SOUTHWEST IDEAS CONFERENCE November 2024
SAFE HARBOR STATEMENTS AND NON-GAAP FINANCIAL MEASURES 2 Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the federal securities laws, which are subject to the "safe harbor" created by Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").. 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 presentation: business conditions in the plastics, transportation, power sports, utilities 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; 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 and labor availability as well as possible work stoppages or labor disruptions at one or more 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 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 December 31, 2023 Annual Report on Form 10-K. This presentation includes certain non-GAAP financial measures to describe our performance. The reconciliation of those measure to GAAP measures are provided within the appendix of the presentation. Those disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
US 44% Canada 16% Mexico 40% CORE MOLDING TECHNOLOGIES The most reliable, innovative and responsive partner in engineered materials and manufacturing solutions: SOLUTION | INNOVATION | MANUFACTURING Diversified Portfolio with Long Term Customer Relationships Building Products Industrial & Utilities Power Sports Transportation (1) Based on 2023 sales by Core production location. 2023 Sales By Country $358M(1) Headquartered in Columbus, OH Employees 1,857 NYSE American CMT Founded in 1980 Adjusted EBITDA 12 Months Ended December 31, 2023 = $42.3M (2) 3 (2) Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled later in this presentation.
✓ Market Leadership Position ✓ Few competitors, high barriers to entry ✓ Large Addressable Market ✓ Long-term relationships with blue-chip companies ✓ Proprietary, Highly-Engineered Products ✓ Single source, technical solutions of structural systems ✓ Product innovation expertise with product design, functionality & durability ✓ 90% recurring revenues, strong TTM Earnings, Adjusted EBITDA and Return on Capital INVESTMENT HIGHLIGHTS 4
> $10B ADDRESSABLE MARKET • Grow wallet share with large customers • Multiple industry channel expansion $2.6B Grow • Market leader in truck & powersports • Focus on higher value solutions Based on management estimates with current process portfolio. Industry Dynamics $2.3B Grow $1.9B Grow $1.9B Grow $0.6B Defend $0.3B Grow $0.5B Defend / Grow Powersports / Golf Cars Building Products Industrial & Utilities Packaging Consumer Products Truck Construction & Ag. • Infrastructure spending bills • ESG solutions for customers • Market specific internal sales force • Partner with third party sales agency to drive lead generation and opportunities into new sales channels
LARGE NORTH AMERICAN MANUFACTURING FOOTPRINT 16.0% 33.0% 23.0% 15.0% 6.0% 7.0% Columbus, OH Matamoros, MX Cobourg, Ontario Winona, MN Gaffney, SC Monterrey, MX 82 presses >1.3M Square Feet Product Sales by Facility* *Based on 2023 Product Sales 6
INDUSTRY AND CUSTOMER DIVERSIFICATION 52% Truck 24% Power Sports 8% Building Products 16% Industrial, Utilities & Other 2023 Net Product Sales By Industry Truck Powersport Building Products Industrial and UtilitiesLong-term relationships with blue-chip companies providing single-source manufacturing arrangements with key customers 7
HOW WE DIVERSIFY 8 Building Products Industrial & Utilities Power Sports Transportation Light Weighting | Durability | Cost Savings | Corrosion Resistance | Parts Consolidation | Recyclability
23 Driving Core Molding to the Next Level Invest For Growth 1. Sales Force Development • Invest in Sales Function • Focus on Grow Wallet Share with high value solutions 2. Strengthen Core’s Technology functions • Expertise to solve Customer Problems 3. Acquisitions • Sales Channel Access • Footprint expansion • Complimentary Technology and Resources ➢ We have an organization and plants prepared for organic growth ➢ We are profitable and have cash to invest (acquisition and assets) ➢ Driving Voice of the Customer into the organization, understand the customer’s problems to solve 9
