COLUMBUS, Ohio, March 7, 2018 /PRNewswire/ -- Core Molding
Technologies, Inc. (NYSE American: CMT) ("Core Molding" or the
"Company") today announced results for the fourth quarter and full
year ended December 31, 2017.
"The Company continued to see a rebound in product sales in the
fourth quarter of 2017," stated Kevin
Barnett, Core Molding Technologies President and Chief
Executive Officer. "Our product sales in the fourth quarter 2017
were up 13% compared to the fourth quarter of last year as a result
of stronger demand from our heavy-duty truck and marine customers
and sales from new products launched during 2017. Overall, total
net sales were lower in both the fourth quarter and for the full
year 2017 when compared to 2016, due to a sizeable decrease in
tooling sales that are project based and sporadic in nature.
We are disappointed that the higher product sales in
the fourth quarter 2017 did not result in higher profitability as
we experienced inefficiencies as a result of both the increase in
overall volume and challenging new product startups."
Fourth Quarter 2017 Compared to Fourth Quarter 2016:
- Net sales were $39.1 million
compared to $49.1 million.
- Product sales were $37.9 million
compared to $33.5 million.
- Gross margin was 13.0% compared to 14.6%.
- Operating income was $0.8 million
compared to $3.1 million.
- Net income was $0.8 million, or
$0.10 per diluted share, compared
with $2.0 million, or $0.26 per diluted share.
Year ended 2017 Compared to Year ended 2016:
- Net sales were $161.7 million
compared to $174.9 million.
- Product sales were $148.6 million
compared to $146.6 million.
- Gross margin was 15.3% compared to 16.0%.
- Operating income was $8.0 million
compared to $11.5 million.
- Net income was $5.5 million, or
$0.70 per diluted share, compared
with $7.4 million, or $0.97 per diluted share.
Gross margin decreased in the fourth quarter 2017 compared to
the same period in 2016 primarily due to higher raw material and
labor costs. The Company received raw material price
increases from several vendors primarily driven by underlying cost
pressures. Labor costs were impacted by tighter labor
markets, training and overtime related to multiple new program
launches, volume ramp and other production inefficiencies. The
fourth quarter was also impacted by $600,000 of transaction costs related to the
acquisition of Horizon Plastics International, Inc. ("Horizon
Plastics") completed in January 2018.
The Tax Cuts and Job Act enacted on December
22, 2017 had a positive impact on net income for the fourth
quarter and full year 2017 of $185,000, or $.02
per share.
Financial Position at December 31,
2017:
- Cash and cash equivalents of $26.8
million.
- Total assets of $137.6
million.
- Total debt of $6.8 million.
- Stockholders' equity of $101.9
million.
The Company's financial position remains very healthy with
stockholders' equity exceeding $100
million at year-end for the first time ever.
Outlook
Mr. Barnett stated, "Product revenues in 2017 stabilized
compared to 2016, which saw a year over year decrease in product
revenues of 22%. In 2018, we expect product sales to increase
versus 2017, driven largely by further strengthening in demand by
heavy-duty truck and marine customers. Industry sources
forecast an increase in heavy-duty truck production levels for 2018
of approximately 25%. We anticipate that raw material prices
will remain elevated and that labor conditions will remain tight as
the economy continues to grow. However, we are focused on improving
our operational performance, including product startup
inefficiencies, as we move forward."
Mr. Barnett concluded, "We have started integration of our
recently announced acquisition of Horizon Plastics and are excited
about the opportunities the acquisition brings to our combined
organization. The acquisition met several of our strategic
goals including diversifying our end markets, expanding our
material and process offerings and increasing our geographic
reach. We look forward to successfully bringing our combined
technologies to both our traditional markets and to those opened by
this acquisition."
Dividend
The Company's Board of Directors declared a quarterly cash
dividend of $0.05 per share payable
on March 29, 2018 to shareholders of
record on March 19, 2018.
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. Effective January 16, 2018, the Company acquired Horizon
Plastics, which increased the Company's process capabilities to
include structural foam and structural web molding production and
added two new locations. 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," "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 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 and
Canada; 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, including the recent acquisition of Horizon Plastics;
the risk that the integration of Horizon Plastics may be more
difficult, time-consuming or costly than expected; expected revenue
synergies and cost savings from acquisition of Horizon Plastics may
not be fully realized within the expected timeframe; revenues
following the acquisition of Horizon Plastics may be lower than
expected; customer and employee relationships and business
operations may be disrupted by the acquisition of Horizon Plastics;
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 2016 Annual Report on Form
10-K.
