COLUMBUS, Ohio, Aug. 6, 2021 /PRNewswire/ -- Core Molding
Technologies, Inc. (NYSE American: CMT) ("Core Molding", "Core" or
the "Company") today announced results for the second quarter
ended June 30, 2021.
The Company earned net income of $4.1
million, or $0.48 per share,
for the second quarter 2021 on net sales of $80.5 million. The Company's operating income as
a percent of net sales was 7.7% for the second quarter of 2021
compared to an operating loss as a percent of net sales of 3.2% for
the same period of 2020. Operating income as a percent of net
sales in the second quarter improved compared to the 7.3% achieved
in the first quarter of 2021.
Net sales increased 112.8% for the second quarter 2021 to
$80.5 million compared to
$37.8 million in the same period last
year. The increase in sales is primarily the result of higher
demand from customers in the heavy-duty truck, building product,
power sports and consumer product markets.
Net sales increased 51% to $153.3
million in the first half of 2021 compared to net sales of
$101.8 million in the first half of
2020. The Company had net income of $7.5 million, or $0.89 per share, for the first half of 2021
compared to $5.7 million, or
$0.69 per share in the first half of
2020. Net income for the first half of 2020 includes a
$5.7 million benefit from the
utilization of net operating losses.
"The second quarter of 2021 had supply chain challenges for both
the Company and our customers due to high global demand for many
raw materials, supply constraints resulting from the ramp up of the
economy coming out of the COVID-19 shutdown and weather-related
events that significantly reduced North American chemical
production," said David Duvall,
President and Chief Executive Officer. "I am proud of how our
team executed daily and hourly in keeping our plants supplied and
meeting our customers' high demand. Our performance is a clear
testament to our improved organizational strength and operational
processes that we have embedded into our company. Great
teamwork and disciplined execution allowed us to meet the strong
customer demand, with a turbulent supply base and accelerating raw
material costs to deliver the strong financial results," concluded
Duvall.
The Company generated cash flows from operations in excess of
$9.0 million in the second quarter of
2021 primarily from operating income and lower working capital. For
the first half of 2021 the Company generated $8.5 million of cash flows from operations.
Second quarter 2021 Compared to Second quarter 2020:
- Net sales were $80.5 million
compared to $37.8 million.
- Product sales were $79.1 million
compared to $35.8 million.
- Gross margin was 17.1% compared to 7.7%.
- Selling, general and administrative expenses were $7.6 million compared to $4.1 million.
- Operating income was $6.2 million
compared to operating loss of $1.2
million.
- Net income was $4.1 million, or
$0.48 per share, compared to net loss
of $2.3 million, or ($0.29) per share.
First half 2021 Compared to First half 2020:
- Net sales were $153.3 million
compared to $101.8 million.
- Product sales were $148.3 million
compared to $97.8 million.
- Gross margin was 17.3% compared to 13.4%.
- Selling, general and administrative expenses were $14.9 million compared to $10.6 million.
- Operating income was $11.5
million compared to operating income of $3.1 million.
- Net income was $7.5 million, or
$0.89 per share, compared to net
income of $5.7 million, or
$0.69 per share.
Gross margin was 17.1% of net sales for the three months ended
June 30, 2021, compared with 7.7% for
the three months ended June 30, 2020.
The gross margin percentage increase was related to favorable
product mix and production efficiencies of 6.1% and higher leverage
of fixed cost of 6.2% offset by net unfavorable changes in selling
prices and material costs of 2.9%. For the six months ended
June 30, 2021 gross margin improved
3.9 percentage points compared to the same period 2020. The gross
margin percentage increase was due to favorable product mix and
production efficiencies of 4.2% and higher fixed cost leverage of
3.1% offset by net unfavorable changes in selling prices and
material costs of 3.4%.
"Although raw material costs increased rapidly in the second
quarter and supply disruptions caused customer demand to fluctuate
with short notice, the team performed well managing through the
challenges. The negative impact of the higher raw material
costs was partially offset by our ability to pass through more than
50% of the raw material price increases to customers," said
Eric Palomaki, Executive Vice
President of Operations and Research and Development. "Our team
executed well in the second quarter and as a result we were able to
meet our customers' changing demand needs and show what a reliable
partner we are to our customers," concluded
Palomaki.
