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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-34365
COMMERCIAL VEHICLE GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
41-1990662
(I.R.S. Employer
Identification No.)
7800 Walton Parkway
New Albany, Ohio
(Address of principal executive offices)
43054
(Zip Code)
(614) 289-5360
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.1 per shareCVGIThe NASDAQ Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No  
The number of shares outstanding of the Registrant’s common stock, par value $.01 per share, at August 4, 2022 was 33,405,217 shares.


COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
 
PART I FINANCIAL INFORMATION
PART II OTHER INFORMATION

i

PART I. FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
(Unaudited)
(In thousands, except per share amounts)
Revenues$250,849 $257,941 $495,223 $503,063 
Cost of revenues228,970 223,573 447,961 437,574 
Gross profit21,879 34,368 47,262 65,489 
Selling, general and administrative expenses15,652 18,039 32,651 33,757 
Operating income6,227 16,329 14,611 31,732 
Other (income) expense(167)(285)874 (941)
Interest expense2,118 2,818 4,079 7,859 
Loss on extinguishment of debt921 7,155 921 7,155 
 Income before provision for income taxes3,355 6,641 8,737 17,659 
Provision for income taxes870 1,546 2,270 4,074 
Net income$2,485 $5,095 $6,467 $13,585 
Earnings per Common Share:
Basic$0.08 $0.16 $0.20 $0.43 
Diluted$0.08 $0.16 $0.20 $0.42 
Weighted average shares outstanding:
Basic32,237 31,458 32,152 31,361 
Diluted33,039 32,674 33,009 32,654 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
 (Unaudited)
(In thousands)
Net income$2,485 $5,095 $6,467 $13,585 
Other comprehensive income (loss):
Foreign currency exchange translation adjustments(5,523)1,488 (5,196)(584)
Minimum pension liability, net of tax1,476 387 1,447 673 
Derivative instrument, net of tax(641)(77)2,173 (503)
Other comprehensive income (loss)(4,688)1,798 (1,576)(414)
Comprehensive income (loss)$(2,203)$6,893 $4,891 $13,171 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2022December 31, 2021
(Unaudited)
 (In thousands, except per share amounts)
ASSETS
Current Assets:
Cash$28,500 $34,958 
Accounts receivable, net of allowances of $485 and $243, respectively
219,312 174,472 
Inventories150,025 141,045 
Other current assets19,066 20,201 
Total current assets416,903 370,676 
Property, plant and equipment, net65,275 63,126 
Intangible assets, net16,416 18,283 
Deferred income taxes24,470 24,108 
Other assets, net33,508 31,500 
Total assets$556,572 $507,693 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$125,450 $101,915 
Accrued liabilities and other58,337 50,840 
Current portion of long-term debt8,750 9,375 
Total current liabilities192,537 162,130 
Long-term debt197,157 185,581 
Pension and other post-retirement benefits7,043 9,905 
Other long-term liabilities26,381 23,424 
Total liabilities423,118 381,040 
Stockholders’ equity:
Preferred stock, $0.01 par value (5,000,000 shares authorized; no shares issued and outstanding)
$ $ 
Common stock, $0.01 par value (60,000,000 shares authorized; 32,447,768 and 32,034,592 shares issued and outstanding respectively)
325 321 
Treasury stock, at cost: 1,832,518 and 1,708,981 shares, respectively
(14,084)(13,172)
Additional paid-in capital258,384 255,566 
Retained deficit(67,157)(73,624)
Accumulated other comprehensive loss(44,014)(42,438)
Total stockholders’ equity133,454 126,653 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$556,572 $507,693 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended June 30,
