COLUMBUS, Ohio, March 11, 2021 /PRNewswire/ -- Core Molding
Technologies, Inc. (NYSE American: CMT) ("Core Molding", "Core" or
the "Company") today announced results for the full year and fourth
quarter ended December 31, 2020.
The Company recorded net income of $8.2
million for the full year 2020 compared to a net loss of
$15.2 million for the same period in
2019. Operational improvements in 2020 drove the
increase in net income as the Company benefited from the completion
of its turnaround started in the fourth quarter of 2018. For
the fourth quarter 2020, the Company recorded a net loss
$0.9 million compared to a net loss
of $5.5 million for the fourth
quarter of 2019. The 2020 fourth quarter net loss includes a
one-time charge, net of tax, of $1.3
million from the successful refinancing of the Company's
debt in October 2020. Excluding the one-time charge, the
Company would have recorded net income of $0.4 million in the fourth quarter
2020.
The Company's net sales decreased $61.9
million or 22% for the full year 2020 to $222.4 million compared to $284.3 million in 2019. Lower demand from
our customers as a result of a cyclical downturn in the truck
market and the full year negative effect of COVID-19 on most
customer demand were the primary drivers of the sales
decrease. For the fourth quarter 2020, net sales increased
$4.5 million or 8% to $60.7 million compared to the same period in 2019
due to increased demand in the construction and all-terrain
vehicles markets combined with stable demand in the other markets
the Company serves. Customer demand continued to improve in
the fourth quarter 2020 from COVID-19 effected demand levels in the
second quarter of 2020.
"The two foundational components of our transformation strategy
are the Core Molding Values and Execution Excellence. We
first needed to create an inspired team and then create a culture
of excellence in executing the business," said David Duvall, President and Chief Executive
Officer. "I am proud of the progress we have made in these
areas and it directly shows in our 2020 financial
performance. Even with a $62
million decrease in net sales we were able to increase our
net income by over $23
million. These two foundational components must
always remain a part of who Core Molding is and how we operate,"
concluded Duvall.
The Company generated cash flows from operations for the full
year 2020 of $28.2 million compared
to $16.7 million for the same period
of 2019. Year over year improvement in cash flows from
operations is a result of the Company's operational improvements
and focus on managing working capital.
Fourth Quarter 2020 Compared to Fourth Quarter 2019:
- Net sales were $60.7 million
compared to $56.1 million.
- Product sales were $58.6 million
compared to $54.6 million.
- Gross margin was 16.4% compared to 6.0%.
- Selling, general and administrative expenses were $7.0 million compared to $7.5 million.
- Goodwill impairment charge was $4.1
million for the three months ended December 31, 2019.
- Operating income was $3.0 million
compared to operating loss of $4.1
million.
- Net loss was $0.9 million, or
($0.10) per share, compared to net
loss of $5.5 million, or ($0.69) per share.
Year ended 2020 Compared to Year ended 2019:
- Net sales were $222.4 million
compared to $284.3 million.
- Product sales were $210.6 million
compared to $269.0 million.
- Gross margin was 15.5% compared to 7.6%.
- Selling, general and administrative expenses were $24.1 million compared to $28.9 million.
- Goodwill impairment charge was $4.1
million for the year ended December
31, 2019.
- Operating income was $10.4
million compared to operating loss of $11.5 million.
- Net income was $8.2 million, or
$0.98 per share, compared to net loss
of $15.2 million, or ($1.94) per share.
Full year and fourth quarter 2020 gross margin increased over
the same periods in 2019 primarily as a result of product mix and
operational improvements. "Operational improvements
implemented as part of the Company's turnaround have stabilized the
Company's performance and improved the Company's profitability,"
said John Zimmer, Executive Vice
President and Chief Financial Officer.
Full year and fourth quarter 2020 selling, general and
administrative expenses decreased compared to the same period in
2020 due primarily to lower professional services, due to the
stabilization of the Company's operations in 2020, and due to lower
travel costs due to travel restrictions resulting from the effects
of COVID-19. In addition, the Company received $1.4 million of COVID-19 related government
subsidies in the second and third quarter of 2020 which reduced
full year 2020 selling, general and administrative costs.