Company
Contact: John
Zimmer Vice President &
Chief Financial Officer 614-870-5604 jzimmer@coremt.com
|
(See Accompanying Tables)
CORE MOLDING
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Income (Unaudited)
(in thousands,
expect per share data)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
sales:
|
|
|
|
|
|
|
|
Products
|
$
|
37,900
|
|
|
|
$
|
33,465
|
|
|
|
$
|
148,623
|
|
|
|
$
|
146,624
|
|
|
Tooling
|
1,165
|
|
|
|
15,607
|
|
|
|
13,050
|
|
|
|
28,258
|
|
|
Total net
sales
|
39,065
|
|
|
|
49,072
|
|
|
|
161,673
|
|
|
|
174,882
|
|
|
|
|
|
|
|
|
|
|
Total cost of
sales
|
33,992
|
|
|
|
41,915
|
|
|
|
136,993
|
|
|
|
146,958
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
5,073
|
|
|
|
7,157
|
|
|
|
24,680
|
|
|
|
27,924
|
|
|
|
|
|
|
|
|
|
|
Total selling,
general and administrative expense
|
4,240
|
|
|
|
4,018
|
|
|
|
16,690
|
|
|
|
16,379
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
833
|
|
|
|
3,139
|
|
|
|
7,990
|
|
|
|
11,545
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
53
|
|
|
|
65
|
|
|
|
245
|
|
|
|
298
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
780
|
|
|
|
3,074
|
|
|
|
7,745
|
|
|
|
11,247
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
26
|
|
|
|
1,042
|
|
|
|
2,286
|
|
|
|
3,836
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
754
|
|
|
|
$
|
2,032
|
|
|
|
$
|
5,459
|
|
|
|
$
|
7,411
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.10
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.97
|
|
|
Diluted
|
$
|
0.10
|
|
|
|
$
|
0.26
|
|
|
|
$
|
0.70
|
|
|
|
$
|
0.97
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
7,711
|
|
|
|
7,635
|
|
|
|
7,690
|
|
|
|
7,621
|
|
|
Diluted
|
7,768
|
|
|
|
7,699
|
|
|
|
7,747
|
|
|
|
7,661
|
|
|
Condensed
Consolidated Balance Sheets
(in
thousands)
|
|
|
|
As of
12/31/2017
|
|
As of
12/31/2016
|
Assets:
|
|
|
|
|
Cash
|
|
$
|
26,780
|
|
|
$
|
28,285
|
|
Accounts Receivable,
net
|
|
19,846
|
|
|
19,551
|
|
Inventories,
net
|
|
13,459
|
|
|
10,912
|
|
Tooling in
Progress
|
|
1,917
|
|
|
-
|
|
Other Current
Assets
|
|
1,998
|
|
|
1,140
|
|
Property, Plant and
Equipment, net
|
|
68,631
|
|
|
70,601
|
|
Goodwill and
Intangibles, net
|
|
2,916
|
|
|
2,966
|
|
Other Long-term
Assets
|
|
2,076
|
|
|
-
|
|
Total
Assets
|
|
$
|
137,623
|
|
|
$
|
133,455
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
|
|
Current Portion of
Long-term Debt
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Accounts
Payable
|
|
13,850
|
|
|
8,534
|
|
Compensation and
Related Benefits
|
|
3,524
|
|
|
5,004
|
|
Tooling in
Progress
|
|
-
|
|
|
1,084
|
|
Accrued Liabilities
and Other
|
|
2,161
|
|
|
2,658
|
|
Long-Term
Debt
|
|
3,750
|
|
|
6,750
|
|
Deferred Tax
Liability
|
|
395
|
|
|
992
|
|
Post Retirement
Benefits Liability
|
|
9,050
|
|
|
8,667
|
|
Stockholders'
Equity
|
|
101,893
|
|
|
96,766
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
137,623
|
|
|
$
|
133,455
|
|
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SOURCE Core Molding Technologies, Inc.