1. Grow Wallet Share • Leveraging our deep and long term customer relationships, using our large portfolio of processes, is our fastest and easiest growth path. • Dedicated Key Account Managers to deeply engage with strategic large opportunity customers that can benefit from thermosets and thermoplastics. “Intimately know the customer” 2. Solve Customer problems • Strengthen technical resources to support solution development with customers • We are the expert in bringing the customer’s ideas to production. “Be first in the customer’s mind when they need a solution” • Implement business systems that drive VOC into the business planning processes 3. Industry Diversification • Formalized systems to deeply understand the potential market applications and then positioning Core to capitalize on high growth industries to target customers. • Sales Channel Development: Acquisition and Organic CORE STRATEGY HOUSE 2.0 : INVEST FOR GROWTH VISION VISION To be the most reliable, innovative and responsive partner in engineered material and manufacturing solutions “ ” Values: Learning Organization, Courage to Challenge, Mutual Respect, Transparency - Accountable for Results - Never a Victim - Earn Customer trust and inspire confidence in our team - Embrace challenges and make it easy for the customer - Integrated partner with customer - Understand the Customers problems - Provide HOW for the customers WHAT - Stability of the business through diversification of revenue streams - Focus on Large / Ultra-Large products - Industries / Customers that value manufacturing solution partners - Disciplined, data driven problem solving - Eliminate waste - 6S in everything we do - Visual KPI’s to highlight abnormalities - Automated information systems - Be first in the customers’ mind when they need a manufacturing solution - Expand customer partnerships - Geographic growth with large industry leaders Business Execution Excellence Maximize ROCE - Industry Leading Profitability - Grow Long Term Shareholder Value “Culture as a Competitive Advantage” Solve Customer Problems Industry Diversification Operational Excellence Grow Wallet Share 10
New Sales Growth 11 $9.4 $15.1 $10.1 $29.4 $0 $5 $10 $15 $20 $25 $30 H1 H2 2025 2026 Program Launches by year ($M Annualized) New Business Replacement Business Vehicle Medical Portable SecurityMarine Docks EV Battery Trays Refrigerated Display Bases
INTEGRATED MATERIALS AND PROCESSES FROM ONE SUPPLIER 12 High Strength to Weight • High performance vs cost = Value • Durability and corrosion resistance Innovative Material & Process Development • Large format / One-piece design • Design Flexibility • Value Added Features Lightweight = Lower Total Costs • Total installation cost 15% lower • 10X faster installation Multi-Composite Design Flexibility • High value integrated design: Unique Solutions • Increased strength / durability
LIGHT WEIGHTING 13 Multiple Benefits from Lightweight Parts: ✓ Easier installation ✓ Reduced Labor ✓ Improved Employee Safety / Reduced Injuries / OSHA ✓ On site modifications ✓ Reduced need for onsite installation equipment ✓ Saves 80% CO2 emissions vs concrete equivalent ✓ Lower overall cost Polymer Concrete 90 Lbs. Composite 25 Lbs. Concrete 300 Lbs. Composite 40 Lbs.
PART CONSOLIDATION / SOLUTIONS 14 Multiple Benefits from a Solution with Part Consolidation: ✓ Unique Solutions creating an optimized design ✓ Simplified assembly / Reduced Labor for the customer ✓ Integrated with the customer development (Early in the development process) ✓ Unique capability to create large format products • 3X higher strength, 30Lbs lighter, 60% less labor to install 43 Parts 1 Part • All fasteners, engine mounts and transducer molded into 1 part • Fiber reinforced tape molded into side for side impact strength
