

GLOBAL SEATING SEGMENT RESULTS

$ MILLIONS

	Q3 2020	Q2 2020	Q3 2019
Revenue	68.9	53.9	95.7
Gross Profit	8.4	5.3	12.3
Gross Margin	12.2%	9.9%	12.9%
SGA	3.5	3.7	5.0
Amortization	0.1	0.1	0.1
Operating Income	4.8	1.5	7.2
Operating Margin	6.9%	2.8%	7.5%
Adjusted Operating Income*	5.1	2.1	7.2
Adjusted Operating Margin*	7.4%	3.9%	7.5%

Q3 2020 NOTES

• Revenue increased 27.8% vs. Q2 due to increased truck build
• Adjusted OI increased 142.8% vs. Q2
• Adjusted OI as a percent of revenue flat vs. prior year despite $26.8M revenue decline

*See reconciliation to non-GAAP financial measures in the appendix	20

Q3 2 0 2 0

BALANCE SHEET

$ MILLIONS

	September 30, 2020	June 30, 2020
Cash	53.6	63.4
Accounts Receivable	128.6	102.8
Inventories	83.3	70.7
Other Assets	161.6	164.1
Total Assets	427.1	401.0
Accounts Payable	89.4	54.6
Debt (Current + Long Term)	150.4	154.2
Line of Credit	-	15.0
Other Liabilities	92.0	89.4
Total Liabilities	331.8	313.1
Total Equity	95.3	87.9
Total Liabilities + Equity	427.1	401.0

Q3 2020 NOTES

• Cash and available liquidity at September 30, 2020 was $126.2M
• Paid down $15M on the ABL and an additional $5 million on the term loan

21

SUPPLEMENTAL

INFORMATION

22

Q3 2 0 2 0

USE OF NON-GAAP

FINANCIAL MEASURES

This earnings presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company's multi-year

corporate activities; or (ii) relate to activities or actions that may have occurred over multiple

or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate the Company's performance, engage in financial and

operational planning and to determine incentive compensation.

Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company's financial and operating results and in comparing the Company's performance to that of its

competitors and to comparable reporting periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. The financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth in the supplemental information.

23

Q3 2 0 2 0

RECONCILIATION OF GAAP TO NON- GAAP FINANCIAL MEASURES - ADJUSTED OPERATING INCOME AND EBITDA

	For the Three Months Ended
	September 30, 2020	June 30, 2020	September 30, 2019
Operating Income/(Loss)
8.9	(10.5)	11.5
FSE Acquisition Costs	-	-	0.9
Deferred Consideration Purchase Accounting	0.5	3.5	-
Restructuring	2.2	2.9	-
Investigation	0.5	0.4	-
Impairment of Goodwill and Long-Lived Assets	-	0.2	-
Adjusted Operating Income/(Loss)	12.0	(3.6)	12.4
% of Revenues	6.4%	(2.8%)	5.5%
Interest Expense	5.5	5.3	3.9
Other (Income) / Expense	0.2	(0.2)	(0.1)
Adjusted Income/(Loss) Before Provision for Income Taxes	6.4	(8.7)	8.6
Adjusted Provision/(Benefit) for Income Taxes	(0.2)	(1.4)	0.7
Adjusted Net Income/(Loss)	6.5	(7.3)	7.9
Adjusted Basic and Diluted EPS	0.21	(0.24)	0.26
Adjusted Net Income/(Loss)	6.5	(7.3)	7.9
Interest Expense	5.5	5.3	3.9
Adjusted (Benefit) Provision for Income Taxes	(0.2)	(1.4)	0.7
Depreciation Expense	3.8	3.7	3.4
Amortization Expense	0.9	0.9	0.4
Adjusted EBITDA	16.4	1.2	16.3
% of Revenues	8.8%	1.0%	7.3%

24

Q3 2 0 2 0

RECONCILIATION OF GAAP TO NON- GAAP FINANCIAL MEASURES - ADJUSTED EBITDA

			For the three months ended
	March 31,	June 30,	September	December	March 31,	June 30,	September
	2019	2019	30, 2019	31, 2019	2020	2020	30, 2020
Net Income	10.0	6.1	7.2	(7.5)	(24.6)	(12.5)	4.2
Interest	4.6	4.8	3.9	3.6	4.6	5.3	5.5
Provision for Income Taxes	3.2	2.2	0.5	(0.1)	(7.3)	(3.1)	(1.0)
Depreciation	3.4	3.0	3.4	3.8	3.8	3.7	3.8
Amortization	0.3	0.3	0.4	0.9	0.9	0.9	0.9
Impairment	-	-	-	-	28.9	0.2	-
EBITDA	21.4	16.5	15.4	0.6	6.2	(5.6)	13.3
Adjustments
CEO Transition	-	-	-	-	2.3	-	-
Restructuring	-	-	-	3.0	0.2	2.9	2.2
Investigation	-	-	-	-	2.4	0.4	0.5
FSE Acquisition Costs	-	-	0.9	-	-	-	-
Deferred Consideration
Purchase Accounting	-	-	-	-	-	3.5	0.5
Non-Cash Pension Charge	-	2.5	-	-	-	-	-
Adjusted EBITDA	21.4	19.0	16.3	3.6	11.0	1.2	16.4

Trailing twelve months

September	September
30, 2020	30, 2019
(40.4)	31.4
19.0	18.4
(11.5)	6.3
15.0	13.1
3.4	1.4
29.0	-

14.570.5

2.3-

8.2-

3.3-

• 0.9

4.0

-

--

32.371.4

25

Q3 2 0 2 0

BUSINESS SEGMENT FINANCIAL

INFORMATION

		For the three months ended September 30, 2020
	Electrical			Global		Corporate	Total
	Systems			Seating
Operating (Loss) Income	12.2	4.8	(8.1)			8.9
Restructuring	0.7	0.3	1.1			2.2
Deferred Consideration
Purchase Accounting	0.5	-	-			0.5
Investigation	-	-	0.5			0.5

Adjusted Operating Income	13.4	5.1	(6.5)	12.0
Adjusted Operating Margin	11.1%	7.4%		6.4%

26

Q3 2 0 2 0

FREE CASH FLOW

For 4 the quarters ended

December		March 31,		June 30,		September
31, 2019	2020	2020	30, 2020

Cash Flow from Operations

8.2

10.3

10.1

10.4

Capital Expenditures	(5.2)	(3.4)	(1.0)	(1.5)
Free Cash Flow	3.0	6.9	9.1	8.9

27