Full year operating income improved to $10.4 million from an operating loss of
$11.5 million in 2019. "I am
incredibly proud of the entire team who proved we have the ability
to adapt to any challenge while executing with excellence in
2020. In the second quarter we cut costs, improved inventory
turns, and protected against the early pandemic customer
shutdowns. In the second half of 2020 we used the same
flexibility and operational execution techniques to deliver on
rapidly increasing demands," said Eric
Palomaki, Executive Vice President of Operations. "The
2020 results are a testament to the creativity and the ability to
handle both extremes with a desire to win with integrity and
demonstrates our preparedness for 2021 and the right to grow and
pursue the future transformation of business," concluded
Palomaki.
Financial Position at December 31,
2020:
- Total assets of $165.5
million.
- Revolving line of credit debt of $0.4
million.
- Term loan debt of $27.7
million.
- Stockholders' equity of $93.9
million.
The Company's debt to equity ratio as of December 31, 2020 is 30%. "As a result of
refinancing of the Company's credit facility in the fourth quarter
of 2020 and due to strong cash flows from operations for all of
2020, the Company has been able to reduce its debt to equity ratio
nearly in half from the 2019 year end level of 59%," said
Zimmer. "With the improvement in the Company's debt to equity
ratio, the Company is in good position financially to turn its
attention to growing the business," concluded Zimmer.
Outlook
Looking forward, based on industry analysts'
projections and customer forecasts, the Company expects sales
levels for 2021 to increase compared to 2020. In the
Company's largest market, North American heavy-duty truck, ACT
Research is forecasting production to increase approximately
41%. In several other industries the Company serves,
customers are forecasting higher demand in 2021 including in the
marine and all-terrain vehicle markets.
The Company anticipates higher raw material costs in 2021 as
global economies continue to strengthen from the COVID-19 effected
2020 economic levels. Global demand for certain raw materials
the Company uses has increased in the second half of 2020 and in
the first quarter of 2021. As a result, suppliers have been
increasing the price of these materials. The Company has the
ability to pass through a portion, but not all, of the cost
increases to its customers.
In February 2021, an unprecedented
winter storm in Texas and
Mexico caused operational
disruptions to many companies in the area including the Company's
Matamoros and Monterey Mexico
operations as well as to our customers and suppliers. Much of
North American resins and glass supply originate from the region
and these supplier operations were significantly affected causing
suppliers to claim force majeure and set supply allocations.
While the Company has been able to coordinated its raw material
supply with customer demand, other supplier disruptions throughout
our customers' supply chain have resulted in our customers delaying
orders. In addition, suppliers of certain materials, such as
polypropylene, have increased prices due to a shortage of
supply. Suppliers have indicated they anticipate supply
levels to recover during the second quarter of 2021.
"We are now able to effectively leverage our ability to execute
well by better serving our current customers and continuing our
diversification of the business. With our expertise and
industry leading breadth of composite and plastic processes we can
offer complete solutions that are uniquely developed to maximize
value for our customers' applications," said Duvall. "We are
increasing our investment in materials development, technology and
applications engineering to better understand the market needs and
translate those to high value solutions for our customers.
With more focus on environmental stewardship we are seeing
increased interest in composite and plastic solutions that provide
lighter weights, consolidation of components, and higher
performance," concluded Duvall.
About Core Molding Technologies, Inc.
Core Molding
Technologies and its subsidiaries operate
in one operating segment as a molder of thermoplastic and
thermoset structural products. The Company's operating segment
consists of two component reporting units, Core Traditional and
Horizon Plastics. 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"), bulk molding compounds
("BMC"), 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'
manufacturing operations have a significant fixed cost component.
Accordingly, during periods of changing demand, the profitability
of Core Molding Technologies' operations may change proportionately
more than revenues from operations.
This press release contains 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," "encouraged," "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.
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 Annual Report on
Form 10-K: business conditions in the plastics, transportation,
marine and commercial product industries (including changes 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; the adverse impact of coronavirus (COVID-19) global
pandemic on our business, results of operations, financial
position, liquidity or cash flow, as well as impact on customers
and supply chains; safety and security conditions in Mexico and Canada; fluctuations in foreign currency
exchange rates; 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; ability to accurately quote and execute manufacturing
processes for new business; 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; labor availability; a work stoppage or labor disruption
at one of our union locations or one of our customer or supplier
locations; 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 sufficient 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 and other customer
charges; 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
this Annual Report on Form 10-K.
