0001026655false00010266552023-11-072023-11-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2023
 

Core Molding Technologies, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
001-12505
31-1481870
(State or other jurisdiction
incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
800 Manor Park Drive, Columbus, Ohio
43228-0183
(Address of principal executive office)
(Zip Code)
Registrant’s telephone number, including area code: (614) 870-5000
(Former name or former address if changed since last report.)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 $0.01CMTNYSE American LLC
Preferred Stock purchase rights, par value $0.01N/ANYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). 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 ☐


Item 2.02Results of Operations and Financial Condition.

On November 7, 2023, the Company announced financial results for the third quarter ended September 30, 2023. A copy of the press release announcing this event is included in this Form 8-K as Exhibit 99.1.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CORE MOLDING TECHNOLOGIES, INC.
Date: November 7, 2023By:
/s/ John P. Zimmer
Name:John P. Zimmer
Title:Executive Vice President, Treasurer, Secretary and Chief Financial Officer






FOR IMMEDIATE RELEASE

Core Molding Technologies Reports Fiscal 2023
Third Quarter Results
Strategic Initiatives Continue to Drive Higher Returns and Generate Strong Cash Flow

COLUMBUS, OH, November 7, 2023 – Core Molding Technologies, Inc. (NYSE American: CMT) (“Core Molding”, “Core” or the “Company”), a leading engineered materials company specializing in molded structural products, principally in building products, industrial and utilities, medium and heavy-duty truck and powersports industries across the United States, Canada and Mexico today reports financial and operating results for the fiscal periods ended September 30, 2023.

Third Quarter 2023 Highlights

•Net sales of $86.7 million, compared to $101.6 million in the prior year; and product sales of $80.9 million, down 12.4% from the prior year. Product sales increased by 19.6% on a cumulative basis over two years from 2021 levels when combining the 36.5% product sales increase from the 2022 third quarter with the 12.4% decrease in the 2023 third quarter.
•Gross margin of $15.3 million, or 17.6% of net sales, compared to $13.3 million or 13.1% of net sales in the prior year.
•Selling, general and administrative expenses of $9.4 million, or 10.8% of net sales compared to $8.7 million or 8.5% of net sales in the prior year same period. The current year quarter included one-time equipment relocation costs of $0.5 million.
•Operating income of $5.9 million, or 6.8% of net sales, versus operating income of $4.6 million, or 4.6% of net sales in the prior year.
•Net income of $4.4 million, or $0.49 per diluted share, compared to net income of $1.3 million, or $0.16, in the prior year. Adjusted net income was $0.53 per diluted share1 this year, up 51%, versus $0.35 per diluted share1 in the prior year, which excludes $0.5 million in equipment relocation costs this quarter and $1.6 million of loss from early extinguishment of debt from refinancing last year.
•Adjusted EBITDA1 of $9.8 million, or 11.3% of net sales, compared to $8.4 million, or 8.3% of net sales in the prior year.

Nine Month 2023 Highlights

•Net sales of $284.0 million, down 2.4% from $290.9 million in the prior year; and product sales of $274.9 million, down 0.2% from the prior year.
•Gross margin of $53.6 million, or 18.9% of net sales, compared to $40.9 million or 14.1% of net sales from the prior year.
•Selling, general and administrative expenses of $29.6 million, or 10.4% of net sales compared to $25.9 million or 8.9% in the prior year same period.
•Operating income of $24.0 million, or 8.5% of net sales, versus $15.0 million, or 5.2% of net sales in the prior year.
•Net income of $18.1 million, or $2.08 per diluted share, compared to net income of $7.4 million, or $0.87 a year ago. Adjusted net income was $2.12 per diluted share1 this year, up 100%, versus $1.06 per diluted share1 last year.
•Adjusted EBITDA1 of $35.8 million, or 12.6% of net sales, compared to $25.9 million, or 8.9% of net sales in the prior year.

