NEW ALBANY, Ohio, Commercial Vehicle Group, Inc. today reported revenues of $160.9 million for the third quarter ended September 30, 2007, compared to revenues of $235.8 million for the third quarter of 2006 and a net loss of $0.13 per diluted share, compared to $0.84 per diluted share in the prior-year quarter. Fully diluted earnings per share for the third quarter 2007 includes a noncash loss on the marking to market of forward foreign exchange contracts of approximately $4.5 million, or $0.13 per diluted share. Excluding this noncash impact of marking to market its forward foreign exchange contracts, fully diluted earnings per share for the third quarter ended September 30, 2007 was approximately break- even.
Net debt (calculated as total debt less cash and cash equivalents) improved to $123.7 million at September 30, 2007 when compared to $142.3 million at December 31, 2006. Fully diluted shares outstanding for the quarter were 21.4 million compared to 21.5 million in the prior-year quarter.
"While our construction market business remains strong on a global basis, our 2007 results continue to be impacted by the slow down and product content shift in the North American Class 8 heavy truck market," said Mervin Dunn, president and chief executive officer of Commercial Vehicle Group.
"Our third quarter results were generally in line with our expectations for the quarter and we have adjusted our estimates for the upcoming fourth quarter to reflect our new market outlook and operating estimates as well as the impact of our recent acquisition of PEKM, which we announced on October 1st. Like many industry analysts, we remain uncertain about the 2008 Class 8 production levels and, as a result, we are withdrawing our previous estimates until we can further determine what lies ahead for the Class 8 market in 2008. We expect to be able to finalize these estimates before the end of this year," Dunn said.
"We have taken numerous actions this year in order to adjust our business to the volatile market demands and we will continue to look for further cost savings opportunities as we remain focused on our growth strategy. Actions such as our recent acquisition of PEKM demonstrates our commitment to this strategy as PEKM compliments our existing products and processes and provides us with new customers, an expanded geographic footprint and diversification away from the cyclical North American heavy truck market. It is a perfect example of our continued focus on improving our position in the global marketplace," Dunn concluded.
The Company reported revenues of $518.3 million for the nine-month period ended September 30, 2007, down approximately 26.0 percent when compared to $700.0 million for the nine-month period ended September 30, 2006. Net income for the nine-month period was $0.05 million, or break-even on a per diluted share basis, compared to $46.9 million, or $2.18 per diluted share for the nine-month period ended September 30, 2006. Fully diluted shares outstanding for the nine-month period ended September 30, 2007 were 21.6 million compared to 21.5 million in the prior-year period.
The Company is adjusting its 2007 full year outlook for total North American Class 8 truck production levels to a range of 208 thousand to 215 thousand units, including approximately 60 thousand Mexico and export units. These estimates have been adjusted from the Company's previous estimates of 200 thousand to 225 thousand units, which included approximately 55 thousand Mexico and export units. Primarily as a result of these adjustments, as well as the inclusion of estimates for the acquisition of PEKM, the Company is adjusting its fully diluted earnings per share estimate to a range of $0.25 to $0.31 per diluted share, based on 21.6 million diluted shares and excluding the impact from marking to market its forward foreign exchange contracts during the third quarter 2007, which were not included in its previous estimates of $0.18 to $0.46 per diluted share. The impact of the noncash loss from the marking to market of forward foreign exchange contracts was approximately $0.13 per diluted share for the third quarter of 2007. Adjusting for this noncash loss provides an anticipated full year 2007 earnings per diluted share estimate in the range of $0.12 to $0.18.
"We are revising our 2007 estimates based on anticipated production levels and product content for the fourth quarter as well as expectations from our recent acquisition of PEKM," said Chad M. Utrup, chief financial officer of Commercial Vehicle Group. "Simply put, the lower end of our estimates for 2007 has increased by approximately $0.07 per diluted share. This is primarily a result of the anticipated increase in estimated Class 8 production units and a change in our estimated tax provision rate for the year, however, the noncash impact from marking to market our forward foreign currency contracts artificially camouflages this positive change," added Utrup.
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