EX-99.1 2 a8-k991pressreleaseq32022.htm EX-99.1 Document

FOR IMMEDIATE RELEASE

Core Molding Technologies Reports Fiscal 2022
Third Quarter Results
Record Quarterly Sales of $101.6 million, up 25%

COLUMBUS, OH, November 8, 2022 – 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, 2022.

Third Quarter 2022 Highlights

•Net sales of $101.6 million, up 25.4% from $81.0 million in the prior year; and product sales of $92.3 million, up 36.5% from the prior year.
•Gross margin of $13.3 million, or 13.1% of net sales, compared to $6.4 million or 7.9% of net sales.
•Selling, general and administrative expenses of $8.7 million, or 8.5% of net sales compared to $8.8 million or 10.9% in the prior year same period. Fiscal 2021 results included $1.8 million of costs from a plant closure.
•Operating income of $4.6 million, or 4.6% of net sales, versus operating loss of $(2.4) million, or (3.0)% of net sales in the prior year.
•Net income of $1.3 million, or $0.16 per diluted share, compared to net loss of $(3.3) million, or $(0.41) a year ago. Fiscal 2022 net income included a one-time $1.6 million, or $0.19 per share2, loss on extinguishment of debt associated with the completed debt refinancing that occurred during the quarter.
•Adjusted EBITDA1 of $8.4 million, or 8.3% of net sales, compared to $0.4 million, or 0.5% of net sales in the prior year.

Nine Month 2022 Highlights

•Net sales of $290.9 million, up 24% from $234.3 million in the prior year; and product sales of $275.6 million, up 27.6% from the prior year.
•Gross margin of $40.9 million, or 14.1% of net sales, compared to $32.9 million or 14.0% of net sales.
•Selling, general and administrative expenses of $25.9 million, or 8.9% of net sales compared to $23.7 million or 10.1% in the prior year same period. Fiscal 2021 results included $2.0 million of costs from a plant closure.
•Operating income of $15.0 million, or 5.2% of net sales, versus $9.1 million, or 3.9% of net sales in the prior year.
•Net income of $7.4 million, or $0.87 per diluted share, compared to net income of $4.2 million, or $0.50 a year ago. Fiscal 2022 net income included a one-time $1.6 million, or $0.19 per share, loss on extinguishment of debt associated with the completed debt refinancing that occurred during the quarter.
•Adjusted EBITDA1 of $25.9 million, or 8.9% of net sales, compared to $18.7 million, or 8.0% of net sales in the prior year.

1 Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled below.
2 Adjusted earnings per share is a non-GAAP financial measure as defined and reconciled below.



David Duvall, the Company’s President and Chief Executive Officer, said, “We are pleased to report strong sales for the quarter, increasing 25% to a record $101.6 million in the third quarter. Major programs continue to ramp up this year, and net new wins are on track totaling $24 million. We are also delighted to have signed a new agreement with Universal Forest Products ("UFP"), which extends our relationship for another 5 years. Our long-term relationships with large, blue-chip companies like UFP remain a high priority for us, and our goal is to continue providing value-added solutions for a diverse group of essential industries including industrial, utilities, building products, commercial, packaging, transportation, powersports, as well as infrastructure-related businesses throughout North America.

“The demand environment for our products and solutions remains strong and we continue to be excited about customer launches this year. These product launches are primarily in expanding industries and end markets that benefit from our light weighting, low cost, and durable engineered solutions, which also represent important margin-enhancing initiatives,” Duvall concluded.

John Zimmer, the Company’s EVP and Chief Financial Officer commented, “Third quarter delivered continued strength in our results and, although we continue to see strong customer demand, we remain guarded for 2023 due to potential macro-economic headwinds. Gross margin improvements from the prior year were impacted by the Company's successful efforts to recover raw material cost increases. We also continue to work on operational efficiencies and respond to inflation in order to stabilize margins, while balancing the seasonality of our business.

“Once again, we ended the quarter with a strong working capital position from organic growth, as well as good financial liquidity. We completed our debt refinancing and interest rate swap transactions during the quarter, which provides financial flexibility and liquidity to grow and deliver on commitments of long-term value creation,” concluded Zimmer.

2022 Capital Expenditures

The Company’s capital expenditures for the first nine months of the year were $12.3 million. As a result of the net new business and program wins through the first nine months of 2022 of $24 million, on top of $75 million of net new business wins in 2021, the Company plans for 2022 capital expenditures of approximately $18 million. In 2022, expenditures for automation and the addition of three presses in the direct long fiber and structural foam processes will provide added capacity to allow the Company to meet its current demand and to add new business.