1 Adjusted EBITDA and Adjusted Net Income Per Share are non-GAAP financial measures as defined and reconciled below.



David Duvall, the Company’s President and Chief Executive Officer, said, “Our performance for the third quarter was in line with our expectations, and our operational improvements are progressing according to plan. Gross margins remained solid and within our targeted ranges this quarter, based on a combination of additional operational improvements and continued pricing discipline. We were awarded $50 million of new or replacement business through the first nine months of this year, which launches primarily in 2024 and later, demonstrating the continued strong demand for our services. Our product sales results this quarter were not surprising given the strong comparisons from last year, and on a two-year basis, we increased almost 20% versus 2021 levels. We will remain focused on further revenue expansion, diversification through technical solution sales, continued improvements in profitability, and the generation of cash flow.”

John Zimmer, the Company’s EVP and Chief Financial Officer commented, “Third quarter was a return to more historical seasonality than last year when customers were rebuilding inventories against higher demand. Regarding product sales this quarter, medium and heavy-duty trucks were up, while other end markets were down as customers worked inventories lower throughout the period. For the third quarter, excluding the equipment moving cost this year and the refinancing costs last year, Adjusted diluted net income per share1 increased by 51% from the year-ago quarter, and we expanded Adjusted EBITDA1 margin by 300 basis points. Our trailing twelve months of Adjusted EBITDA1 increased to a Company record of $41.8 million, giving us confidence that our strategic growth initiatives are progressing as expected. Free cash flow1 for the first nine months was $19.3 million, and with a strong balance sheet, we ended the quarter with $68 million of available liquidity.

“Similar to the third quarter, our outlook for the fourth quarter anticipates a return to historical seasonality and customer de-stocking, which along with the impact of UAW strikes at customer locations in the fourth quarter, is expected to result in sales declines of 15% to 20% from the fourth quarter of 2022. We continue to target gross margins in the 17.5% to 18.5% range for fiscal year 2023, and full-year revenues may be down 5% to 10% compared to fiscal year 2022.”

1Adjusted EBITDA, Adjusted Net Income per Diluted Shares and Free Cash Flow are non-GAAP financial measures as defined and reconciled below.

2023 Capital Expenditures

For the first nine months, capital expenditures were $6.8 million, including approximately $1.8 million of capacity expansion and automation investments. The Company’s total 2023 capital expenditures are expected to be in the range of approximately $9.0 to $11.0 million.

Financial Position at September 30, 2023

The Company's cash and cash equivalents at September 30, 2023, were $18 million, and its cash provided by operating activities for the nine months totaled $26.1 million. The Company’s total liquidity at the end of the third fiscal quarter of 2023 was $68.0 million, with $18.0 million in cash, $25.0 million of undrawn capacity under the Company’s revolving credit facility and $25.0 million of undrawn capacity under the Company's capex credit facility. The Company’s term debt was $23.3 million on September 30, 2023. The term debt-to-trailing twelve months Adjusted EBITDA1 was less than one times Adjusted EBITDA1 at the end of the fiscal third quarter. The Company had a return on capital employed1 of 17.2% on a trailing twelve month basis as of September 30, 2023.

1 Adjusted EBITDA and return on capital employed are non-GAAP financial measures as defined and reconciled below.




Conference Call

The Company will conduct a conference call today at 10:00 a.m. Eastern Time to discuss financial and operating results for the quarter ended September 30, 2023. To access the call live by phone, dial (844) 881-0134 and ask for the Core Molding Technologies call at least 10 minutes prior to the start time. A telephonic replay will be available through November 14, 2023, by calling 877-344-7529 and using passcode ID: 8134739#. A webcast of the call will also be available live and for later replay on the Company’s Investor Relations website at www.coremt.com/investor-relations/events-presentations/.

About Core Molding Technologies, Inc.