 20222021
(Unaudited)
 (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$6,467 $13,585 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization9,006 9,308 
Noncash amortization of debt financing costs199 781 
Payment in kind interest expense 2,254 
Share-based compensation expense2,818 3,165 
Deferred income taxes(1,454)1,819 
Non-cash loss (income) on derivative contracts34 (424)
Loss on extinguishment of debt921 7,155 
Settlement of derivative contract3,900  
Change in other operating items:
Accounts receivable(48,157)(50,839)
Inventories(11,802)(37,043)
Prepaid expenses(2,743)(4,931)
Accounts payable26,191 28,874 
Other operating activities, net10,113 1,484 
Net cash used in operating activities(4,507)(24,812)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment(8,616)(6,944)
Proceeds from disposal/sale of property, plant and equipment 35 
Net cash used in investing activities(8,616)(6,909)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan facility30,625 150,000 
Repayment of term loan facility(1,875) 
Repayment of 2023 term loan facility principal (152,654)
Borrowings under revolving credit facility65,200 35,500 
Repayment of revolving credit facility(83,600) 
Borrowings under ABL revolving credit facility 11,300 
Repayment of ABL revolving credit facility (11,300)
Surrender of common stock by employees(912) 
Debt extinguishment payments and early payment fees on debt (3,031)
Debt issuance and amendment costs(648)(2,333)
Contingent Consideration payment (5,000)
Other financing activities(131)(241)
Net cash provided by financing activities8,659 22,241 
EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH(1,994)(52)
NET INCREASE (DECREASE) IN CASH(6,458)(9,532)
CASH:
Beginning of period34,958 50,503 
End of period$28,500 $40,971 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
 Common StockTreasury
Stock
Additional Paid In CapitalRetained DeficitAccumulated 
Other Comp. Loss
Total CVG Stockholders’ 
Equity
 SharesAmount
(Unaudited)
(In thousands, except per share amounts)
Balance - December 31, 202031,249,811 $313 $(11,893)$249,312 $(97,356)$(45,006)$95,370 
Share-based compensation expense132,034 2 — 965 — — 967 
Total comprehensive income (loss)— — — — 8,490 (2,212)6,278 
Balance - March 31, 202131,381,845 $315 $(11,893)$250,277 $(88,866)$(47,218)$102,615 
Share-based compensation expense187,904 1 (73)2,201 — — 2,129 
Total comprehensive income— — — — 5,095 1,798 6,893 
Balance - June 30, 202131,569,749 $316 $(11,966)$252,478 $(83,771)$(45,420)$111,637 
Balance - December 31, 202132,034,592 $321 $(13,172)$255,566 $(73,624)$(42,438)$126,653 
Share-based compensation expense122,618 1 (464)1,117 — — 654 
Total comprehensive income— — — — 3,982 3,112 7,094 
Balance - March 31, 202232,157,210 $322 $(13,636)$256,683 $(69,642)$(39,326)$134,401 
Share-based compensation expense290,558 3 (448)1,701 — — 1,256 
Total comprehensive income (loss)— — — — 2,485 (4,688)(2,203)
Balance - June 30, 202232,447,768 $325 $(14,084)$258,384 $(67,157)$(44,014)$133,454 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Amounts in thousands, except for share and per share amounts and where specifically disclosed)
1. Description of Business and Basis of Presentation
At Commercial Vehicle Group, Inc. and its subsidiaries, we deliver real solutions to complex design, engineering and manufacturing problems across a range of global industries by innovating, constantly adding value, and treating our customer's bottom line as if it were our own. References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.

