Core Molding Technologies, Inc. (NYSE MKT: CMT) (“Core Molding”
or the “Company”) today announced results for the fourth quarter
and full year ended December 31, 2016.
Fourth Quarter 2016 Compared to Fourth
Quarter 2015:
- Net sales were $49.1 million compared
to $46.6 million
- Product sales were $33.5 million
compared to $43.5 million
- Gross margin was 14.6% compared to
17.0%
- Operating income was $3.1 million
compared to $3.5 million
- Net income was $2.0 million, or $0.26
per diluted share, compared with $2.3 million, or $0.31 per diluted
share
Full Year 2016 Compared to Full Year
2015:
- Net sales were $174.9 million compared
to $199.1 million
- Product sales were $146.6 million
compared to $189.1 million
- Gross margin was 16.0% compared to
18.2%
- Operating income was $11.5 million
compared to $18.5 million
- Net income was $7.4 million, or $0.97
per diluted share, compared with $12 million, or $1.58 per diluted
share
Business Overview
Kevin L. Barnett, President and Chief Executive Officer of Core
Molding Technologies, stated, “Despite the challenges resulting
from the cyclical downturn in the heavy-duty truck market in 2016,
we were pleased with our overall financial performance for the
year. Although product sales declined 22% for the year, we
delivered a gross margin of 16% and nearly a dollar per share in
earnings, indicative of our ability to manage costs during truck
market cyclical downturns.”
Mr. Barnett added, “In 2016, we had several significant
accomplishments. We successfully completed over $28 million of new
and replacement tooling programs with our customers representing
the largest single year of tooling in our history. Our market
diversification efforts enabled us to partially offset the 30%
product demand reduction we saw from our truck customers with
increased product sales in other markets. We also had several key
new product wins that will launch over the next couple of years and
developed seven new sheet molding compound formulations. These new
formulations support our efforts to be a leader in lightweight
materials, expand our offering and improve the performance of our
materials. Finally, our consistent profitability and disciplined
capital management resulted in the addition of $19 million to our
cash balance over the course of the year, further enhancing our
financial flexibility, which will permit us to invest in future
growth initiatives.”
Mr. Barnett continued, “Our fourth quarter total sales improved
on a year over year basis, driven by the increase in tooling sales.
Product sales were down year-over-year, as anticipated, reflecting
the continued cyclical decline in the build-rates of our heavy-duty
truck customers. Relative to the third quarter of 2016, our product
sales were essentially flat following five quarters of sequential
declines. We believe this is an indicator that the current truck
cycle is nearing a bottom. Our fourth quarter gross margin was
lower than the prior year, but compared to the third quarter of
2016 improved by more than 100 basis points, reflective of the
operating cost improvements we implemented over the course of the
year. We continue to work to improve our operating cost leverage as
we manage through the current cyclical downturn.”
Outlook
Mr. Barnett stated, "Looking ahead to 2017, industry sources are
predicting North American Class 8 truck production to be down
approximately 10% compared to full year 2016 build levels. Given
the cost reductions we made over the course of 2016, ongoing
continuous improvement programs, and our industry diversification
we believe we are prepared to work through this heavy-duty truck
down cycle. We are encouraged that the same industry sources are
calling for year-over-year increases for Class 8 truck production
in the high-teens to low-twenty percentage range in 2018 and 2019,
and we are planning accordingly so that we are prepared to
capitalize on the potential strengthening demand.”
Mr. Barnett concluded, “While sales to the heavy-duty truck
market will continue to be an important business for us over the
long-term, further diversification into new markets, new materials
and new processes remains an important part of our strategy. We
plan to accomplish this both organically, as well as through
acquisitions, utilizing our strong balance sheet and free cash
flow. With our significant heavy-duty truck market share, progress
we are making expanding our end markets and manufacturing
capabilities, and our continuous improvement efforts, we remain
optimistic in our ability to deliver long-term profitable growth
and returns to our shareholders.”
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, regulatory (including
foreign trade policy) 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; inadequate insurance coverage to protect against
potential hazards; equipment and machinery failure; product
liability and warranty claims; 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 Year Ended 12/31/2016
12/31/2015 12/31/2016 12/31/2015 Product Sales $
33,465 $ 43,492 $ 146,624 $ 189,103 Tooling Sales 15,607
3,072 28,258 9,965 Net Sales 49,072 46,564 174,882
199,068 Cost of Sales 41,915 38,630 146,958
162,816 Gross Margin 7,157 7,934 27,924 36,252 Selling, General and
Admin. Expense 4,018 4,460 16,379 17,754
Operating Income 3,139 3,474 11,545 18,498 Interest Expense, net 65
94 298 330 Income before Taxes 3,074 3,380
11,247 18,168 Income Tax Expense 1,042 1,049 3,836
6,118 Net Income $ 2,032 $ 2,331 $ 7,411
$ 12,050 Net Income Per Common Share Basic $ 0.27 $
0.31 $ 0.97 $ 1.59 Diluted $ 0.26 $ 0.31 $ 0.97 $ 1.58 Weighted
Average Shares Outstanding Basic 7,635 7,597 7,621 7,583 Diluted
7,699 7,625 7,661 7,623
Condensed
Consolidated Balance Sheets
(in thousands)
As of 12/31/2016(Unaudited)
As of 12/31/2015 Assets: Cash $ 28,285 $ 8,943 Accounts Receivable
19,551 36,886 Inventories 10,912 13,697 Other Current Assets 2,521
3,158 Property, Plant and Equipment, net 70,601 74,103 Goodwill
2,403 2,403 Intangibles, net 563 613 Total Assets $ 134,836
$ 139,803 Liabilities and Stockholders' Equity
Current Portion of Long-term Debt $ 3,000 $ 3,714 Accounts Payable
8,534 13,481 Compensation and Related Benefits 5,004 8,474 Tooling
in Progress 1,084 2,271 Accrued Liabilities and Other 2,658 2,122
Long-Term Debt and Interest Rate Swaps 6,750 9,750 Deferred Tax
Liability 2,373 2,252 Post Retirement Benefits Liability 8,667
9,006 Stockholders' Equity 96,766 88,733 Total Liabilities
and Stockholders' Equity $ 134,836 $ 139,803
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version on businesswire.com: http://www.businesswire.com/news/home/20170307005850/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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