Thank you, Amy, and welcome to our conference call. Joining me on the call today are Harold Bevis, President and Chief Executive Officer of Commercial Vehicle Group; and Ed Carney, Interim Chief Financial Officer and Treasurer.

They will provide a brief company update as well as commentary regarding our second quarter 2020 financial results. We will then open up the call for questions.

This conference call is being webcast and a supplemental earnings presentation is available on our website, both may contain forward-looking statements, including, but not limited to, expectations for future periods regarding market trends, cost-saving initiatives and new product initiatives, among others. Actual results may differ from anticipated results because of certain risks and uncertainties.

These risks and uncertainties may include, but are not limited to, economic conditions in the markets in which CVG operates, fluctuations in the production volumes of vehicles for which CVG is a supplier, financial covenant compliance and liquidity, risks associated with conducting business in foreign countries and currencies and other risks as detailed in our SEC filings. I will now turn the call over to Harold Bevis to provide a company update.

Thank you, Kirk, and thank you to everyone for joining the call today. Ed and I are going to refer to the earnings deck that's available on our website as we speak this morning and bring our result to life a little bit.

And I'm referring right now some of my comments to Page 3 in that deck. I'm proud that our global team responded appropriately during this downturn and delivered positive EBITDA of a little over $1 million and generated cash of a little over $9 million despite a 48% decline in revenue.

We were able to offset some of that margin hit with a very aggressive and comprehensive set of cost-outs, which I'm going to elaborate on in a couple of pages, of which $8 million showed up in the quarter and a larger amount on a full year annualized basis. It was a combination of permanent and short-term actions and included corporate overhead reductions, plant overhead reductions, footprint consolidation as well as additional actions on discretionary spending.

We also offset some multimillion-dollar impacts that are in that $1 million of EBITDA and $9 million of cash. As you would expect in an abrupt downturn like this, we did have overhead absorption issues in the plants.

We had excess inventory calculations that we needed to absorb. We had COVID-related absences.

We had temporary closures of our facilities. We reconfigured our offices in our 25 plants to add barriers and create social distancing for our approximately 7,000 employees.

It's a lot of work. We're happy to say that our core markets are now in recovery mode.

At the bottom of Page 3 is the ACT research report and the outlook for our core market, about 35% of our revenue is North America truck. That's always been the heartbeat of our company.

And when that market took a dive in the second quarter, it affected us. And we're happy that, that was -- that abnormal and unnatural level of truck building is behind us, and we have quite significant increases underway as we speak.

We're feeling them. Our internal results are consistent with these outlooks.

And the heavy-duty truck build market is expected to increase 50% in the quarter that we're in and medium duty, 30%. So turning to Page 4.

I'd like to elaborate a little bit on the comprehensive actions that we took. We have several actions in process, and we completed some actions in the quarter.

We did use the opportunity of light demand to initiate an aggressive consolidation and repurposing of 13 of our facilities. We have 25 facilities, so it was roughly half of the facilities that we went after here to optimize and reposition.

We were able to achieve a $14 million inventory reduction in the quarter as well, primarily by attacking procurement activities as our consumption and production rates were much lighter than we expected. We rightsized our staff and SG&A as well as the plants, and we rightsized our material order quantities be consistent with the amount of production that we had.

And we reset our discretionary spending decisions in travel, marketing and other discretionary areas. We have improvements that are still underway that are not in our reported numbers here.

We have consolidations that are underway, and we have some additional headcount actions that are forthcoming. So we have a full complement of actions that are very aggressive.

Third point I want to make is that we did not rate our future. We kept going with the growth initiatives that we have underway.

And we had some strong wins in the quarter. They're private.

We can't say who the customers are, we're covered by NDA, but they're significant. And we had over $100 million of new business that's in its final stages now, one with an electric vehicle customer, one with a warehouse automation customer, and I'm going to touch on both of them in a couple of slides.

We are aggressively adding people and capacity to support these growth initiatives and add to our heritage of commercial vehicle part making. And on Page 4, just to take you quick on the actions that are in process, we're consolidating and repurposing 12 facilities, rightsizing our salaried staff and discretionary spending.

We're hiring new leaders with knowledge of new markets. We're redesigning our supply chains to be more lean, and we have a strict management of working capital underway that's continuing.