Why Core Molding? – Engaged teams make it happen! Culture As A Competitive Advantage: Holistic approach to purposefully create an engaged knowledgeable team that wants to win and feels empowered to win. • Team that lives up to commitments and enjoys what we do. • Culture of continuous improvement and delivering to the customer needs. Core 8.6% Industry Avg. 23.3% Employee Turnover 0.0% 10.0% 20.0% 30.0% 1 • Long term trusted partner with industry leaders supplying similar products (BRP, Yamaha, Polaris…) • 2023 BRP Gold Supplier Award • 2023 PACCAR 10PPM Award > 99% > 99% 15
Why Core Molding? –Difficult and Ultra Large Products We are an Industry leader in Composite product design / manufacturing • CAMX 2023 Material & Process Innovation Award nomination • Multi-Composite Design Flexibility • 82 Presses • 7 DLFT systems in 2 different location • Co-development, product design and manufacture to optimize products for performance and cost. • Molded in hardware (labor reduction) • Part consolidation (labor & part reduction) 43 Parts 1 Part • Capability to design and develop manufacturing solutions for large / ultra-large complex products that are Hard To Do. • Large and growing portfolio of complementary processes, capable NA footprint and deep expertise of producing in MX. • Cobourg, Ontario • Winona, MN • Gaffney, SC • Columbus, OH • Matamoros, MX • Monterrey, MX • Brownsville, TX 16
17 FINANCIALS
CAPITAL ALLOCATION STRATEGY 18 Organic Growth • Capital investments meeting Company’s return requirements • Projected capital spend in 2024 of $11- $13mm • R&D spending M&A • Tuck in acquisitions • Valuations of $10 - $40 million • One to two acquisitions a year • Disciplined evaluation process to identify appropriate opportunities Return Capital to Shareholders • Share repurchase is preferred method • Authorized $7.5mm share repurchase program in place • Approximately 135k shares @ $17.40 per share repurchased in 2024 Maintain Strong Balance Sheet • Zero net debt • Current leverage ratio of ~.6 times Adjusted EBITDA • Available liquidity flexibility to take advantage of opportunities Multifaceted allocation strategy to maximize shareholder value
SELECTED FINANCIAL INFORMATION 19 • Impact of economic slowdown reducing customer demand in 2024 • Company focus on operational improvements and portfolio profitability driving higher earnings • Adjusted EBITDA as % of sales increased to 11.0% • Disciplined capital deployment approach resulting in increased ROCE • Excluding ~ $42mm of accumulated cash to be redeployed for TTM September 30, 2024, ROCE = 14.4% $222 $308 $377 $358 $314 $0 $50 $100 $150 $200 $250 $300 $350 $400 2020 2021 2022 2023 TTM Sept 30, 2024 Total Sales in millions $22.6 $26.7 $31.9 $42.3 $34.4 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% $0 $10 $20 $30 $40 $50 2020 2021 2022 2023 TTM Sept 30, 2024 Adj EBITDA in millions / % of Sales (1) Adj EBITDA EBITDA % 8.5% 10.5% 12.7% 16.4% 10.8% 0% 5% 10% 15% 20% 2020 2021 2022 2023 TTM Sept 30, 2024 Return on Capital Employed (ROCE) (1) 14.4% (2) (1) Adjusted EBITDA and ROCE are non-GAAP financial measure as defined and reconciled later in this presentation. (2) ROCE excluding accumulated cash.
in millions Operating Cash Flows Sustaining Capex Growth Capex Free Cash Flows Free Cash Flows Excluding Growth Capex 2021 12.5$ 6.3$ 5.1$ 1.1$ 6.2$ 2022 19.0$ 7.8$ 8.8$ 2.4$ 11.2$ 2023 34.8$ 6.1$ 3.0$ 25.7$ 28.7$ Total 66.3$ 20.2$ 16.9$ 29.2$ 46.1$ 3 Year Avg. 22.1$ 6.7$ 5.6$ 9.7$ 15.4$ Nine Months Ended Sept 30, 2024 30.2$ 6.0$ 1.1$ 23.1$ 24.2$ CASH FLOWS AND REINVESTMENT 20 Three Year Summary ~$66M Operating cash flow $29M free cash flows $17M Reinvestment to support Company growth excluding growth capex $46M Capacity in place to support $425 to $475 million of revenues
LONG TERM FINANCIAL GOALS Revenues Operating Income Return on Capital Employed December 2023 3 – 5 Years $358MM 7.4% 16.4% >$500MM • Organic growth • Acquisitions • Goal timing may be impacted due to return to pre-pandemic demand levels 8%-10% • Operational improvements • Value selling • Leverage fixed costs 14%-16% • Investment in capacity and automation • Acquisitions • Working Capital Management 21