Financial Position at September 30, 2022

The Company’s total liquidity at the end of the third fiscal quarter 2022 was $46.5 million, with $509 thousand in cash, $20.9 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 $24.5 million at September 30, 2022. 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 14.6% on an annualized basis for the nine months ended September 30, 2022.

On July 22, 2022, the Company refinanced its existing debt facility with a new credit facility in an aggregate principal amount of $75 million, evenly divided between a revolving loan, term loan and capex loan commitment. Concurrent with the closing of this new credit facility, the Company entered into an interest rate swap agreement through July 22, 2027, on the $25 million term loan and will pay a fixed rate of 2.95% plus a margin of 180 to 230 basis points determined based on the Company's leverage ratio. The Company repaid in full its existing Wells Fargo and FGI term loans with proceeds from the new credit facility.

1 Adjusted EBITDA and return on capital employed are metrics and 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, 2022. 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 15, 2022, by calling (877) 344-7529 and using passcode ID: 8621534#. 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 processes include compression molding of sheet molding compound (“SMC”), resin transfer molding (“RTM”), liquid molding of dicyclopentadiene (“DCPD”), spray-up and hand-lay-up, direct long-fiber thermoplastics (“D-LFT”) and structural foam and structural web injection molding (“SIM”). 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, the future of the Company’s end markets, including the short-term and long-term impact of the coronavirus (COVID-19) global pandemic 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
614-870-5604

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 share and per share data)
Three months ended September 30,Nine months ended September 30,
2022202120222021
Net sales:
Products$92,340 $67,643 $275,558 $215,894 
Tooling9,266 13,382 15,375 18,421 
Total net sales101,606 81,025 290,933 234,315 
Total cost of sales88,303 74,610 250,015 201,446 
Gross margin13,303 6,415 40,918 32,869 
Selling, general and administrative expense8,671 8,808 25,889 23,744 
Operating income (loss)4,632 (2,393)15,029 9,125 
Other income and expense
Loss due to the extinguishment of debt1,582 — 1,582 — 
Interest expense511 563 1,511 1,725 
Net periodic post-retirement benefit(31)(40)(93)(120)
Total other income and expense2,062 523 3,000 1,605 
Income (loss) before income taxes2,570 (2,916)12,029 7,520 
Income tax expense1,251 396 4,658 3,290 
Net income (loss)$1,319 $(3,312)$7,371 $4,230 
Net income (loss) per common share:
Basic$0.16 $(0.41)$0.87 $0.50 
Diluted$0.16 $(0.41)$0.87 $0.50 



Core Molding Technologies, Inc.
Consolidated Balance Sheets
(in thousands)
As of
9/30/2022As of
(unaudited)12/31/2021
Assets:
Current assets:
Cash and cash equivalents$509 $6,146 
Accounts receivable, net54,297 35,261 
Inventories, net26,854 25,129 
Prepaid expenses and other current assets6,980 8,606 
Total current assets88,640 75,142 
Right of use asset4,317 5,577 
Property, plant and equipment, net81,443 75,897 
Goodwill17,376 17,376 
Intangibles, net8,106 9,567 
Other non-current assets2,602 3,133 
Total Assets$202,484 $186,692 
Liabilities and Stockholders' Equity:
Liabilities:
Current liabilities:
Current portion of long-term debt$1,205 $3,943 
Revolving debt4,052 4,424 
Accounts payable34,277 22,695 
Contract liabilities3,120 6,256 
Compensation and related benefits8,187 7,532 
Accrued other liabilities8,186 8,202 
Total current liabilities59,027 53,052 
Other non-current liabilities3,725 4,605 
Long-term debt23,295 21,251 
Post retirement benefits liability7,765 7,689 
Total Liabilities93,812 86,597 
Stockholders' Equity:
Common stock84 82 
Paid in capital39,718 38,013 
Accumulated other comprehensive income, net of income taxes1,056 1,075 
Treasury stock(29,099)(28,617)
Retained earnings96,913 89,542 
Total Stockholders' Equity108,672 100,095 
Total Liabilities and Stockholders' Equity$202,484 $186,692 



