CORE MOLDING TECHNOLOGIES, INC.
2024
ANNUAL
REPORT
SELECTED FINANCIAL HIGHLIGHTS (dollars in millions except per share numbers)
YEARS ENDED DECEMBER 31
2024
2023
2022
2021
2020
Net Sales
302.4
357.7
377.4
307.5
222.4
Operating Income
16.7
26.5
18.0
11.1
10.4
Net Income
13.3
20.3
12.2
4.7
8.2
Net Income per common share: Basic
1.53
2.37
1.44
0.55
0.98
Net Income per common share: Diluted
1.51
2.31
1.44
0.55
0.98
Stockholders’ equity
147.4
139.0
116.1
100.1
93.9
Core Molding Technologies, Inc. and its subsidiaries operate in
the engineered materials market as one operating segment as
a molder of thermoplastic and thermoset structural products.
The Company produces and sells molded products for varied
markets, including medium and heavy-duty trucks, automobiles,
power sports, construction and agriculture, building products
and other commercial markets. Core Molding Technologies has
its headquarters in Columbus, Ohio, and operates six production
facilities in three countries, the United States, Canada and Mexico.
CORE MOLDING TECHNOLOGIES, INC.
ANNUAL REPORT TO SHAREHOLDERS
2024
2024 Highlights
First and foremost, I want to express my sincere gratitude to our employees for their dedication and
hard work throughout the year. 2024 has been a transformative year for Core Molding, where we have
successfully demonstrated the strength of our business model and organizational excellence. Our
primary focus leading up to this year was on transforming our business—creating an organization that
executes with precision, operates on a strong and scalable platform, and delivers sustained
profitability. Our results speak for themselves:
Record cash flows from operations of $35.2 million.
Maintained gross margins within our targeted range of 17-19%, even amidst reduced demand.
Secured over $45 million in new business, set to launch in the second half of 2025 and early
2026.
Recognized for excellence, receiving the BRP Gold Supplier Award and the PACCAR 10 PPM
award for outstanding delivery, quality, and service.
Invested in organizational development, advancing leadership and technical training programs,
internships, and our Women@Core initiative—reinforcing our belief that culture is a
competitive advantage.
o Our voluntary employee turnover remained below 7%, and our internal promotion rate
exceeded 39%, demonstrating our commitment to people development.
Enhanced our sales organization, appointing Alex Bantz as Chief Commercial Officer and
expanding our team of Account Managers to better serve our customers and penetrate new
markets.
Our transformation journey was built on a structured approach—focusing first on organizational
excellence, then operational strength, and finally portfolio profitability. With these foundations firmly
in place, we are now shifting our focus to our next strategic priority: Investing for Growth in 2025.
Looking Ahead: 2025 – Investing for Growth
While market demand and product sales declined in 2024, we anticipate a rebound in the second half
of 2025 as our newly secured $45 million in business comes online, coinciding with an expected truck
industry upswing. Despite short-term headwinds, our commitment to growth remains unwavering. In
fact, our incremental new business wins of $24 million translates to an 8% sales growth compared to
2024 net sales —a promising trajectory.
Growth—both organic and inorganic—is now our relentless focus. Invest for Growth is our guiding
principle for 2025, and we have positioned Core Molding to capitalize on the opportunities ahead.
With a strong organizational foundation, ample assets, and healthy cash reserves, we are poised to take
decisive action. Our growth strategy is structured around three fundamental pillars:
1. Expanding Business with Existing Customers
o We are actively increasing our engagement in the early design phase with our largest
customers, helping them unlock the full value of our diverse manufacturing capabilities
in thermoplastics and thermosets.
o Our Voice of the Customer (VOC) initiative has led to strategic investments, such as
our new top-coat paint capability in Matamoros—aligning with our efforts to open
additional opportunities to serve high-potential markets like construction equipment,
aerial lifts, and agricultural machinery.