We have manufacturing operations in the United States, Mexico, China, United Kingdom, Belgium, Czech Republic, Ukraine, Thailand, India and Australia. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.
We primarily manufacture customized products to meet the requirements of our customer. We believe our products are used by a majority of the North American Commercial Truck markets, many construction vehicle OEMs and top e-commerce retailers.

The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of the Company and its subsidiaries. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted.

The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

These condensed notes to unaudited quarterly consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"), which includes a complete set of footnote disclosures, including the Company's significant accounting policies.
2. Recently Issued Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Also, in January 2021, the FASB issued ASU No. 2021-01 "Reference Rate Reform (Topic 848): Scope", to clarify that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company will apply the guidance to impacted transactions during the transition period. The Company does not expect the adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements.

6

3. Revenue Recognition

We had outstanding customer accounts receivable, net of allowances, of $219.3 million as of June 30, 2022 and $174.5 million as of December 31, 2021. We generally do not have other assets or liabilities associated with customer arrangements.

Revenue Disaggregation - The following is the composition, by product category, of our revenues:
Three Months Ended June 30, 2022
Vehicle SolutionsWarehouse AutomationElectrical SystemsAftermarket and AccessoriesTotal
Seats$65,304 $ $ $20,884 $86,188 
Electrical wire harnesses, panels and assemblies 5,397 47,345 1,813 54,555 
Trim47,469    47,469 
Warehouse Automation 23,150   23,150 
Cab structures28,787    28,787 
Mirrors, wipers and controls1,225   9,475 10,700 
Total$142,785 $28,547 $47,345 $32,172 $250,849 

Three Months Ended June 30, 2021
Vehicle SolutionsWarehouse AutomationElectrical SystemsAftermarket and AccessoriesTotal
Seats$68,958 $ $ $13,517 $82,475 
Electrical wire harnesses, panels and assemblies614 2,784 43,842 2,937 50,177 
Trim39,466   749 40,215 
Warehouse Automation 51,540   51,540 
Cab structures19,454   2,234 21,688 
Mirrors, wipers and controls1,738  353 9,755 11,846 
Total$130,230 $54,324 $44,195 $29,192 $257,941 

Six Months Ended June 30, 2022
Vehicle SolutionsWarehouse AutomationElectrical SystemsAftermarket and AccessoriesTotal
Seats$135,112 $ $ $36,671 $171,783 
Electrical wire harnesses, panels and assemblies 7,193 87,222 5,135 99,550 
Trim92,227   1,296 93,523 
Warehouse Automation 55,480   55,480 
Cab structures54,377    54,377 
Mirrors, wipers and controls1,225   19,285 20,510 
Total$282,941 $62,673 $87,222 $62,387 $495,223 

7

Six Months Ended June 30, 2021
Vehicle SolutionsWarehouse AutomationElectrical SystemsAftermarket and AccessoriesTotal
Seats$136,459 $ $ $27,594 $164,053 
Electrical wire harnesses, panels and assemblies1,309 6,035 89,970 6,409 103,723 
Trim76,223   1,309 77,532 
Warehouse Automation 92,661   92,661 
Cab structures37,367   4,981 42,348 
Mirrors, wipers and controls3,214  687 18,845 22,746 
Total$254,572 $98,696 $90,657 $59,138 $503,063 
4. Debt
Debt consisted of the following:
June 30, 2022December 31, 2021
Term loan facility$175,000 $146,250 
Revolving credit facility31,000 49,400 
Unamortized issuance costs and discount(93)(694)
$205,907 $194,956 
Less: current portion
(8,750)(9,375)
Total long-term debt, net of current portion$197,157 $185,581 
Credit Agreement
On April 30, 2021, the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) between, among others, Bank of America, N.A. as administrative agent (the “Administrative Agent”) and other lenders party thereto (the “Lenders”) pursuant to which the Lenders made available a $150 million Term Loan Facility (the “Term Loan Facility”) and a $125 million Revolving Credit Facility (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). Subject to the terms of the Credit Agreement, the Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0.
The proceeds of the Credit Facilities were used, together with cash on hand of the Company, to (a) fund the redemption, satisfaction and discharge of all of the Company’s outstanding secured credit facility due 2023 (the “2023 Term Loan Facility”) issued pursuant to a term facility agreement (the “Term Facility Agreement”) between, among others, Bank of America, N.A. as administrative agent and other lender parties thereto, (b) fund the redemption, satisfaction and discharge of all of the Company’s asset-based revolving credit facility (the “ABL Revolving Credit Facility”) issued pursuant to a facility agreement (the “ABL Facility Agreement”) between, among others, Bank of America, N.A. as agent and certain financial institutions as lenders, (c) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Credit Agreement, and (d) for working capital and other lawful corporate purposes of the Company and its subsidiaries.
On May 12, 2022, the Company and certain of its subsidiaries entered into a second amendment (the “Amendment”) to its Credit Agreement pursuant to which the Lenders upsized the existing term loan facility to $175 million in aggregate principal amount and increased the revolving credit facility commitments by $25 million to an aggregate of $150 million in revolving credit facility commitments. The Revolving Credit Facility includes a $10 million swing line sublimit and a $10 million letter of credit sublimit. The Amended Credit Agreement provides for an incremental term facility agreement and/or an increase of the Revolving Credit Facility (together, the “Incremental Facilities”), in a maximum aggregate amount of (a) up to the date of receipt of financial statements for the fiscal quarter ending June 30, 2022, $75 million, and (b) thereafter, (i) $75 million less the aggregate principal amount of Incremental Facilities incurred before such date, plus (ii) an unlimited amount if the pro forma consolidated total leverage ratio (assuming the Incremental Facilities are fully drawn) is less than 2.50:1.0. Further, separate from the Company’s annual $35 million capital spending cap, a one-time $45 million capital project basket was
8