Core Molding Technologies is a leading engineered materials company specializing in molded structural products, principally in building products, utilities, transportation and powersports industries across North America. The Company operates in one operating segment as a molder of thermoplastic and thermoset structural products. The Company’s operating segment consists of one reporting unit, Core Molding Technologies. The Company offers customers a wide range of manufacturing processes to fit various program volume and investment requirements. These thermoset processes include compression molding of sheet molding compound (“SMC”), resin transfer molding (“RTM”), liquid molding of dicyclopentadiene (“DCPD”), spray-up and hand-lay-up. The thermoplastic processes include direct long-fiber thermoplastics (“DLFT”) and structural foam and structural web injection molding. Core Molding Technologies serves a wide variety of markets, including the medium and heavy-duty truck, marine, automotive, agriculture, construction, and other commercial products. The demand for Core Molding Technologies’ products is affected by economic conditions in the United States, Mexico, and Canada. Core Molding Technologies’ operations may change proportionately more than revenues from operations.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this press release may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results and the future of the Company’s end markets. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: general macroeconomic, social, regulatory and political conditions, including uncertainties surrounding volatility in financial markets; the short-term and long-term impact of the coronavirus (COVID-19) pandemic, or other pandemics in the future, on our business; changes in the plastics, transportation, marine and commercial product industries; efforts of the Company to expand its customer base and develop new products to diversify markets, materials and processes and increase operational enhancements; the Company’s initiatives to quote and execute manufacturing processes for new business, acquire raw materials, address inflationary pressures, regulatory matters and labor relations; and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.


Company Contact:
Core Molding Technologies, Inc.
John Zimmer
Executive Vice President & Chief Financial Officer
jzimmer@coremt.com

Investor Relations Contact:
Three Part Advisors, LLC
Sandy Martin or Steven Hooser
214-616-2207


- Financial Statements Follow –




Core Molding Technologies, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three months ended September 30,Nine months ended September 30,
2023202220232022
Net sales:
Products$80,896 $92,340 $274,933 $275,558 
Tooling5,832 9,266 9,028 15,375 
Total net sales86,728 101,606 283,961 290,933 
Total cost of sales71,450 88,303 230,380 250,015 
Gross margin15,278 13,303 53,581 40,918 
Selling, general and administrative expense9,403 8,671 29,562 25,889 
Operating income5,875 4,632 24,019 15,029 
Other income and expense
Loss due to the extinguishment of debt— 1,582 — 1,582 
Interest expense187 511 836 1,511 
Net periodic post-retirement benefit(52)(31)(157)(93)
Total other income and expense135 2,062 679 3,000 
Income before income taxes5,740 2,570 23,340 12,029 
Income tax expense1,386 1,251 5,198 4,658 
Net income$4,354 $1,319 $18,142 $7,371 
Net income per common share:
Basic$0.50 $0.16 $2.13 $0.87 
Diluted$0.49 $0.16 $2.08 $0.87 





Core Molding Technologies, Inc.
Product Sales by Market
(unaudited, in thousands)

Three months ended September 30,Nine months ended September 30,
2023202220232022
Medium and heavy-duty truck$45,395 $44,951 $140,104 $116,864 
Power sports13,705 19,963 59,619 62,133 
Building products4,823 6,779 27,301 36,219 
Industrial and Utilities4,473 6,087 17,525 19,814 
All Other12,500 14,560 30,384 40,528 
Net Product Revenue$80,896 $92,340 $274,933 $275,558 


Core Molding Technologies, Inc.
Consolidated Balance Sheets
(in thousands)
As of
9/30/2023As of
(unaudited)12/31/2022
Assets:
Current assets:
Cash and cash equivalents$18,035 $4,183 
Accounts receivable, net45,938 44,261 
Inventories, net24,988 23,871 
Prepaid expenses and other current assets13,171 8,350 
Total current assets102,132 80,665 
Right of use asset4,261 5,114 
Property, plant and equipment, net81,788 83,267 
Goodwill17,376 17,376 
Intangibles, net6,414 7,619 
Other non-current assets4,686 4,574 
Total Assets$216,657 $198,615 
Liabilities and Stockholders' Equity:
Liabilities:
Current liabilities:
Current portion of long-term debt$1,310 $1,208 
Revolving debt— 1,864 
Accounts payable28,682 29,586 
Contract liabilities1,146 1,395 
Compensation and related benefits10,523 9,101 
Accrued other liabilities11,209 7,643 
Total current liabilities52,870 50,797 
Other non-current liabilities2,998 3,516 
Long-term debt21,982 22,986 
Post retirement benefits liability4,815 5,191 
Total Liabilities82,665 82,490 
Stockholders' Equity:
Common stock86 84 
Paid in capital42,565 40,342 
Accumulated other comprehensive income, net of income taxes3,222 3,053 
Treasury stock(31,768)(29,099)
Retained earnings119,887 101,745 
Total Stockholders' Equity133,992 116,125 
Total Liabilities and Stockholders' Equity$216,657 $198,615 