2. Accelerating Business Diversification
o We have successfully entered high-growth industries, including construction, industrial,
energy, and medical, and are committed to further expansion.
o Our focus is on identifying high-potential products and customers while demonstrating
our ability to deliver technical solutions that solve industry challenges.
o Increased participation in trade shows, industry groups, and targeted sales efforts is
driving greater lead generation, while our deep expertise in producing large, structural,
and complex parts gives us a competitive edge.
o Our recent major win in the construction sector—supplying compounded SMC—
exemplifies the market opportunity ahead. With enhanced operational efficiencies
increasing our capacity, we are well-positioned to capitalize on this segment.
3. Strategic Mergers & Acquisitions (M&A)
o Acquisitions are a key accelerator for our Invest For Growth strategy, providing new
sales channels, geographic expansion, and complementary capabilities.
o Our M&A pipeline is expanding rapidly, and we are actively pursuing opportunities
that align with our strategic criteria:
Access to new sales channels, where our expertise and solutions can drive
immediate value.
Geographic expansion, enabling us to serve new markets while reducing
logistical costs.
Complementary processes, strengthening our portfolio and increasing wallet
share with existing customers.
Our commitment to long-term growth is unwavering. Through strategic customer partnerships,
disciplined market expansion, and targeted acquisitions, we are positioning Core Molding for a future
of sustained success.
A Future of Opportunity
We have built an organization that excels at execution and is ready to scale. Our transformation
strategy has positioned us uniquely in the market, and the momentum behind us continues to build.
Our robust pipeline of opportunities, including major programs across multiple industries, underscores
the strength of our approach.
I remain deeply grateful for the talent, dedication, and resilience of the Core Molding team. Together,
we will continue executing on our Must Win Battle of Invest for Growth, driving long-term success
for our company and shareholders.
I look forward to sharing our progress with you in the year ahead.
Thank You,
David Duvall
President and CEO
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from___________to___________
Commission file number 001-12505
CORE MOLDING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
31-1481870
(State or other jurisdiction incorporation or organization)
(I.R.S. Employer Identification No.)
800 Manor Park Drive, Columbus, Ohio
43228-0183
(Address of principal executive office)
(Zip Code)
Registrant's telephone number, including area code: (614) 870-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol (s)
Name of each exchange on which registered
Common Stock, par value $0.01
CMT
NYSE American LLC
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer ☒ Non-accelerated Filer
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. Yes No
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of
the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of
incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period
pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
As of June 30, 2024, the aggregate market value of the registrant's voting and non-voting common equity held by non-
affiliates of the registrant was approximately $97,000,000, based upon the closing sale price of $15.94 on the NYSE
American LLC on June 28, 2024, the last business day of registrant's most recently completed second fiscal quarter. As of
March 11, 2025, the latest practicable date, 8,895,735 shares of the registrant’s common stock were issued, which includes
281,340 shares of unvested restricted common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this report incorporates by reference specific portions of the registrant's Definitive Proxy Statement, which will
be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by
this report.