CONTACTS 22 Company Contact John Zimmer Chief Financial Officer jzimmer@coremt.com Investor Contact Sandy Martin / Steven Hooser Three Part Advisors 214.616.2207
APPENDIX 23
NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION (1) Includes net interest expense, non-cash periodic post retirement costs and loss on extinguishment of debt. (2) Reflects Cincinnati facility closing. Reconciliation of GAAP to Non-GAAP Financial Measures * Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation and amortization of long-lived assets, (iv) share based compensation expense, (v) non-reoccurring charges including restructuring costs, plant closure costs, goodwill impairment charges, (vi) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. This metrics is a supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. This measure has limitations as an analytical tool and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA because management uses this measure as key performance indicators, and we believe that securities analysts, investors and others use this measure to evaluate companies in our industry. Our calculation of this measure may not be comparable to similarly named measures reported by other companies. The above table presents a reconciliation of net income (loss), the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA for the periods presented. 24 In thousands 2015 2016 2017 2018 2019 2020 2021 2022 2023 TTM Sept 30 2024 Net income (loss) 12,050$ 7,411$ 5,459$ (4,782)$ (15,223)$ 8,165$ 4,671$ 12,203$ 20,324$ 15,520$ Income tax expense (benefit) 6,118$ 3,836$ 2,286$ (664)$ (355)$ (3,618)$ 4,248$ 2,382$ 5,422$ 3,225$ Other expenses (1) 330$ 298$ 245$ 2,394$ 4,144$ 5,923$ 2,149$ 3,418$ 791$ (402)$ Depreciation and amortization 6,041$ 6,283$ 6,240$ 9,384$ 10,376$ 10,775$ 11,130$ 11,603$ 12,831$ 13,271$ Share-based compensation 785$ 1,003$ 1,331$ 1,743$ 1,564$ 1,355$ 1,886$ 2,329$ 2,923$ 2,767$ Goodwill impairment -$ -$ -$ 2,403$ 4,100$ -$ -$ -$ -$ -$ Plant closure costs(2) -$ -$ -$ -$ -$ -$ 2,581$ -$ -$ -$ Adjusted EBITDA* 25,324$ 18,831$ 15,561$ 10,478$ 4,606$ 22,600$ 26,665$ 31,935$ 42,291$ 34,381$ Twelve Months Ended December 31,
YEAR-END AND RETURN ON CAPITAL EMPLOYED (“ROCE”) RECONCILIATION 25 . Reconciliation of GAAP to Non-GAAP Financial Measures * Return on Capital Employed represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) restructuring and plant closure costs, (iv) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations divided by Total Capital Employed which includes (i) Shareholders’ Equity, (ii) term debt, and (iii) revolving debt. This metrics is a supplemental measure of our operating performance that are neither required by, nor presented in accordance with, GAAP. This measure has limitations as an analytical tool and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. We present ROCE because management uses this measure as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of this measure may not be comparable to similarly named measures reported by other companies. 2020 2021 2022 2023 TTM Sept 30, 2024 TTM Sept 30, 2024 (2) in thousands in thousands EBIT 10,390$ 11,068$ 18,003$ 26,537$ 18,343$ EBIT 18,343$ Plant Closure Costs (1) 2,581 Plant Closure Costs (1) Adjusted EBIT 10,390$ 13,649$ 18,003$ 26,537$ 18,343$ Adjusted EBIT 18,343$ 2020 2021 2022 2023 TTM Sept 30, 2024 TTM Sept 30, 2024 Shareholders' Equity 93,932$ 100,095$ 116,125$ 138,953$ 147,840$ Shareholders' Equity 147,840$ Debt Debt Short Term Portion of Term Debt 2,535 3,943 1,208 1,468 1,814 Short Term Portion of Term Debt 1,814 Long Term Portion of Term Debt 25,198 21,251 22,986 21,519 20,164 Long Term Portion of Term Debt 20,164 Revolver 420 4,424 1,864 - - Accumulated Cash (42,348) Total Capital Employed 122,085$ 129,713$ 142,183$ 161,940$ 169,818$ Total Capital Employed 127,470$ ROCE 8.5% 10.5% 12.7% 16.4% 10.8% ROCE 14.4% (1) Reflects Cincinnati facility closing (2) ROCE excluding accumulated cash for TTM Sept 30, 2024 December 31,