Core Molding Technologies, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
Nine months ended September 30,
20232022
Cash flows from operating activities:
Net income$18,142 $7,371 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization9,575 9,406 
Loss on disposal of property, plant and equipment80 — 
Share-based compensation2,223 1,705 
Loss on the extinguishment of debt— 1,234 
Losses on foreign currency202 178 
Change in operating assets and liabilities:
Accounts receivable(1,677)(19,036)
Inventories(1,117)(1,725)
Prepaid and other assets(4,474)1,940 
Accounts payable(414)10,355 
Accrued and other liabilities4,340 (2,773)
Post retirement benefits liability(731)(166)
Net cash provided by operating activities26,149 8,489 
Cash flows from investing activities:
Purchase of property, plant and equipment(6,803)(12,284)
Net cash used in investing activities(6,803)(12,284)
Cash flows from financing activities:
Gross borrowings on revolving loans(38,962)(120,357)
Gross repayment on revolving loans37,098 119,985 
Payment of deferred loan costs— (402)
Payments for taxes related to net share settlement of equity awards(2,669)(482)
Proceeds from term loan— 25,000 
Payment on principal on term loans(961)(25,586)
Net cash used in financing activities(5,494)(1,842)
Net change in cash and cash equivalents13,852 (5,637)
Cash and cash equivalents at beginning of year4,183 6,146 
Cash and cash equivalents at end of year$18,035 $509 
Cash paid for:
Interest$939 $1,320 
Income taxes$4,518 $5,378 
Non cash investing activities:
Fixed asset purchases in accounts payable and other non-current liabilities$848 $1,058 
Non-cash financing activities:
Deposit used in payment of principal on term loans$— $1,200 




Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Core Molding management uses non-GAAP measures in its analysis of the Company's performance. Investors are encouraged to review the reconciliation of non-GAAP financial measures to the comparable GAAP results available in the accompanying tables.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation and amortization of long-lived assets, (iv) share based compensation expense, (v) plant closure costs, and (vi) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. Free Cash Flow represents net cash (used in) provided by operating activities less purchase of property, plant and equipment. Return on capital employed represents earnings before (i) interest expense, net and (ii) provision (benefit) for income taxes divided by (i) stockholders' equity and (ii) current and long-term debt. Adjusted net income per share represents net income before (i) equipment relocation costs net of related provision (benefit) for income taxes and (ii) loss due to extinguishment of debt net of related provision (benefit) for income taxes divided by either (i) weighted average common shares outstanding - basic or (ii) weighted average common and potentially issuable common share outstanding - diluted.

We present Adjusted EBITDA, Adjusted EBITDA as a percent of net sales, adjusted net income per share, debt-to-trailing twelve months adjusted EBITDA, Free Cash Flow and Return on Capital Employed because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. Our calculation of these measures may not be comparable to similarly named measures reported by other companies. The following tables present reconciliations of net income to Adjusted EBITDA, Cash Flow from Operating Activities to Free Cash Flow, and Adjusted Net Income Per Share to Net Income Per Share, the most directly comparable GAAP measures, and Return on Capital Employed, for the periods presented:


Core Molding Technologies, Inc.
Net Income to Adjusted EBITDA Reconciliation
(unaudited, in thousands)

Three months ended September 30,Nine months ended September 30,
2023202220232022
Net income$4,354 $1,319 $18,142 $7,371 
Provision for income taxes1,386 1,251 5,198 4,658 
Total other expenses(1)
135 2,062 679 3,000 
Depreciation and amortization3,208 3,170 9,516 9,146 
Share-based compensation736 623 2,223 1,705 
Adjusted EBITDA$9,819 $8,425 $35,758 $25,880 
Adjusted EBITDA as a percent of net sales11.3 %8.3 %12.6 %8.9 %
(1)Includes interest expense, non-cash periodic post-retirement benefit cost and loss of extinguishment of debt



Core Molding Technologies, Inc.
Computation of Debt to Trailing Twelve Months Adjusted EBITDA
(unaudited, in thousands, except for ratio)