Turning to Page 5. Another positive point is that there's a multiyear recovery expected in commercial vehicle production.

This is, again, as an ACT Research report that we're referring to. And our customer dialogues are consistent with these outlooks.

There is an expectation to recover back to pre-COVID levels. And we will be recovering back to those levels with a lower cost structure.

We've permanently lowered the breakeven point of this company and our cost structure, and we do expect to have better margins as this unfolds. Additionally, we do expect to have additional revenue from the new business wins beginning in the fourth quarter of this year.

Turning to Page 6. We are aggressively trying to change in certain areas.

We're very proud of our part of making heritage for commercial vehicles, and we continue to remain a leader in those areas and they're core to what we do, but we are trying to add significantly to the revenue profile and our profit rates going forward. Three main areas are really leadership, innovation and new markets.

We are supplementing the strong team that we have here with new people that have knowledge of alternate markets, and we're kickstarting an innovation program to be much more aggressive in new product introduction across all our divisions and we are explicitly entering new markets, again, by repurposing a portion of our manufacturing capacity and adding leaders who understand these markets and have them be the tip of the spear for us as we enter in and choose correctly and target correctly. Page 7, we are pivoting the company towards these new markets, tilting towards these new markets.

And there's 3 parts to it: there's optimizing the financial performance of the business that we have; number two 2 is adding new people and growing outside of our traditional markets; and number three is building on the strong momentum that we already have. The FSE acquisition was a really good one.

We got a great team there, and we got a lot of new customers that add to our customer roster and completely new product set. Assembly of high-speed automation equipment for warehouses as well as military equipment.

And there's a little graphic on the bottom of Page 7 of what we're trying to do. We want to maintain our business and our shares that we have in our traditional markets and grow disproportionately in the new targeted markets that we have.

Page 8. We do have a multi-period reposition of our footprint underway, and this is just a graphic to show you what we're doing.

We're implementing a set of actions that's involving many, many people. I won't take you through the different plant agendas, but we are repositioning factories in 3 countries: China, Mexico and the United States.

We are adding dedicated floor space to make new products. We are consolidating production to lower our cost points and mature product areas, and we're consolidating where we've made a determination that we have excess cost and excess space.

We expect to generate an ability to support another $100 million to $150 million of new business in our targeted markets, mix dependent. That's a big range because the mix and the size of these products is quite different and unique.

Additionally, we do -- we are targeting to lower our cost by $4 million to $6 million as we go through this repositioning. On Page 9, I want to talk a minute about the fast-growing e-commerce and last-mile delivery market.

We had our first big win in this market with our Unity seat. You see a little picture here where you have a global platform we're rolling out across our seat factories, and we're absolutely trying to penetrate the medium-duty commercial vehicle market.

As you know, trucks are delineated by the tonnage they can carry. And the medium-duty product lines and medium-duty trucking is growing nicely around the world and it's driven in many cases by e-commerce and last-mile delivery.

They're also coupled with the trends away from combustion engines to electric vehicle propulsion. And in this quarter, we had a big seating win with a company that's focused on using electric vehicles for last-mile delivery.

Once again, we're not at liberty to say who that company is through the privacy agreements that we've agreed to, but it's someone that you would be happy that has entered into our customer roster. This is a growing market.

The e-commerce market, as we all know, is growing rapidly, especially boosted a little bit during the coronavirus as people have stayed at home and huddled at home and ordered more online than it was expected even. Page 10, just a little bit more about our growing warehouse automation business.

This was a key reason why we went out looking for FSE, First Source Electronics. And we are leveraging their know-how and relationships.

We've brought into play 3 other factories within Commercial Vehicle Group to make their products, so in the quarter just ended, we expanded from 1 facility to 4, and it gave us a bigger footprint to accommodate a growth with the customers they had as well as new customers. And this market is absolutely central to what we are trying to be and add to our Commercial Vehicle heritage.

This business is growing nicely. It's expected to grow to $27 billion, and we are a central player in this business right now.

Page 11. We are absolutely navigating near-term market disruption.

This has been very disruptive. What's happened in our traditional markets, our customers abruptly closed down their factories.

Given that we are a JIT supplier to them, we abruptly shut down as well. Then they restarted, then we had to rehire.