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Part I
5
Item 1. Business
5
Item 1A. Risk Factors
10
Item 1B. Unresolved Staff Comments
19
Item 1C. Cybersecurity
19
Item 2. Properties
20
Item 3. Legal Proceedings
20
Item 4. Mine Safety Disclosure
20
Part II
21
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchase of Equity
Securities
21
Item 6. [RESERVED]
21
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
30
Item 8. Financial Statements and Supplementary Data (PCAOB 173)
31
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
60
Item 9A. Controls and Procedures
61
Item 9B. Other Information
61
Item 9C. Disclosure Regarding foreign Jurisdictions that Prevent Inspections
61
Part III
62
Item 10. Directors, Executive Officers, and Corporate Governance
62
Item 11. Executive Compensation
62
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
62
Item 13. Certain Relationships and Related Transactions, and Director Independence
62
Item 14. Principal Accountant Fees and Services
62
Part IV
63
Item 15. Exhibits and Financial Statement Schedules
63
Item 16. Form 10-K Summary
63
Signatures
64
Exhibit 23
Exhibit 24
Exhibit 31(a)
Exhibit 31(b)
Exhibit 32(a)
Exhibit 32(b)
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABEL LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT
[This page intentionally left blank]
3
Information Regarding Forward-Looking Statements
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 Annual
Report on Form 10-K:
•
dependence upon certain major customers as the primary source of Core Molding Technologies’ sales revenues
and the potential loss of any major customers due to the completion of existing production programs with those
customers or otherwise;
•
business conditions in the plastics, transportation, power sports, utilities and commercial product industries
(including changes in demand for production);
•
the availability and price increases of raw materials;
•
general economic, social, regulatory (including foreign trade policy) and political environments in the countries
in which Core Molding Technologies operates;
•
The imposition of new or increased tariffs and the resulting consequences;
•
safety and security conditions in Mexico;
•
fluctuations in foreign currency exchange rates;
•
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;
•
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 (including engine emission regulations);
4
•
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;
•
cybersecurity incidents or other similar disruptions impacting Core Molding Technologies or significant
customers and/or suppliers; 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.
5
PART I
ITEM 1. BUSINESS
DESCRIPTION OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.
Core Molding Technologies, Inc. (the "Company") and its subsidiaries operate in the engineered materials market as one
operating segment as a molder of thermoplastic and thermoset structural products. The Company produces and sells
molded products for varied markets, including medium and heavy-duty trucks, power sports, building products and other
industrial markets. Core Molding Technologies has its headquarters in Columbus, Ohio, and operates six production
facilities in the United States, Canada and Mexico.
In general, the Company achieves product growth and diversification in several different ways, including: (1) resourcing of
existing structural products from another supplier by an original equipment manufacturer (“OEM”); (2) obtaining new
structural products through a selection process in which an OEM solicits bids; (3) successful marketing of structural
products for previously non-structural applications; (4) converting alternative materials to engineered materials; (5)
successful marketing of structural products to OEMs outside of our traditional markets; (6) developing of new materials,
technology and processes to meet current or prospective customer requirements; and (7) acquiring an existing business.
The Company's efforts continue to be directed towards all seven of those identified areas.
PRODUCTS
Structural plastics compete largely against metals and have the strength to function well during prolonged use.
Management believes that structural plastic components offer many advantages over metals, including:
•
heat resistance;
•
corrosion resistance;
•
lighter weight;
•
lower cost;
•
greater flexibility in product design;
•
part consolidation for multiple piece assemblies;
•
lower initial tooling costs for lower volume applications;
•
high strength-to-weight ratio; and
•
dent-resistance in comparison to steel or aluminum.
Our manufacturing facilities utilize various production processes; however, end products are similar and are not unique to a
facility or customer base.
Sheet Molding Compound (“SMC”)
SMC is primarily a combination of resins, fiberglass, fillers, and catalysts compounded and cured in sheet form, which is
then used to manufacture compression-molded products, as discussed below. The Company incorporates a sophisticated
computer program in the process of compounding various complex SMC formulations tailored to meet customer needs.
The program provides for the control of information during various production processes and data for statistical batch
controls. The Company also sells SMC to other molders.
Molded Products
The Company manufactures structural products using compression molding (54 presses), resin transfer molding (4
presses), and injection molding processes (24 presses). As of December 31, 2024, the Company owned 82 molding presses
including 19 in its Columbus, Ohio facility; 24 in its Matamoros, Mexico facility; 18 in its Cobourg, Canada facility; 10 in
its Gaffney, South Carolina facility; 5 in its Winona, Minnesota facility; and 6 in its Escobedo, Mexico facility. The
Company's molding presses range in size from 250 to 5,500 tons.
SMC compression molding is a process whereby SMC is molded to form by matched die steel molds through which a
combination of heat and pressure are applied via a molding press. Outer components and high strength reinforcing
components are fabricated with this process. Visually appealing components are produced with vacuum assisted molding
and through utilizing in-mold coating (IMC). IMC can provide an additional benefit of conductivity assisting in the process
of post paint application along with reducing porosity and improving surface appearance. This thermoset process produces
high quality, dimensionally consistent products and is typically used for high volume products.