Q4 2022Q1 2023Q2 2023Q3 2023Trailing Twelve Month Adjusted EBITDA
Net income$4,832 $5,852 $7,936 $4,354 $22,974 
Provision for income taxes(2,276)1,919 1,893 1,386 2,922 
Total other expenses(1)
418 304 241 135 1,098 
Depreciation and amortization2,457 3,390 2,918 3,208 11,973 
Share-based compensation624 731 756 736 2,847 
Adjusted EBITDA$6,055 $12,196 $13,744 $9,819 $41,814 
Total Outstanding Term Debt as of September 30, 2023$23,292 
 Debt to Trailing Twelve Months Adjusted EBITDA
0.56 
(1)Includes interest expense, non-cash periodic post-retirement benefit cost and loss of extinguishment of debt


Core Molding Technologies, Inc.
Computation of Return on Capital Employed
(unaudited, in thousands)


Q4 2022Q1 2023Q2 2023Q3 2023Trailing Twelve Month Adjusted EBITDA
Operating income$2,974 $8,075 $10,070 $5,875 $26,994 
Equity as of September 30, 2023$133,992 
Structure debt as of September 30, 2023$23,292 
Total structured investment as of September 30, 2023$157,284 
Trailing twelve month return on capital employed as of September 30, 202317.2 %
Q4 2021Q1 2022Q2 2022Q3 2022Trailing Twelve Month Adjusted EBITDA
Operating income$1,942 $6,012 $4,385 $4,632 $16,971 
Equity as of September 30, 2022$108,672 
Structure debt as of September 30, 2022$24,500 
Total structured investment as of September 30, 2022$133,172 
Trailing twelve month return on capital employed as of September 30, 202212.7 %





Core Molding Technologies, Inc.
Free Cash Flow
Nine Months Ended September 30, 2023 and 2022
(unaudited, in thousands)

20232022
Cash flow provided by operations$26,149 $8,489 
Purchase of property, plant and equipment(6,803)(12,284)
Free cash flow (deficit) surplus$19,346 $(3,795)





Core Molding Technologies, Inc.
Adjusted Net Income per Share
(unaudited, in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net Income$4,354 $1,319 $18,142 $7,371 
Loss due to extinguishment of debt$— $1,582 $— $1,582 
Equipment relocation expense$540 $— $540 $— 
Tax impact(1)
$(162)$— $(162)$— 
Adjusted net income$4,732 $2,901 $18,520 $8,953 
Weighted average common shares outstanding - basic8,623,000 8,414,000 8,515,000 8,337,000 
Weighted average common and potentially issuable common shares outstanding- diluted8,842,000 8,418,000 8,716,000 8,338,000 
Net income per share - basic$0.50 $0.16 $2.13 $0.87 
Loss due to extinguishment of debt— 0.19 — 0.19 
Equipment relocation expense0.06 — 0.06 — 
Tax impact(1)
(0.02)— (0.02)— 
Adjusted net income per share - basic$0.54 $0.35 $2.17 $1.06 
Net income per share - diluted$0.49 $0.16 $2.08 $0.87 
Loss due to extinguishment of debt— 0.19 — 0.19 
Equipment relocation expense0.06 — 0.06 — 
Tax impact(1)
(0.02)— (0.02)— 
Adjusted net income per share - diluted$0.53 $0.35 $2.12 $1.06 
(1)Due to the Company's net operating loss position in the United States in 2022, tax benefits from losses were fully offset by a valuation allowance.


v3.23.3
Cover Page
Nov. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2023
Entity Registrant Name Core Molding Technologies, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-12505
Entity Tax Identification Number 31-1481870
Entity Address, Address Line One 800 Manor Park Drive
Entity Address, City or Town Columbus
Entity Address, State or Province OH
Entity Address, Postal Zip Code 43228-0183
City Area Code 614
Local Phone Number 870-5000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.01
Trading Symbol CMT
Security Exchange Name NYSEAMER
Entity Emerging Growth Company false
Document Information [Line Items]  
Document Period End Date Nov. 07, 2023
Entity Registrant Name Core Molding Technologies, Inc.
Entity Central Index Key 0001026655
Amendment Flag false
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