We previously put out an 8-K that we had to lay off 5,250 people when this happened. We've now rehired over 4,000 of them.

So it was an abrupt layoff, furloughs, closures, restart, rehire that we've been through. It's behind us now.

It happened during the quarter. It happened in April mainly.

But right now, we are experience -- the ACT forecast that we've seen, we're experiencing that kind of growth back as well. We continue to invest right through here with long-term investments in hiring people.

You can see a graphic medical housings to add to our plastic parts business warehousing equipment and designing of new products. These are the pictures here.

Page 12. Just to recap it a little bit on the 4 focus areas that we have underway to pivot and change the company's profile.

Number one is to optimize the core business. That's cost, that's working capital, that's on-time delivery, that's quality.

We also have a really special aftermarket business that we're differentially focused on now to grow. And then there's -- we have a new look that we're taking at certain business that's never made much money for us and making new decisions.

I've spoken about the electric vehicle market a little bit. Each of our businesses is trying to win in this market, electrical vehicle market.

The warehouse automation business, led by the FSE team and now supplemented by other Commercial Vehicle Group team is leading to a major charge into that market and where we have excellent customer references, and the e-commerce business is absolutely exploding in -- the delivery business through Internet ordering is unbelievably growing. So we're very happy to have a footprint in there.

And then new markets altogether. So we have great equipment, great people that know what they're doing, and we're repurposing a big portion of our capabilities to be able to grow in these new markets with new customers and new products.

So Page 13. We're embracing new, we're embracing who we are.

And really, today, our heartbeat is all about commercial vehicles. We're proud of that.

We're adding new approaches, new direction and new decisions to add to it and warehousing, electric vehicles and new markets on top of it. So all in all, the quarter was a tough one, really, tough one, really hard on a lot of our employees.

The temporary actions we had to take, the layoffs we had to do, the shutdowns we had to go through, the people that got sick with coronavirus themselves, it was a tough quarter but we're through it. Coronavirus is still here.

We're set up to deal with it in our factories and in our offices, and we're working through it and attacking these new areas. So with that, I'd like to turn it over to Ed Carney.

Ed joined during the quarter. I was thankful that Ed joined.

He's our Interim Chief Financial Officer. We've put out an announcement on that, been working hand-in-hand going through this quarter.

And Ed, if you could take it from here, please.

Thank you, Harold, and thank you to everyone who's in on the call today. I'm on Page 15 now.

Second quarter 2020 revenues were $126.9 million compared to $243.2 million in the prior year period, a decrease of 47.8%. The decrease in revenues reflects the sharp declines in sales due to the COVID-19 pandemic and market declines and more specifically lower heavy-duty truck production in North America and in the global construction markets we serve, partially offset by an increase in industrial and military revenues, primarily attributable to the FSE business.

The company reported a consolidated operating loss of $10.5 million for the second quarter of 2020 compared to operating income of $15.9 million in the prior year period. The operating loss is primarily attributable to lower sales volume and second quarter special charges, the majority of which are in the SG&A line item.

The second quarter 2020 adjusted operating loss was $3.6 million when excluding these special charges. As Harold mentioned, the impact of the decline in sales was partially offset by successful cost-reduction initiatives.

Net loss was $12.5 million for the second quarter of 2020 or $0.40 per diluted share compared to net income of $6.1 million in the prior year period or $0.20 per diluted share. As a final note, we achieved a positive EBITDA of $1.2 million in the quarter, which are the result of a global team effort to offset the challenging market conditions we faced.

Turning to our segment results. For the second quarter of 2020, on Page 16, Electrical Systems revenues were $74.2 million compared to $141.9 million in the prior year period.

This decrease primarily resulted from the sharp declines in sales due to the COVID-19 pandemic and market declines and more specifically from lower heavy truck production in North America and in the global construction markets we serve, partially offset by an increase in industrial and military revenues, primarily attributable to the FSE business. The Electrical Systems Segment reported an operating loss of $6.2 million in the second quarter of 2020 compared to operating income of $13.9 million in the prior year period.

The operating loss is primarily attributable to lower sales volume and the second quarter results include special charges, which are mainly in the SG&A line. The second quarter of 2020 adjusted operating loss was $0.7 million when excluding these special charges.