included in the amendment. All other key provisions, including the $75 million accordion, acquisition holiday, and other baskets remain unchanged. The Credit Facilities mature on May 12, 2027 (the “Maturity Date”).
The Amendment resulted in a loss on extinguishment of debt of $0.9 million, including $0.6 million non-cash write off relating to deferred financing costs and unamortized discount of the Term Loan Facility and $0.3 million of other fees associated with the amended debt, recorded in our Consolidated Statements of Operations for the six months ended June 30, 2022.
The proceeds of the Credit Facilities will be used, together with cash on hand of the Company, to (a) pay transaction costs, fees and expenses incurred in connection therewith and in connection with the Amended Credit Agreement and (b) for working capital and other lawful corporate purposes of the Company and its subsidiaries.
At June 30, 2022, we had $31.0 million of borrowings under the Revolving Credit Facility, outstanding letters of credit of $1.2 million and availability of $117.8 million. The unamortized deferred financing fees associated with the Revolving Credit Facility of $1.4 million and $1.3 million as of June 30, 2022 and December 31, 2021, respectively, are being amortized over the remaining life of the Credit Agreement. At December 31, 2021, we had $49.4 million of borrowings under the Revolving Credit Facility and we had outstanding letters of credit of $1.4 million.
Interest rates and fees
Amounts outstanding under the Credit Facilities and the commitment fee payable in connection with the Credit Facilities accrue interest at a per annum rate equal to (at the Company’s option) the base rate or the Term Secured Overnight Financing Rate ("SOFR"), including a credit spread adjustment, plus a rate which will vary according to the Consolidated Total Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent, as set out in the following table:
Pricing TierConsolidated Total
Leverage Ratio
Commitment FeeLetter of Credit FeeEurodollar Rate LoansBase Rate Loans
I
> 3.50 to 1.00
0.35%2.75%2.75%1.75%
II
< 3.50 to 1.00 but
> 2.75 to 1.00
0.30%2.50%2.50%1.50%
III
< 2.75 to 1.00 but
> 2.00 to 1.00
0.25%2.25%2.25%1.25%
IV
< 2.00 to 1.00 but
> 1.50 to 1.00
0.20%2.00%2.00%1.00%
V
< 1.50 to 1.00
0.15%1.75%1.75%0.75%
Guarantee and Security
All obligations under the Credit Agreement and related documents are unconditionally guaranteed by each of the Company’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions (the “Guarantors”). All obligations of the Company under the Credit Agreement and the guarantees of those obligations are secured by a first priority pledge of substantially all of the assets of the Company and of the Guarantors, subject to certain exceptions. The property pledged by the Company and the Guarantors includes a first priority pledge of all of the equity interests owned by the Company and the Guarantors in their respective domestic subsidiaries and a first priority pledge of the equity interests owned by the Company and the Guarantors in certain foreign subsidiaries, in each case, subject to certain exceptions.
Covenants and other terms
The Credit Agreement contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant certain liens on assets; pay dividends or make certain other distributions; make certain investments or acquisitions; dispose of certain assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; make material changes in accounting treatment or reporting practices; enter into certain restrictive agreements; enter into certain hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; make acquisitions; and other matters customarily included in senior secured loan agreements.
The Credit Agreement also contains customary reporting and other affirmative covenants, as well as customary events of default, including, without limitation, nonpayment of obligations under the Credit Facilities when due; material inaccuracy of representations and warranties; violation of covenants in the Credit Agreement and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
9