6
Direct Long Fiber Thermoplastic (“DLFT”) compression molding employs two molds, typically a core and a cavity,
similar to matched die SMC molding. This is a process for compounding and molding thermoplastic materials with "long"
fibers (typically, 0.5 inch or longer). Engineered thermoplastic pellets and performance additives are compounded in a
screw extruder, to which chopped reinforcements (typically, glass fibers) are added and further extruded. A "charge" of
material is cut to a precise weight, and this "charge" is directly moved to a compression or injection transfer process, where
it is molded into a finished part. The process allows for direct processing of the compounded material, bypassing the
expense and delay of producing an intermediate product (pellets or sheets) as is used in other fiber-reinforced thermoplastic
molding processes. The D-LFT process is an attractive option for products that have highly complex geometry, require high
strength and stiffness, and benefit from the recyclability of a thermoplastic resin.
Vacuum resin transfer compression molding (“RTM”) process employs two mold halves, typically a core and a cavity,
similar to matched die molding. The composite is produced by placing glass mat, chopped strand, or continuous strand
fiberglass in the mold cavity in the desired pattern. Parts used for cosmetic purposes typically have a gel coat applied to the
mold surface. The core mold is then fitted to the cavity, and upon a satisfactory seal, a vacuum is applied. When the proper
vacuum is achieved, the resin is injected into the mold to fill the part. Finally, the part is allowed to cure and is then
removed from the mold and trimmed to shape. Fiberglass reinforced products produced from the RTM process exhibit a
high-quality surface on both sides of the part and excellent part thickness. The multiple insert tooling technique can be
utilized in the RTM process to improve throughput based upon volume requirements.
Structural Foam and Web Injection Molding (“SIM”) are low-pressure injection molding processes that develop high-
strength, rigid parts at low weight. This is accomplished by mixing a foaming agent (usually nitrogen gas) with the melted
polymer (structural foam process), or by injecting nitrogen gas into the mold cavity immediately after the plastic resin is
injected (structural web molding). Structural foam produces a cellular interior structure that can provide twice the rigidity
of a solid plastic molding. The structural web process pushes the plastic out to the mold cavity walls, uniformly packing
out the entire mold and hollowing out thicker sections to create products of varying wall thicknesses. As a result, structural
web molded parts have a smoother, glossier finish than other low-pressure parts. Both processes give part designers
flexibility when designing products that need strength and stiffness at low weight and also have the benefit of recyclability
due to the use of a thermoplastic resin.
Reaction Injection Molding (“RIM”) is a process whereby a composite is produced through the injection of a two-
component thermoset resin system utilizing dicyclopentadiene (“DCPD”) technology. DCPD technology involves injecting
a liquid compound into matched die aluminum molds to form the part. In this process the mold is prepared, closed and the
liquid compound is injected into the tool then cured. Additional finishing is required when the part is designated for top
coat painting. The RIM process is an alternative to other closed mold processes for mid-volume parts that require a high
level of impact resistance.
Hand Lay-Up is a process that utilizes a shell mold, typically the cavity, where glass cloth, either chopped strand or
continuous strand glass mat, is introduced into the cavity. Resin is then applied to the cloth and rolled out to achieve a
uniform wet-out from the glass and to remove any trapped air. The part is then allowed to cure and is removed from the
mold. After removal, the part typically undergoes trimming to achieve the shape desired. Parts used for cosmetic purposes
typically have a gel coat applied to the mold surface prior to the lay-up to improve the surface quality of the finished part.
Parts produced from this process have a smooth outer surface and an unfinished or rough interior surface. These fiberglass-
reinforced products are typically non-cosmetic components or structural reinforcements that are sold externally or used
internally as components of larger assemblies.