Second quarter 2021 selling, general and administrative expenses
increased $3.5 million compared to
the same period in 2020. The selling, general and
administrative expenses in 2020 were significantly reduced due to
the impact of COVID-19 shutdowns, cost savings initiatives and
receipt of government subsidies. Second quarter 2021 selling,
general and administrative expenses were $7.6 million, which is slightly higher than the
first quarter 2021 selling, general and administrative expenses of
$7.4 million, primarily due to our
investment in human capital to position the Company for long-term
profitable growth. "Our ability to attract and retain key talent
will continue to be a focus for us. We have a compelling story of
success to share with potential candidates, which will help us
attract like-minded individuals who want to be part of our winning
team," said Renee Anderson,
Executive Vice President of Human Resources.
Second quarter operating income improved to $6.2 million, or 7.7% of net sales, from an
operating loss of $1.2 million, or
3.2% of net sales, in the second quarter of 2020. "The Company
improved operating profitability to the highest level since the
first quarter of 2016, which reflects the capability of recent
improvements to operational systems at the Company to be able to
handle the supply chain challenges and demand disruptions during
the quarter while maintaining profitability," said John Zimmer, Executive Vice President and Chief
Financial Officer.
Financial Position at June 30,
2021:
- Cash and cash equivalents of $5.6
million
- Line of credit availability of $23.7
million
- Total assets of $188.4
million.
- Term loan and revolving debt of $26.8
million.
- Stockholders' equity of $102.1
million.
The Company's debt to equity ratio as of June 30, 2021 was 26.2%. "The Company reduced
total debt outstanding during the second quarter by $3.2 million, to $26.8
million, and improved its leverage ratio to 0.86 times from
1.27 times for the trailing twelve months EBITDA," said
Zimmer. "As a result of restructuring our debt in 2020, the
Company was able to reduce its interest expense by $0.6 million in the second quarter and
$1.2 million for the first half of
2021 compared to the same periods in 2020," concluded
Zimmer.
Outlook
Looking forward, based on industry analysts'
projections and customer forecasts, the Company expects sales
levels for the second half of 2021 to increase compared to the
second half of 2020. In the Company's largest market, North
American heavy-duty truck, ACT Research is forecasting production
to increase approximately 37%. In several other industries the
Company serves, customers are forecasting higher demand in 2021
including the power sports, industrials and utilities markets. The
Company has experienced disruptions in demand from our customers as
their supply chain challenges have caused them to temporarily stop
production at times. Although we anticipate increased sales in
the second half of 2021, the Company anticipates customer supply
chain disruptions will continue to affect the Company's sales for
the remainder of 2021.
The Company has experienced raw material inflation due to
ongoing raw material shortages and supply chain
disruptions. Although supply chain disruptions are decreasing,
the Company anticipates increased raw material costs to continue
through the remainder of 2021. The Company foresees recouping
some, but not all of the raw material price
increases.
"The Company delivered strong performance in the second quarter
by meeting customer requirements and improving profitability. Our
focus on organizational resilience and execution excellence, our
robust operating systems and our dedicated engaged team made this
achievement possible," said Duvall. "The Company has made progress
in its Core business transformation strategy and has already seen
results from one of the key strategic elements, Technical Solution
Sales. Core Molding has one of the largest portfolios of
processes in the engineered plastics and composite
market. Aligning our technical and sales resources and systems
allows us to integrate our large portfolio of processes into high
value solutions, instead of a product that meets a print. This has
enabled us to grow our opportunity pipeline and win more than
$15 million in new business this
year," 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
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'
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 Quarterly Report
on Form 10-Q: 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
the Annual Report on Form 10-K for the year ended December 31, 2020.
Company Contact:
John
Zimmer
Exec Vice President & Chief Financial Officer
614-870-5604
jzimmer@coremt.com
(See Accompanying Tables)
CORE MOLDING
TECHNOLOGIES, INC.