Moving on to Slide 17 in the Global Seating Segment. Revenues declined to $53.9 million in the second quarter of 2020 compared to $105.3 million in the prior year period, primarily resulting from the sharp declines in sales due to the COVID-19 pandemic and market declines and more specifically lower heavy-duty truck production in North America and in the global construction markets we serve.

The Global Seating Segment reported an operating income of $1.5 million during the second quarter of 2020 compared to operating income of $9.4 million in the prior year period. The decrease in operating income was primarily attributable to lower sales volume, and the second quarter results included special charges associated with ongoing restructuring initiatives.

Second quarter 2020 adjusted operating income was $2.1 million when excluding special charges.; If you're following along with me, please turn to Page 18 in the deck. At June 30, 2020, the company had liquidity of $106.6 million, which is made up of $63.4 million of cash and $43.2 million of availability from the revolving credit facility.

This concludes our prepared remarks. I will now turn it over to Amy for Q&A.

This is Jacob Parsons [ph] on the line for Mike Shlisky this morning. My first question has to deal with your new electric vehicle arrangement, would you say, is that with a currently major existing truck provider?

Or is it one of the newer start-ups that's kind of up and coming on the horizon?

Good question, Jason Jacob. This is Harold.

It is a new customer, one of the start-ups.

Okay. Is there any more information, geography, where they're based out of?

Or is that all you're really allowed to say?

I can tell you that they're North America based, but they have global aspirations. Most of the start-ups that we're working with have similar aspirations, and they're a big one, big new customer for us.

All right. And kind of going off that, within your new electrical vehicle arrangement, the final mile vehicles, they have a lot of stopping and starting and the driver gets in and out of the truck many times throughout the day.

Does your seat have some type of custom design that differs significantly from the like longer-haul trucks? Or are you able to serve this new customer with one of your existing seat models?

It's a good question. So you're getting into the product design, and we had a clever design.

Our Unity seat is copyable, if you will, but we're protecting our know-how as best we can. We had a unique design.

And our Unity seat is modular so that we can use low-cost country parts, for instance, India, and other low-cost countries as well as high-end, high-performance parts. And the seats themselves in these last-mile delivery vehicles, the driver seat is really important.

It's differentially important. So generally, they're looking for kind of a cheap passenger seat but a really good driver seat, because to your point, they're in and out, in and out, in and out in hot weather, in cold weather, bumpy roads, starts and stops.

And so we did, in fact, have a very unique suspension system for this to accommodate environmental control, heating cooling as well as the comfort and safety of the driver getting in and out of the vehicle multiple times a day. These new start-ups, as you know, have tricked out ideas for integration of information through the vehicle with cameras and feedback, productivity monitoring of the drivers' delivery routes.

And so we tie into all of that in the vehicle.

Got you. Got you.

That's awesome. And I do have some questions, if I might, related to your kind of restructuring plans, do you have any more information regarding like the upfront cost of the restructuring plans?

Like how much cash -- how much is cash, how much is like noncash? And how soon should we start to -- start seeing the benefits of the restricting and cost cutting?

And if you could answer, at what point do you expect the full run rate to be achieved?

Yes. I'm not dodging your question.

Kirk, do we -- did we summarize it?

Yes. Can I refer to you?

And I know we just issued this morning, but right in our 10-Q, Jacob, we do highlight the range of costs that we plan to incur around the restructuring items, and that's $8 million to $12 million. We started these initiatives in the fourth quarter, so before COVID, because of anticipated just market declines, if you recall, 2018 and '19 were really high truck build years.

And so we were anticipating a return to more normal levels and started restructuring at that point. To your question about will be -- when will we start to see it?

We are starting to do it because we started it in the fourth quarter. By and large, most of them are cash costs.

And the -- we plan to basically be there or thereabouts as we get into next year.

Yes. I would tag team with Kirk and say our internal plans are to be done with our new initiatives that we started as well as the ones that were started previously by the end of this year and the biggest expenditure is severance.

And yes, so we're underway with it right now. So the cash use, the cash severances, a lot of them have already happened, and they were already happened in Q2 and our cash flow is positive on top of that, so we funded that.

Got you. Do you have time for one more?

Sure. Go ahead.

That would be awesome. So in your press release, I noticed that you had mentioned there was about $15 million or more of restructuring-related savings how high bulk of that $15 million go?

