NEW ALBANY, Ohio, June 29, 2022 (GLOBE NEWSWIRE) — CVG (NASDAQ:CVGI) announced today that it has substantially completed the renegotiation of pricing agreements with several large revenue customers.
The new pricing taking effect this week, July 1, is expected to increase run-rate profits by >$30 million and also increase free cash flow accordingly. The second half of 2022 will immediately benefit from an additional >$15 million of increased pricing, which is expected to improve profitability and free cash flow in the second half of the year, with favorable impact beyond 2022 as well.
“It has taken a lot of time and effort to achieve renegotiated agreements that are profitable and sustainable in the post-Covid, supply-constrained environment. We are thankful to our customers and global commercial teams for confronting these issues and fixing them. We have one primary agreement remaining to be renegotiated that does not expire until late 2023. Except for that agreement, we have new profitable agreements with profit-maintenance algorithms for our large revenue customers in place. We have corrected and strengthened the core of our business tremendously,” said Harold Bevis, President and CEO of CVG.
“We continue to win new business and have organically won our first electrical harness program in the aerospace industry. This entry into the aerospace industry adds to the company’s growing new business program, which has had great success in the global electric vehicle industry.”
At CVG, we deliver real solutions to complex design, engineering, sourcing, and manufacturing problems across a range of global industries by innovating, adding value, and maintaining very high standards of quality. Information about the Company and its products is available on the internet at www.cvgrp.com.
Chief Financial Officer
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