Company Contact:
John
Zimmer
ExweVice President & Chief Financial Officer
614-870-5604
jzimmer@coremt.com
(See Accompanying Tables)
CORE MOLDING
TECHNOLOGIES, INC.
|
Condensed
Consolidated Statements of Income (Loss) (Unaudited)
|
(in thousands,
expect per share data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
sales:
|
|
|
|
|
|
|
|
Products
|
$
|
58,563
|
|
|
|
$
|
54,585
|
|
|
|
$
|
210,580
|
|
|
|
$
|
268,987
|
|
|
Tooling
|
2,091
|
|
|
|
1,537
|
|
|
|
11,776
|
|
|
|
15,303
|
|
|
Total net
sales
|
60,654
|
|
|
|
56,122
|
|
|
|
222,356
|
|
|
|
284,290
|
|
|
|
|
|
|
|
|
|
|
Total cost of
sales
|
50,687
|
|
|
|
52,740
|
|
|
|
187,882
|
|
|
|
262,784
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
9,967
|
|
|
|
3,382
|
|
|
|
34,474
|
|
|
|
21,506
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
6,953
|
|
|
|
7,503
|
|
|
|
24,084
|
|
|
|
28,934
|
|
|
Goodwill
impairment
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,100
|
|
|
Total
expenses
|
6,953
|
|
|
|
7,503
|
|
|
|
24,084
|
|
|
|
33,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
3,014
|
|
|
|
(4,121)
|
|
|
|
10,390
|
|
|
|
|
(11,528)
|
|
|
|
|
|
|
|
|
|
|
Other income and
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
2,586
|
|
|
|
1,266
|
|
|
|
5,923
|
|
|
|
4,144
|
|
|
Net periodic
post-retirement benefit cost
|
(20)
|
|
|
|
(22)
|
|
|
|
(80)
|
|
|
|
(94)
|
|
|
Total other income
and expense
|
2,566
|
|
|
|
1,244
|
|
|
|
5,843
|
|
|
|
4,050
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes
|
448
|
|
|
|
(5,365)
|
|
|
|
4,547
|
|
|
|
(15,578)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
1,315
|
|
|
|
97
|
|
|
|
(3,618)
|
|
|
|
(335)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(867)
|
|
|
|
$
|
(5,462)
|
|
|
|
$
|
8,165
|
|
|
|
$
|
(15,223)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.10)
|
|
|
|
$
|
(0.69)
|
|
|
|
$
|
0.98
|
|
|
|
$
|
(1.94)
|
|
|
Diluted
|
$
|
(0.10)
|
|
|
|
$
|
(0.69)
|
|
|
|
$
|
0.98
|
|
|
|
$
|
(1.94)
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
7,975
|
|
|
|
7,868
|
|
|
|
7,936
|
|
|
|
7,830
|
|
|
Diluted
|
7,975
|
|
|
|
7,868
|
|
|
|
7,936
|
|
|
|
7,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
(in
thousands)
|
|
As of
12/31/2020
(Unaudited)
|
|
As of
12/31/2019
|
Assets:
|
|
|
|
|
Cash
|
|
$
|
4,131
|
|
|
|
$
|
1,856
|
|
Accounts Receivable,
net
|
|
27,584
|
|
|
|
32,424
|
|
Inventories,
net
|
|
18,360
|
|
|
|
21,682
|
|
Other Current
Assets
|
|
6,403
|
|
|
|
5,263
|
|
Right of Use
Asset
|
|
2,754
|
|
|
|
4,484
|
|
Property, Plant and
Equipment, net
|
|
74,052
|
|
|
|
79,206
|
|
Goodwill
|
|
17,376
|
|
|
|
17,376
|
|
Intangibles,
net
|
|
11,516
|
|
|
|
13,464
|
|
Other Long-Term
Assets
|
|
3,332
|
|
|
|
3,551
|
|
Total
Assets
|
|
$
|
165,508
|
|
|
|
$
|
179,306
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current Portion of
Long-Term Debt
|
|
$
|
2,535
|
|
|
|
$
|
37,443
|
|
Current Portion of
Revolving Debt
|
|
420
|
|
|
|
12,008
|
|
Accounts
Payable
|
|
16,994
|
|
|
|
19,910
|
|
Compensation and
Related Benefits
|
|
8,305
|
|
|
|
5,515
|
|
Accrued Other
Liabilities
|
|
6,322
|
|
|
|
7,725
|
|
Lease
Liability
|
|
2,693
|
|
|
|
3,119
|
|
Long-Term
Debt
|
|
25,198
|
|
|
|
—
|
|
Post Retirement
Benefits Liability
|
|
9,109
|
|
|
|
9,160
|
|
Stockholders'
Equity
|
|
93,932
|
|
|
|
84,426
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
165,508
|
|
|
|
$
|
179,306
|
|
|
Year
Ended
|
|
December
31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
8,165
|
|
|
$
|
(15,223)
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
11,662
|
|
|
10,376
|
Deferred income
tax
|
1,097
|
|
|
(873)
|
Mark-to-market of