Is there like a ballpark number? And what might be the key variables that would ultimately drive the cost reduction you reach?

The reason why we came out with that number is we are adding back, too. So we are adding back.

So the net cost out is a higher number, okay? But we are adding new executives here.

We're actively recruiting for senior-level executives and mid-level and entry-level salespeople that have knowledge and relationships of the customers and the product requirements and the service requirements of the new customers that we're targeting. So I think $15 million is what you should expect from us because we'd really like to add back into our growth initiatives behind that.

Just going through some of your comments already. Can you add some additional color on kind of what you saw in the quarter on a month-on-month sequential basis?

I did some back-of-the-napkin work, and it seems to be, if we look at prior ACT Research guidance, we're outpacing their prior guidance, perhaps moving to a U shape like recovery. Just how are you characterizing the recent improvement?

And I know there's guidance on Q4 -- Q3 directionally. But perhaps what you're seeing for the balance of the year, what kind of scenarios are you evaluating currently?

Sure. So as we mentioned about half of our business globally is tied into truck seats, but we also have a big part tied into construction equipment.

And we are -- have an automotive business in Europe. And so it gets down to the platforms that you're on and how they're doing, but with regards to the first question you asked on monthly experience, our monthly experience was similar to the monthly results posted by ACT.

Our platforms kind of mirror the market basket that's out there. We have some newer ones and some older ones and we mirrored it.

We went down hot definitely in Mexico. Our big customers were initially not deemed to be essential.

We went down full order books, mandated by the Federal Government of Mexico to shut down. And we have over 2,000 employees there.

We have 5 main factories there and we have full order books, and we were prohibited from making products. So we have a little bit of a catch-up scenario on top of market recovery.

So we have a double thing going on at the moment. We expect that -- we expect to get caught up there.

We're avoiding the working of overtime. We're avoiding expedited material in and out.

We're staying disciplined with our cost structures. Our agreements generally don't allow us to pass that through, and therefore, we're not doing it unless we have explicit customer agreement.

So we're getting caught up a little bit. And then we flat out have recovered truck order books.

So e-commerce has continued. Trucks are rolling.

There's still a natural replacement rate for trucks out there 200,000 to 220,000 trucks needed just to replace retired vehicles. We're still below that.

And a question that hasn't been asked is what's happening in your aftermarket business during this, our aftermarket business was down also but not down as much and it's come back pretty good, stronger than expected because people are stretching it a little bit. So our outlook, we're adhering to the ACT outlook.

That's the only third party we can refer to. If there was one in commercial vehicles, we would refer to it, but there isn't one really.

But we're tied into the big guys. We are seeing strength.

And then we have our new wins that are tied into the e-commerce people that you know. And so it's growing quite strongly right now, and we're trying to get caught up with them, and they have some recovery they're going through as well.

They got a bit behind with the curtailment of building activity that was mandated due to coronavirus safety requirements. And then there's just flat out growth happening in that area.

So we have a good outlook. The only thing that's happening is the seasonal end of the year.

That always happens in Q4 and you can see it in the ACT information. So we don't want to be too bold knowing the timing of the end of the year.

And then you have what's happening right now with back to school and what's going to happen with coronavirus. So we see strong order books consistent with third-party data, we're nervous about coronavirus and its impact on business in general in the countries that we're in.

And we have the end of the year seasonal slowdown that traditionally happens. Will it happen this year or not?

Not sure. It's going to really depend on what happens with coronavirus and our ability to work.

That's great. Great color.

I appreciate it. My next question or should I say series of questions, the new e-commerce last-mile win.

I know you can't provide the name or specific geographic location, but perhaps some insight into does this include entire penetration of the fleet? Is there more room for growth within this existing customer?

And kind of how it all came about and what you see competitively for these types of wins. Was this a win?

Was this a bidding situation beat out in other clients? Or were you the only player so forth?

Yes. Good.

So just to give you a little bit of a picture, it's a bundled win for us. So it's a seat, it has plastic parts and it's got a little wiring harness in it, too.

So we were a unique bidder and that we could handle everything needed in the seat, connecting to the vehicle electrically and the data, the plastic parts needed to -- for housing and the seat itself, which is needed for functional heating, cooling, safety and driver features. So it was a competition, absolutely.