Spray-Up is a process that utilizes the same type of shell mold as hand-lay-up, but instead of using glass cloth to produce
the composite part, a chopper/spray system is employed. Glass rovings and resin feed the chopper/spray gun. The resin
coated, chopped glass is sprayed into the mold to the desired thickness. The resin coated glass in the mold is then rolled out
to ensure complete wet-out and to remove any trapped air. The part is then allowed to cure, is removed from the mold, and
is then trimmed to the desired shape. Parts used for cosmetic purposes typically have a gel coat applied to the mold surface
prior to the resin-coated glass being sprayed into the mold to improve the surface quality of the finished part. Parts
produced from this process have a smooth outer surface and an unfinished or rough interior surface.
Assembly, Machining, and Paint Products
Many of the products molded by the Company are assembled, machined, and prime painted or topcoat painted to result in a
finished product used by the Company's customers.
7
The Company has demonstrated manufacturing flexibility that accommodates a range of low volume hand assembly and
machining work, to high volume, highly automated assembly and machining systems. Robotics are used as deemed
productive for material handling, machining, and adhesive applications. In addition to conventional machining methods,
water-jet cutting technology is also used where appropriate. The Company also utilizes paint booths and batch ovens in its
facilities. The Company generally contracts with outside providers for higher volume programs that require top coat paint.
CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT
Capital expenditures totaled approximately $11.5 million, $9.1 million, and $16.6 million in 2024, 2023, and 2022
respectively. These capital expenditures primarily consisted of building and equipment improvements and additional
production equipment to manufacture parts.
The Company continuously engages in product development. Research and development activities focus on developing
new material formulations, new structural composite products, new production capabilities and processes, and improving
existing products and manufacturing processes. The Company does not maintain a separate research and development
organization or facility, but uses its production equipment, as necessary, to support these efforts and cooperates with its
customers and its suppliers in research and development efforts. Likewise, manpower to direct and advance research and
development is integrated with the existing manufacturing, engineering, production, and quality organizations.
Management has estimated that costs related to research and development were approximately $1.9 million, $1.7 million
and $1.6 million in 2024, 2023, and 2022, respectively.
MAJOR CUSTOMERS
The Company had five major customers during the years ended December 31, 2024, 2023, and 2022, BRP, Inc. ("BRP"),
International Motors, LLC ("International"), PACCAR, Inc. ("PACCAR"), Volvo Group North America, LLC ("Volvo")
and Yamaha Motor Corporation ("Yamaha"). Major customers are defined as customers whose sales individually consist of
more than ten percent of total sales during any annual or interim reporting period presented. The loss of a significant
portion of sales to these customers could have a material adverse effect on the business of the Company. The following
table presents sales to major customers as a percent of total sales for the years ended December 31:
2024
2023
2022
Supply
Agreement
Supply Agreement
Expiration
BRP
10%
14%
14%
Yes
July 31, 2029
International
22%
20%
17%
No
N/A
PACCAR
13%
10%
10%
No
N/A
Yamaha
10%
9%
6%
No
N/A
Volvo
14%
16%
14%
Yes
December 31, 2027
BRP provides a portfolio of industry-leading products comprising of snowmobiles, watercraft, on and off-road vehicles,
power sports propulsion systems as well as engines for karts, motorcycles and recreational aircraft. Yamaha offers a diverse
portfolio of products, including motorcycles, watercraft, outboard motors, ATVs, side-by-side vehicles, musical
instruments, and audio solutions, all designed to deliver exceptional performance and innovation across land, water, and
sound. Demand for these products is driven by consumer demand and general economic conditions.
The North American truck market in which International, Volvo, and PACCAR compete is highly competitive and the
demand for medium and heavy-duty trucks is subject to considerable volatility as it moves in response to cycles in the
overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of
the freight tonnage hauled. Truck demand also depends on general economic conditions and changes to emission
regulations, among other factors.