interest rate swap
|
—
|
|
|
67
|
Goodwill
impairment
|
—
|
|
|
4,100
|
Share-based
compensation
|
1,355
|
|
|
1,564
|
Losses (gains) on
foreign currency
|
237
|
|
|
(33)
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
4,840
|
|
|
13,044
|
Inventories
|
3,322
|
|
|
4,083
|
Prepaid and other
assets
|
(2.017)
|
|
|
2,587
|
Accounts
payable
|
(3,142)
|
|
|
(4,849)
|
Accrued and other
liabilities
|
2,909
|
|
|
3,420
|
Post retirement
benefits liability
|
(264)
|
|
|
(1,628)
|
Net cash provided
by operating activities
|
28,164
|
|
|
16,701
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(3,683)
|
|
|
(7,460)
|
Net cash used in
investing activities
|
(3,683)
|
|
|
(7,460)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Gross repayments on
revolving line of credit
|
(68,381)
|
|
|
(199,782)
|
Gross borrowings on
revolving line of credit
|
56,793
|
|
|
194,414
|
Proceeds from term
loan
|
30,165
|
|
|
—
|
Payment of principal
on term loan
|
(38,725)
|
|
|
(3,375)
|
Payment of deferred
loan costs
|
(2,038)
|
|
|
(435)
|
Payments related to
the purchase of treasury stock
|
(20)
|
|
|
(98)
|
Net cash provided
by (used in) financing activities
|
(22,206)
|
|
|
(9,276)
|
|
|
|
|
Net change in cash
and cash equivalents
|
2,275
|
|
|
(35)
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
1,856
|
|
|
1,891
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
4,131
|
|
|
$
|
1,856
|
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
|
3,854
|
|
|
$
|
3,869
|
Income
taxes
|
$
|
570
|
|
|
$
|
1,284
|
Non cash investing
activities:
|
|
|
|
Fixed asset purchases
in accounts payable
|
$
|
147
|
|
|
$
|
158
|
|
Three Months
Ended
|
|
December
31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(867)
|
|
|
$
|
(5,462)
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,237
|
|
|
2,676
|
Deferred income
tax
|
580
|
|
|
(241)
|
Mark-to-market of
interest rate swap
|
—
|
|
|
67
|
Goodwill
impairment
|
—
|
|
|
—
|
Share-based
compensation
|
296
|
|
|
300
|
Losses (gains) on
foreign currency
|
34
|
|
|
55
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(1,278)
|
|
|
13,422
|
Inventories
|
(3,127)
|
|
|
1,731
|
Prepaid and other
assets
|
(1,270)
|
|
|
687
|
Accounts
payable
|
(1,089)
|
|
|
(2,344)
|
Accrued and other
liabilities
|
671
|
|
|
3,167
|
Post retirement
benefits liability
|
(75)
|
|
|
(1,330)
|
Net cash (used in)
provided by operating activities
|
(2,888)
|
|
|
12,728
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(967)
|
|
|
(1,180)
|
Net cash used in
investing activities
|
(967)
|
|
|
(1,180)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Gross repayments on
revolving line of credit
|
(9,025)
|
|
|
(51,103)
|
Gross borrowings on
revolving line of credit
|
9,445
|
|
|
42,293
|
Proceeds from term
loan
|
29,990
|
|
|
—
|
Payment of principal
on term loan
|
(35,334)
|
|
|
(843)
|
Payment of deferred
loan costs
|
(1,898)
|
|
|
(1)
|
Payments related to
the purchase of treasury stock
|
—
|
|
|
(38)
|
Net cash provided
by (used in) financing activities
|
(6,823)
|
|
|
(9,692)
|
|
|
|
|
Net change in cash
and cash equivalents
|
(10,678)
|
|
|
1,856
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
14,809
|
|
|
1,856
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
4,131
|
|
|
$
|
—
|
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
|
331
|
|
|
$
|
1,163
|
Income
taxes
|
$
|
103
|
|
|
$
|
124
|
Non cash investing
activities:
|
|
|
|
Fixed asset purchases
in accounts payable
|
$
|
147
|
|
|
$
|
158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/core-molding-technologies-reports-strong-full-year-2020-results-301245290.html
SOURCE Core Molding Technologies, Inc.