And in this smaller truck arena, some automotive kind of people try to go up the value-add chain into this type of suspension systems and so we do see that. Generally speaking, they can't get there.

They don't like the low volumes of trucking and they don't have the suspension know-how. They're used to making a $60 seat, not a $700 seat.

So there's a know-how differential as well as operational capability to serve. Globally, there are 6 to 8 players surging, 6 to 8.

We're tracking all of them, we're tracking all of them. So our goal is to win with that global set.

So the electric vehicle names in Japan and China, Korea are different than the ones here in the United States and the ones in the U.S. are different as well.

So they're unique. They're funded sometimes by some of the main players, but they're their own companies.

And then you have -- some of our traditional customers have their own efforts. So we are seeing the most activity in the new entrant arena, where they're trying to pure-play developed vehicles.

And -- but we're focused on both. We're focused on existing customer business and the new entrants.

We hope that there will be a big part of our success. That's our aspiration.

That's our goal. It remains to be done and we want to diversify the company's customer set.

If you look at our 10-Ks over the last few years, you can see our top 6 customers are a big part of our financials, and we just flat out want to diversify that. So we have a financial [indiscernible] goal there as well as securing a new win that's multiproduct.

These are multiproduct new wins, and we have a unique value proposition situation.

Excellent. And just sneak one in here, lastly.

You mentioned what's going on strategically with the actions that you're utilizing to support $100 million to $150 million of new business, some of which has been anchored already. Perhaps you can comment on what portion of the mix has been anchored or anything to the extent would be helpful.

Yes. Yes, the way that we got comfortable being this entrepreneurial in the quarter was because we had a big win, a big one.

I can only say, I'll just say it's greater than $10 million, okay, just to give you a flavor. I don't really want to give guidance on these things.

They have to play out. But it was massive, and we didn't have the floor space to deal with it and we didn't have the people to deal with it.

We actually were very thankful, though, because we were light on the truck building side of things and we were able to take our people and use them, salaried staff and key hourly staff, to go drive to the customers' locations, understand what we needed to do, take pictures, come back, integrate with the customer, go through facility audits, which we've passed audits at all the facilities now and put in the infrastructure, mainly material handling because we have the people that know how to assemble products. And then we had to add a lot of new vendors.

So we had to procure material. We're procuring material we haven't procured before.

Some vendors we haven't known before and for whom we don't have a credit limit. So there's a whole financial part of getting set up being on approved vendor list.

Then establishing your MLQs, your order quantities, getting all your ship-tos down. So I would say the start-up issues have been material-oriented because we know how to put complicated assemblies together.

A seat has over 300 parts in it and around 30 vendors globally and has a lot of specifications that have to be met for safety and quality so we know how to do that. And it brought comfort to this customer set that we know how to deal with multiple global vendors, all at once, many parts, bring it together, high-quality, on time.

So our heritage helped us win. They were comfortable with their relationship with FSE, but when they got to know the rest of our company, they're like, okay, you're set up to deal with us.

So it was them getting comfortable with us as much as us getting comfortable with the business opportunity. And we don't want to get in front of ourselves, so this is a crawl, walk, run thing.

And so we didn't repurpose entire facilities. We repurposed portions of facilities.

So we want to see how this plays out over multiple quarters and then multiple years. But it's very similar business dynamic that FSE has lived with for the majority of their company life and so we accepted that and embrace that as well.

Thank you, and I appreciate the excellent questions from Jacob and Chris, where we covered a lot of good items here. I first want to thank all of our employees who had a really tough quarter.

And many of us are still on temporary salary constraints right now during this call. It's been a tough time going through the coronavirus, but we've done it.

We've got through it. We can see a little bit of light at the end of the tunnel.

I just want to say thank you to our entire team of 7,000 people who did that together. We pivoted really aggressively during the quarter, precisely and quickly to deliver these cost-outs in this cash generation and all the people that are involved with that, I'm thankful as well.

With regards to us as a company, we've tried to be clear about what we're trying to add to the company's goodness and what our aspirations are that remain to be done. We're being as transparent as we can about what we're doing and where we're headed, and we had a couple of cool wins during the quarter that are going to help out the balance of the next several quarters.

And so with that, I just want to thank you for your time today and look forward to keeping you abreast of our progress as it unfolds. And we'll end the call for today.

Thank you.