OTHER CUSTOMERS
The Company also produces products for other customers and industries, including medium and heavy-duty trucks, power
sports, building products, industrial and utilities and other commercial markets. Sales to these customers individually were
all less than 10% of total sales for interim and annual reporting during 2024, 2023, and 2022.
8
GEOGRAPHIC INFORMATION
Substantially all of the Company's products are sold in U.S. dollars. The following table provides information related to the
Company's sales by country, based on the ship to location of customers' production facilities, for the years ended December
31 (in thousands):
2024
2023
2022
United States
$
187,973 $
234,504 $
231,391
Mexico
97,896
105,818
113,245
Canada
11,145
11,980
26,829
Other
5,364
5,436
5,911
Total
$
302,378 $
357,738 $
377,376
SEASONALITY & BUSINESS CYCLE
The Company's business is affected annually by the production schedules of its customers. Certain of the Company's
customers typically shut down their operations on an annual basis for a period of one to several weeks during the
Company's third quarter. Certain customers also typically shut down their operations during the last week of December. As
a result, demand for the Company's products typically decreases during the third and fourth quarters. Demand for medium
and heavy-duty trucks, power sports, automotive, and commercial products also fluctuates on an economic, cyclical and
seasonal basis, causing a corresponding fluctuation for demand of the Company's products.
MAJOR COMPETITORS
The Company believes that it is one of the largest compounders and molders of thermoset and thermoplastic structural
products in North America. The Company faces competition from a number of other molders including, most significantly,
Molded Fiber Glass Companies, Teijin, Ashley Industrial Molding, René Matériaux Composite Ltée ("RMC"), STS Group,
and 20/20 Custom Molded Plastics.
RAW MATERIALS
The principal raw materials used in the Company's processes are unsaturated polyester, vinyl ester, polyethylene,
polypropylene, and dicyclopentadiene resins, fiberglass, and filler. Other significant raw materials include adhesives for
assembly of molded components, in-mold coating, gel-coat, prime paint for preparation of cosmetic surfaces, and hardware
(primarily metal components). Many of the raw materials used by the Company are petrochemical-based, natural gas-
based, as well as downstream derivatives, and therefore, the costs of certain raw materials can be affected by changes in
costs in these upstream commodities. Due to fluctuating commodity prices, suppliers are typically reluctant to enter into
long-term contracts. The Company generally has supplier alternatives for each raw material, and regularly evaluates its
supply base to improve its overall purchasing position.
Normally we do not carry inventories of raw materials or finished products in excess of what is reasonably required to meet
production and shipping schedules, and to manage risk of supply and variation in demand.
CAPACITY CONSTRAINTS
Capacity utilization is measured based on standard cycle times and a standard work week, which can range from five days
per week, three-shifts per day to seven days per week, 24x7 operation, depending on the facility and molding process.
During times when demand exceeds the standard five day, three -shift capacity, the Company will work weekends to create
additional capacity, which can provide capacity utilization percentages greater than 100%. During 2024, the Company has
used various methods from overtime to weekend manpower crews to support the customers' production requirements.
The Company measures facility capacity in terms of its large compression molding presses (2,000 tons or greater). The
Company owned 28 large compression molding presses at its facilities at December 31, 2024. The capacity utilization in
these production facilities was 73% and 83% for the years ended December 31, 2024 and 2023, respectively.
The Company measures facility capacity in terms of its large injection molding presses (750 tons or greater). The Company
owned 12 large injection molding presses at its facilities at December 31, 2024. The capacity utilization in these production
facilities was 52% and 64% for the years ended December 31, 2024 and 2023, respectively.
BACKLOG
The Company relies on production schedules provided by its customers to plan and implement production. These schedules
are normally provided on a weekly basis and typically considered firm for approximately four weeks. Some customers
update these schedules daily for changes in demand, allowing them to run their inventories on a “just-in-time” basis. The
9
ordered backlog of four weeks of expected shipments was approximately $19.1 million (100% of which the Company
shipped during the first month of 2025) and $25.3 million at December 31, 2024 and 2023, respectively.