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(in thousands,
expect per share data)
|
|
|
Three Months
Ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net
sales:
|
|
|
|
|
|
|
|
Products
|
$
|
79,117
|
|
|
|
$
|
35,847
|
|
|
|
$
|
148,251
|
|
|
|
$
|
97,777
|
|
Tooling
|
1,344
|
|
|
|
1,959
|
|
|
|
5,039
|
|
|
|
4,053
|
|
Total net
sales
|
80,461
|
|
|
|
37,806
|
|
|
|
153,290
|
|
|
|
101,830
|
|
|
|
|
|
|
|
|
|
Total cost of
sales
|
66,725
|
|
|
|
34,903
|
|
|
|
126,836
|
|
|
|
88,161
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
13,736
|
|
|
|
2,903
|
|
|
|
26,454
|
|
|
|
13,669
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
7,563
|
|
|
|
4,109
|
|
|
|
14,935
|
|
|
|
10,614
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
6,173
|
|
|
|
(1,206)
|
|
|
|
11,519
|
|
|
|
|
3,055
|
|
|
|
|
|
|
|
|
|
Other income and
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
584
|
|
|
|
1,197
|
|
|
|
1,163
|
|
|
|
2,371
|
|
Net periodic
post-retirement benefit cost
|
(40)
|
|
|
|
(20)
|
|
|
|
(80)
|
|
|
|
(40)
|
|
Total other
expense
|
544
|
|
|
|
1,177
|
|
|
|
1,083
|
|
|
|
2,331
|
|
|
|
|
|
|
|
|
|
Income (loss)
before taxes
|
5,629
|
|
|
|
(2,383)
|
|
|
|
10,436
|
|
|
|
724
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
1,543
|
|
|
|
(111)
|
|
|
|
2,894
|
|
|
|
(4,965)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
4,086
|
|
|
|
$
|
(2,272)
|
|
|
|
$
|
7,542
|
|
|
|
$
|
5,689
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.48
|
|
|
|
$
|
(0.29)
|
|
|
|
$
|
0.89
|
|
|
|
$
|
0.69
|
|
Diluted
|
$
|
0.48
|
|
|
|
$
|
(0.29)
|
|
|
|
$
|
0.89
|
|
|
|
$
|
0.69
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
8,002
|
|
|
|
7,916
|
|
|
|
7,994
|
|
|
|
7,899
|
|
Diluted
|
8,014
|
|
|
|
7,916
|
|
|
|
8,013
|
|
|
|
7,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
thousands)
|
|
As of
06/30/2021
(Unaudited)
|
|
As of
12/31/2020
|
Assets:
|
|
|
|
|
Cash
|
|
$
|
5,596
|
|
|
|
$
|
4,131
|
|
Accounts Receivable,
net
|
|
44,654
|
|
|
|
27,584
|
|
Inventories,
net
|
|
22,039
|
|
|
|
18,360
|
|
Other Current
Assets
|
|
6,493
|
|
|
|
6,403
|
|
Right of Use
Asset
|
|
3,985
|
|
|
|
2,754
|
|
Property, Plant and
Equipment, net
|
|
74,613
|
|
|
|
74,052
|
|
Goodwill
|
|
17,376
|
|
|
|
17,376
|
|
Intangibles,
net
|
|
10,542
|
|
|
|
11,516
|
|
Other Long-Term
Assets
|
|
3,132
|
|
|
|
3,332
|
|
Total
Assets
|
|
$
|
188,430
|
|
|
|
$
|
165,508
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current Portion of
Long-Term Debt
|
|
$
|
3,352
|
|
|
|
$
|
2,535
|
|
Revolving
Debt
|
|
200
|
|
|
|
420
|
|
Accounts
Payable
|
|
26,423
|
|
|
|
16,994
|
|
Compensation and
Related Benefits
|
|
9,140
|
|
|
|
8,305
|
|
Accrued Other
Liabilities
|
|
10,919
|
|
|
|
6,322
|
|
Lease
Liability
|
|
4,017
|
|
|
|
2,693
|
|
Long-Term
Debt
|
|
23,243
|
|
|
|
25,198
|
|
Post Retirement
Benefits Liability
|
|
9,033
|
|
|
|
9,109
|
|
Stockholders'
Equity
|
|
102,103
|
|
|
|
93,932
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
188,430
|
|
|
|
$
|
165,508
|
|
|
Six months
ended
|
|
|
June
30,
|
|
|
2021
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
7,542
|
|
|
$
|
5,689
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
6,161
|
|
|
5,588
|
|
Deferred income
tax
|
—
|
|
|
517
|
|
Share-based
compensation
|
804
|
|
|
704
|