The Credit Agreement includes (a) a minimum consolidated fixed charge coverage ratio of 1.20:1.0, and (b) a maximum consolidated total leverage ratio of 3.75:1.0 (which will be subject to step-downs to 3.50:1.0 at the end of the fiscal quarter ending March 31, 2023; to 3.25:1.0 at the end of the fiscal quarter ending June 30, 2023; and to 3.00:1.0 for each fiscal quarter on and after the fiscal quarter ending September 30, 2023).
We were in compliance with the covenants as of June 30, 2022.
Repayment and prepayment
The Credit Agreement requires the Company to make quarterly amortization payments to the Term Loan Facility at an annualized rate of the loans under the Term Loan Facility for every year as follows: 5.0%, 7.5%, 10.0%, 12.5% and 15%. The Credit Agreement also requires all outstanding amounts under the Credit Facilities to be repaid in full on the Maturity Date.
The Credit Agreement requires mandatory prepayments from the receipt of proceeds of dispositions or debt issuance, subject to certain exceptions and ability to re-invest and use proceeds towards acquisitions permitted by the Credit Agreement.
Voluntary prepayments of amounts outstanding under the Credit Facilities are permitted at any time, without premium or penalty.
Term Loan and Security Agreement
On April 12, 2017, the Company entered into the $175.0 million 2023 Term Loan Facility, maturing on April 12, 2023, pursuant to a term loan and security agreement (the “TLS Agreement”). On April 30, 2021, the 2023 Term Loan Facility was fully repaid and terminated as described below.
ABL Revolving Credit Facility
On September 18, 2019, the Company entered into an amendment of the Third Amended and Restated Loan and Security Agreement (the “Third ARLS Agreement”), dated as of April 12, 2017, which governed the Company’s ABL Revolving Credit Facility.
On March 1, 2021, the Company and certain of its subsidiaries entered into Amendment No. 3, which amended the terms of the Third ARLS Agreement, among other things, to extend the maturity date of the ABL Revolving Credit Facility to March 1, 2026 and to remove the condition that the first $7.0 million of the $90.0 million Revolver Commitments are available as a first-in, last-out facility.
The Third ARLS Agreement, as amended, also allowed the Company to increase the size of the ABL Revolving Credit Facility by up to $50.0 million with the consent of Lenders providing the increase in the ABL Revolving Credit Facility. On April 30, 2021, the ABL Revolving Credit Facility was fully repaid and terminated as described below.
Termination of TLS Agreement and Third ARLS Agreement
Effective on April 30, 2021, the Company issued a notice of redemption in respect of its 2023 Term Loan Facility and the ABL Revolving Credit Facility and deposited with the Bank of America, N.A. as Administrative Agent under the TLS Agreement and the Third ARLS Agreement proceeds from the Credit Facilities, together with cash on hand in an amount sufficient to discharge the Company’s obligations under the TLS Agreement and the Third ARLS Agreement and respective related agreements. All amounts under the 2023 Term Loan Facility and ABL Revolving Credit Facility were repaid and discharged in full on April 30, 2021 and the TLS Agreement and Third ARLS Agreement were terminated.
The discharge resulted in a loss on extinguishment of debt of $7.2 million, including $3.7 million non-cash write off relating to deferred financing costs and unamortized discount of the 2023 Term Loan Facility, a voluntary repayment premium of $3.0 million, and $0.5 million of other fees associated with the new debt, recorded in our Consolidated Statements of Operations for the six months ended June 30, 2021.
Cash Paid for Interest
For the six months ended June 30, 2022 and 2021, cash payments for interest were $3.5 million and $5.4 million, respectively.
10


