Core Molding Technologies, Inc. (NYSE MKT:CMT) (“Core Molding”
or the “Company”) today announced results for the third quarter
ended September 30, 2016.
Third Quarter 2016 Compared to Third
Quarter 2015:
- Net sales were $41.3 million compared
to $48.0 million
- Product sales were $33.8 million
compared to $44.2 million
- Gross margin was 13.5% compared to
17.3%
- Operating income was $1.7 million
compared to $3.9 million
- Net income was $1.0 million, or $0.13
per diluted share, compared with $2.5 million, or $0.33 per diluted
share
Nine Months 2016 Compared to Nine
Months 2015:
- Net sales were $125.8 million compared
to $152.5 million
- Product sales were $113.2 million
compared to $145.6 million
- Gross margin was 16.5% compared to
18.6%
- Operating income was $8.4 million
compared to $15.0 million
- Net income was $5.4 million, or $0.70
per diluted share, compared with $9.7 million, or $1.27 per diluted
share
Business Overview
Kevin L. Barnett, President and Chief Executive Officer of Core
Molding Technologies, stated, “Consistent with our expectations
headed into the third quarter, the cyclical decline in build-rates
in the heavy-duty truck market resulted in a reduction of our
product sales during the period. Lower demand from customers in the
heavy-duty truck market was partially offset by an increase in
demand from customers in the marine market. Partially offsetting
the reduction in product sales was an increase in tooling sales as
we completed several tooling projects related to both new and
replacement programs during the quarter. Our gross margin declined
during the quarter as a result of higher production costs and an
unfavorable revenue mix shift, coupled with lower fixed cost
absorption related to lower production levels. We continue to focus
on reducing operating costs in response to decreasing sales while
maintaining the ability to meet the volatile delivery requirements
of our customers. While gross margin declined during the quarter,
our year-to-date gross margin of 16.5% is within the norm of our
historical levels. We also remain diligent in controlling selling,
general and administrative costs, which resulted in third quarter
2016 selling, general and administrative expense as a percent of
sales remaining roughly in line with the prior year level. Even
with the declining product volume, we were able to continue to
strengthen our financial position, adding nearly $4 million to our
cash balance during the third quarter through free cash flow
generation, which positions us well to invest in future growth
initiatives.”
“We continue to focus on providing our customers with a wide
range of material and process solutions and are proud to have
recently announced the introduction of our new technology,
HydriliteTM. This ultra-low density SMC formulation enables us to
offer our customers a lower density material that supports their
lightweighting efforts while providing structural durability and a
high-quality surface appearance. We expect HydriliteTM to be
attractive across our end markets given customers’ efforts to
lightweight their products,” Mr. Barnett added.
Outlook
Mr. Barnett continued, “We anticipate our fourth quarter 2016
sales to be lower relative to 2015 as a result of the continued
downturn in activity in the heavy-duty truck market and it is
likely that this trend will continue into 2017, albeit to a lesser
degree than in the current year. Industry sources currently
forecast a decline in North American production of heavy-duty
trucks of 30% in 2016, with further weakening of approximately 10%
in 2017 before rebounding by nearly 20% in 2018. Our expectation is
that our ongoing improvements and cost reduction efforts will catch
up to our lower sales levels in 2017, thus stabilizing our gross
margins. While fourth quarter product sales are expected to be
lower, we anticipate stronger fourth quarter tooling sales than the
prior year period as we continue to complete tooling projects for
new and replacement programs. Ultimately, we are confident in our
ability to profitably manage through this down-cycle as we have
with previous downturns over the past 20 years.”
“Diversification into new markets, as well as new materials and
processes remains an important part of our strategy to mitigate the
impact of the inevitable down-cycles in the heavy duty-truck
market. We plan to accomplish this both organically, as well as
through acquisitions, by utilizing our strong balance sheet and
free cash flow. Additionally, the heavy-duty truck market will
continue to be a major part of our business and analysts project a
strong rebound in this market over the next several years. With our
significant position in the truck market, and the progress we are
making expanding our end markets and manufacturing capabilities, we
remain optimistic in our ability to deliver long-term profitable
growth and returns to our shareholders,” Mr. Barnett concluded.
About Core Molding Technologies,
Inc.
Core Molding Technologies, Inc. is a manufacturer of sheet
molding compound (SMC) and molder of fiberglass reinforced
thermoset and thermoplastic materials. Core specializes in
large-format moldings and offers a wide range of fiberglass
processes, including compression molding of SMC, glass mat
thermoplastics (GMT) and bulk molding compounds (BMC); compression
and transfer molding of direct long-fiber thermoplastics (D-LFT);
spray-up, lay-up, resin transfer (RTM) and vacuum resin transfer
molding (V-RTM). Additionally, the company offers reaction
injection molding (RIM) of dicyclopentadiene (DCPD). Core serves a
wide variety of markets, including the medium and heavy-duty truck,
marine, automotive, agriculture, construction and other commercial
products markets. Headquartered in Columbus, Ohio, Core maintains
plants in Columbus and Batavia, Ohio; Gaffney, South Carolina;
Winona, Minnesota; and Matamoros, Mexico. For further information,
visit the company's website at www.coremt.com.