|
Losses (gains) on
foreign currency
|
188
|
|
|
(45)
|
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(17,070)
|
|
|
10,842
|
|
Inventories
|
(3,679)
|
|
|
5,457
|
|
Prepaid and other
assets
|
110
|
|
|
(3,667)
|
|
Accounts
payable
|
9,119
|
|
|
(7,910)
|
|
Accrued and other
liabilities
|
5,557
|
|
|
1,438
|
|
Post retirement
benefits liability
|
(236)
|
|
|
(130)
|
|
Net cash provided
by operating activities
|
8,496
|
|
|
18,483
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(5,387)
|
|
|
(1,644)
|
|
Net cash used in
investing activities
|
(5,387)
|
|
|
(1,644)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Gross repayments on
revolving line of credit
|
(9,507)
|
|
|
(59,357)
|
|
Gross borrowings on
revolving line of credit
|
9,287
|
|
|
47,349
|
|
Payment of deferred
loan costs
|
(2)
|
|
|
—
|
|
Payments related to
the purchase of treasury stock
|
(47)
|
|
|
—
|
|
Proceeds from term
loan
|
—
|
|
|
175
|
|
Payment of principal
on term loans
|
(1,375)
|
|
|
(2,258)
|
|
Net cash used in
financing activities
|
(1,644)
|
|
|
(14,091)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
1,465
|
|
|
2,748
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
4,131
|
|
|
1,856
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
5,596
|
|
|
$
|
4,604
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
|
935
|
|
|
$
|
2,377
|
|
Income
taxes
|
$
|
3,503
|
|
|
$
|
302
|
|
Non cash investing
activities:
|
|
|
|
Fixed asset purchases
in accounts payable
|
$
|
99
|
|
|
$
|
146
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
|
2021
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
4,086
|
|
|
$
|
(2,272)
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,112
|
|
|
2,765
|
|
Share-based
compensation
|
486
|
|
|
388
|
|
Losses (gains) on
foreign currency
|
(47)
|
|
|
29
|
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(4,452)
|
|
|
6,453
|
|
Inventories
|
(1,666)
|
|
|
3,407
|
|
Prepaid and other
assets
|
(193)
|
|
|
1,215
|
|
Accounts
payable
|
836
|
|
|
(466)
|
|
Accrued and other
liabilities
|
6,942
|
|
|
1,622
|
|
Post retirement
benefits liability
|
(96)
|
|
|
(37)
|
|
Net cash provided
by operating activities
|
9,008
|
|
|
13,104
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(2,951)
|
|
|
(1,188)
|
|
Net cash used in
investing activities
|
(2,951)
|
|
|
(1,188)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Gross repayments on
revolving line of credit
|
(3,592)
|
|
|
(20,543)
|
|
Gross borrowings on
revolving line of credit
|
791
|
|
|
12,767
|
|
Proceeds from term
loan
|
—
|
|
|
175
|
|
Payment of principal
on term loans
|
(687)
|
|
|
(1,133)
|
|
Net cash used in
financing activities
|
(3,488)
|
|
|
(8,734)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
2,569
|
|
|
3,182
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
3,027
|
|
|
1,422
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
|
5,596
|
|
|
$
|
4,604
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
|
468
|
|
|
$
|
1,289
|
|
Income
taxes
|
$
|
943
|
|
|
$
|
117
|
|
Non cash investing
activities:
|
|
|
|
Fixed asset purchases
in accounts payable
|
$
|
99
|
|
|
$
|
146
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/core-molding-technologies-reports-q2-2021-results-301350101.html
SOURCE Core Molding Technologies, Inc.