5. Intangible Assets
Our definite-lived intangible assets were comprised of the following: 
June 30, 2022December 31, 2021
Weighted-
Average
Amortization
Period
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Trademarks/tradenames22 years$11,509 $(5,202)$6,307 $11,573 $(5,043)$6,530 
Customer relationships15 years14,430 (8,791)5,639 14,770 (8,499)6,271 
Technical know-how5 years9,790 (5,466)4,324 9,790 (4,487)5,303 
Covenant not to compete5 years330 (184)146 330 (151)179 
$36,059 $(19,643)$16,416 $36,463 $(18,180)$18,283 
    
The aggregate intangible asset amortization expense was $0.9 million for the three months ended June 30, 2022 and 2021. The aggregate intangible asset amortization expense was $1.7 million for the six months ended June 30, 2022 and 2021.

6. Fair Value Measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 - Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Our financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and liabilities. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.
Recurring Measurements
Foreign Currency Forward Exchange Contracts. Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in Mexican Pesos, Czech Crown and Ukrainian Hryvnia, we have entered into forward exchange contracts which are recorded in the Condensed Consolidated Balance Sheets at fair value. The hedge contracts for transactions denominated in Mexican Pesos are designated as cash flow hedge instruments and gains and losses as a result of the changes in fair value of the hedge contract are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of June 30, 2022, the hedge contracts for transactions denominated in Ukrainian Hryvnia and Czech Crown were not designated as hedging instruments; therefore, they are marked-to-market and the fair value of the agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense. Settlements of hedge transactions are recognized in cost of revenues in the Condensed Consolidated Statements of Operations in the period they are settled.
Interest Rate Swaps. To manage our exposure to variable interest rates, we have entered into interest rate swaps to exchange, at a specified interval, the difference between fixed and variable interest amounts calculated by reference to an agreed upon notional principal amount. The interest rate swaps are intended to mitigate the impact of rising interest rates on the Company and covers 50% of outstanding debt under the Term Loan Facility. Any changes in fair value are included in earnings or deferred through Accumulated other comprehensive loss, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the Condensed Consolidated Statements of Operations.
11


During the second quarter ended June 30, 2022, the Company entered into transactions to cash settle existing interest rate swaps and received proceeds of $3.9 million. The gain on the swap settlement has been recorded in Other comprehensive income (loss) and will be recognized over the life of the settled swaps. Following the settlement of the existing interest rate swaps, we entered into a new interest rate swap agreement to align with the SOFR rate and maturity date of the Credit Agreement.
Contingent Consideration. As a result of the acquisition of First Source Electronics, LLC (“FSE”) on September 17, 2019, the Company agreed to pay up to $10.8 million in contingent milestone payments (“Contingent Consideration”). The Contingent Consideration is payable based on achieving certain earnings before interest, taxes, depreciation and amortization ("EBITDA") thresholds over the periods from (a) September 18, 2019 through September 17, 2020, (b) September 18, 2019 through March 17, 2021, (c) September 18, 2019 through September 17, 2022 and (d) March 18, 2021 through September 17, 2022. The payment amount will be determined on a sliding scale for reaching between 90% and 100% of the respective EBITDA targets. The fair value for the milestone payments is based on a Monte Carlo simulation utilizing forecasted EBITDA through September 17, 2022. As of June 30, 2022, the remaining undiscounted Contingent Consideration payment is estimated at $4.8 million and the fair value is $4.6 million, which is presented in the Condensed Consolidated Balance Sheets in accrued liabilities and other. A payment of $5.0 million was made during the second quarter of 2021 based on achievement of the second EBITDA threshold.
The fair values of our derivative assets and liabilities and Contingent Consideration measured on a recurring basis are categorized as follows: 
June 30, 2022December 31, 2021
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:
Foreign exchange contract$1,650 $ $1,650 $ $1,375 $ $1,375 $