This press release may contain certain forward-looking
statements within the meaning of the federal securities laws. As a
general matter, forward-looking statements are those focused upon
future plans, objectives or performance as opposed to historical
items and include statements of anticipated events or trends and
expectations and beliefs relating to matters not historical in
nature. Such forward-looking statements involve known and unknown
risks and are subject to uncertainties and factors relating to Core
Molding Technologies' operations and business environment, all of
which are difficult to predict and many of which are beyond Core
Molding Technologies' control. Words such as “may,” “will,”
“could,” “would,” “should,” “anticipate,” “predict,” “potential,”
“continue,” “expect,” “intend,” “plans,” “projects,” “believes,”
“estimates,” “confident” and similar expressions are used to
identify these forward-looking statements. These uncertainties and
factors could cause Core Molding Technologies' actual results to
differ materially from those matters expressed in or implied by
such forward-looking statements. Except as required by law, Core
Molding Technologies, Inc. undertakes no obligation to update these
forward looking statements.
Core Molding Technologies believes that the following factors,
among others, could affect its future performance and cause actual
results to differ materially from those expressed or implied by
forward-looking statements made in this report: business conditions
in the plastics, transportation, marine and commercial product
industries (including slowdown in demand for truck production);
federal and state regulations (including engine emission
regulations); general economic, social and political environments
in the countries in which Core Molding Technologies operates;
safety and security conditions in Mexico; dependence upon certain
major customers as the primary source of Core Molding Technologies'
sales revenues; efforts of Core Molding Technologies to expand its
customer base; the ability to develop new and innovative products
and to diversify markets, materials and processes and increase
operational enhancements; the actions of competitors, customers,
and suppliers; failure of Core Molding Technologies' suppliers to
perform their obligations; the availability of raw materials;
inflationary pressures; new technologies; regulatory matters; labor
relations; the loss or inability of Core Molding Technologies to
attract and retain key personnel; the Company’s ability to
successfully identify, evaluate and manage potential acquisitions
and to benefit from and properly integrate any completed
acquisitions; federal, state and local environmental laws and
regulations; the availability of capital; the ability of Core
Molding Technologies to provide on-time delivery to customers,
which may require additional shipping expenses to ensure on-time
delivery or otherwise result in late fees; risk of cancellation or
rescheduling of orders; management's decision to pursue new
products or businesses which involve additional costs, risks or
capital expenditures; and other risks identified from time-to-time
in Core Molding Technologies' other public documents on file with
the Securities and Exchange Commission, including those described
in Item 1A of the Company’s 2015 Annual Report to stockholders
on Form 10-K.
(See Accompanying Tables)
CORE MOLDING TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Income (Unaudited)
(in thousands, expect per share data)
Three Months Ended Nine Months
Ended September 30, September 30,
2016 2015 2016 2015
Net sales: Products $ 33,816 $ 44,243 $ 113,159 $ 145,612
Tooling 7,520 3,806 12,651 6,893
Total net sales 41,336
48,049 125,810 152,505
Total cost of sales 35,755
39,738 105,043 124,186
Gross margin 5,581 8,311
20,767 28,319
Total selling, general and administrative
expense 3,924 4,409 12,361 13,294
Operating
income 1,657 3,902 8,406 15,025
Interest expense
67 95 233 237
Income before income taxes 1,590 3,807
8,173 14,788
Income tax expense 561 1,323 2,794 5,069
Net income $ 1,029 $ 2,484 $ 5,379 $ 9,719
Net income per common share: Basic $ 0.13 $ 0.33 $ 0.71 $
1.28 Diluted $ 0.13 $ 0.33 $ 0.70 $ 1.27
Weighted average shares
outstanding: Basic 7,635 7,597 7,616 7,578 Diluted 7,667 7,625
7,649 7,623
Condensed
Consolidated Balance Sheets
(in thousands)
As
of9/30/2016(Unaudited)
As of12/31/2015
Assets: Cash $ 24,311 $ 8,943 Accounts Receivable 21,190
36,886 Inventories 11,325 13,697 Other Current Assets 2,786 3,158
Property, Plant and Equipment, net 71,212 74,103 Goodwill 2,403
2,403 Intangibles, net 575 613
Total Assets $ 133,802 $
139,803
Liabilities and Stockholders' Equity Current
Portion of Long-term Debt $ 3,000 $ 3,714 Accounts Payable 9,704
13,481 Compensation and Related Benefits 5,187 8,474 Tooling in
Progress 1,072 2,271 Current portion of post retirement benefits
liability 1,088 1,088 Accrued Liabilities and Other 1,501 2,122
Long-Term Debt 7,500 9,750 Deferred Tax Liability 2,252 2,252 Post
Retirement Benefits Liability 7,890 7,918 Stockholders' Equity
94,608 88,733
Total Liabilities and Stockholders' Equity $
133,802 $ 139,803
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version on businesswire.com: http://www.businesswire.com/news/home/20161103005349/en/
Company:Core Molding Technologies, Inc.John Zimmer,
614-870-5604Vice President & Chief Financial
Officerjzimmer@coremt.comorInvestor Relations:The Equity
Group Inc.Fred Buonocore,
212-836-9607fbuonocore@equityny.comorKevin Towle,
212-836-9620ktowle@equityny.comwww.theequitygroup.com
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