Core Molding Technologies, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
Nine months ended September 30,
20222021
Cash flows from operating activities:
Net income$7,371 $4,230 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization9,406 9,273 
Loss on disposal of property, plant and equipment— 625 
Deferred income tax— (595)
Share-based compensation1,705 1,416 
Loss on the extinguishment of debt1,234 — 
Losses on foreign currency178 214 
Change in operating assets and liabilities:
Accounts receivable(19,036)(11,843)
Inventories(1,725)(4,050)
Prepaid and other assets1,940 (1,829)
Accounts payable10,355 6,841 
Accrued and other liabilities(2,773)1,085 
Post retirement benefits liability(166)(319)
Net cash provided by operating activities8,489 5,048 
Cash flows from investing activities:
Purchase of property, plant and equipment(12,284)(8,301)
Net cash used in investing activities(12,284)(8,301)
Cash flows from financing activities:
Gross borrowings on revolving loans(120,357)(19,465)
Gross repayment on revolving loans119,985 21,365 
Payment of deferred loan costs(402)(2)
Payments related to the purchase of treasury stock(482)(96)
Proceeds from term loan25,000 — 
Payment on principal on term loans(25,586)(2,065)
Net cash used in financing activities(1,842)(263)
Net change in cash and cash equivalents(5,637)(3,516)
Cash and cash equivalents at beginning of year6,146 4,131 
Cash and cash equivalents at end of year$509 $615 
Cash paid for:
Interest$1,320 $1,376 
Income taxes$5,378 $4,313 
Non cash investing activities:
Fixed asset purchases in accounts payable$1,058 $123 
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 and net working capital. 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 earnings per share represents (i) net income excluding the loss due to extinguishment of debt (ii) divided by weighted average shares outstanding. These metrics are supplemental measures of our operating performance that are neither required by nor presented in accordance with, GAAP. 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. We present Adjusted EBITDA 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. 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 and Adjusted Earnings per Share, and Cash Flow from Operating Activities to Free Cash Flow, the most directly comparable GAAP measures, 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,
2022202120222021
Net income (loss)$1,319 $(3,312)$7,371 $4,230 
Provision for income taxes1,251 396 4,658 3,290 
Total other expenses(1)
2,062 523 3,000 1,605 
Depreciation and amortization3,170 2,218 9,146 8,140 
Share-based compensation623 612 1,705 1,416 
Adjusted EBITDA$8,425 $437 $25,880 $18,681 
Adjusted EBITDA as a percent of net sales8.3 %0.5 %8.9 %8.0 %
(1)Includes interest expense and non-cash periodic post-retirement benefit cost and loss due to the extinguishment of debt



Core Molding Technologies, Inc.
Computation of Debt to Trailing Twelve Months Adjusted EBITDA
(unaudited, in thousands)
Three months ending December 31, 2021Nine months ending September 30, 2022Trailing Twelve Month Adjusted EBITDA
Net income$441 $7,371 $7,812 
Provision for income taxes958 4,658 5,616 
Total other expenses(1)
586 3,000 3,586 
Depreciation and amortization2,222 9,146 11,368 
Share-based compensation470 1,705 2,175 
Plant closure costs(2)
68 — 68 
Adjusted EBITDA$4,745 $25,880 $30,625 
Total Outstanding Term Debt as of September 30, 2022$24,500 
 Debt to Trailing Twelve Months Adjusted EBITDA
0.80 
(1)Includes interest expense and non-cash periodic post-retirement benefit cost and loss due to the extinguishment of debt
(2)Reflects Cincinnati facility closing




Core Molding Technologies, Inc.
Computation of Return on Capital Employed
Nine Months Ended September 30, 2022 and 2021
(unaudited, in thousands)

20222021
Equity$108,672 $100,095 
Structure debt28,552 29,618 
Total structured investment$137,224 $129,713 
Operating income$15,029 $9,125 
Return on capital employed11.0 %7.0 %
Annualized return on capital employed14.6 %9.3 %




Core Molding Technologies, Inc.
Free Cash Flow
Nine Months Ended September 30, 2022 and 2021
(unaudited, in thousands)

20222021
Cash flow provided by operations$8,489 $5,048 
Purchase of property, plant and equipment(12,284)(8,301)
Free cash flow (deficit) surplus$(3,795)$(3,253)




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

Three months ending September 30, 2022Nine months ending September 30, 2022
Net Income$1,319 $7,371 
Loss due to extinguishment of debt1,582 1,582 
Tax impact(1)
— — 
Adjusted net income$2,901 $8,953 
Weighted average common shares outstanding - basic8,414,000 8,337,000 
Weighted average common and potentially issuable common shares outstanding - diluted8,418,000 8,338,000 
Net income per share - Basic$0.16 $0.87 
Loss due to extinguishment of debt per share - Basic0.19 0.19 
Tax impact per Share - Basic(1)
— — 
Adjusted Net income per share - Basic$0.35 $1.06 
Net income per share - Diluted$0.16 $0.87 
Loss due to extinguishment of debt per share - Diluted0.19 0.19 
Tax impact per Share - Diluted(1)
— — 
Adjusted Net income per share - Diluted$0.35 $1.06 
(1)Due to the Company's net operating loss position in the United States, tax benefits from losses are fully offset by a valuation allowance