HUMAN CAPITAL MANAGEMENT
As of December 31, 2024, the Company employed a total of 1,570 employees, which consisted of 509 employees in the
United States, 880 employees in Mexico and 181 employees in Canada. The salary workforce consisted of 335 employees,
while 1,235 employees were hourly. Four plant locations making up 67.4% of the workforce are covered by collective
bargaining agreements.
Details on the collective bargaining agreements are as follows:
Plant Location
Union Name
Expiration Date Employees
Columbus, Ohio
International Association of Machinists and Aerospace Workers
("IAM")
August 9, 2025
212
Matamoros,
Mexico
Sindicato de Jorneleros y Obreros
December 31,
2025
657
Cobourg, Canada United Food & Commercial Workers Canada ("UFCW")
November 1, 2025
138
Escobedo,
Mexico
Sindicato de trabajadores de la industria metalica y del comercio
del estado de Nuevo Leon Presidente Benito Juarez Garcia
C.T.M.
February 14, 2026
51
To support the Company’s long-term strategic plan, the Company is committed to being an employer of choice focusing on
providing a safe place to work, organizational development opportunities, talent planning and a competitive total rewards
package.
Safety – The safety of the Company's workforce is a top priority with continued improvement in the Company's safety
record. The Company utilizes behavior-based safety programs at all global facilities as a proactive method of increasing
safe behaviors.
Organizational Development – The Company offers learning and development opportunities throughout the workforce,
including a comprehensive leadership program for high-potential employees identified through our succession and talent
planning process.
Talent Planning – The Company has developed people management processes that enable us to hire, retain and develop a
high-performing workforce. We have performance procedures that align with our organization’s strategic goals and support
employee development. Employee engagement surveys are conducted to understand employee satisfaction and provide
opportunities to create action plans to improve our workplace culture and employee retention.
Total Rewards – Our total rewards package supports an environment where employees want to stay and build their career.
We provide fair and competitive compensation and benefits that promote physical, emotional and financial well-being.
With a focus on the employee experience, our workplace fosters employee engagement, productivity and morale while
encouraging effort, creativity and innovation.
ENVIRONMENTAL, CLIMATE RELATED REGULATIONS AND COMPLIANCE
The Company's manufacturing operations are subject to federal, state, and local environmental laws and regulations, which
impose limitations on the discharge of hazardous and non-hazardous pollutants into the air and waterways. The Company
has established and implemented standards for the treatment, storage, and disposal of hazardous waste. Our policy is to
conduct our business with due regard for the preservation and protection of the environment. Our environmental waste
management process involves the regular auditing of hazardous waste accumulation points, hazardous waste activities,
authorized treatment, and storage and disposal facilities. We believe that our operations are in substantial compliance with
all material environmental laws and regulations applicable to our plants and operations. Historically, our annual costs of
achieving and maintaining compliance with environmental laws and regulations have not been material to our financial
results. However, new requirements, more stringent application of existing requirements or the discovery of previously
unknown environmental conditions could result in material environmental related expenditures in the future. See below
under "Item 1A Risk Factors - Legal, Insurance, Tax and Cybersecurity Risks - Changes in legal, regulatory, and social
responses to climate change, including any possible effect on energy prices, could adversely affect our business and reduce
our profitability."
10
The Company has Environmental Management Systems at all of its facilities and has obtained ISO 14001 certification at
all facilities. As part of the Company's environmental policy, all manufacturing employees are trained on waste
management and other environmental issues. The Company's full Board provides oversight of the Company's
environmental and climate matters through an Enterprise Risk Management system and quarterly reporting process.
The Company holds various environmental operating permits for its production facilities in the U.S., Mexico, and Canada
as required by U.S., Mexican and Canadian federal, state and local regulations. The Company has substantially complied
with all requirements of these operating permits.
The Company produces structural parts that are long-lived assets and generally not considered single source plastics. As
such, the Company is not currently subject to any resin plastic taxes or single-use plastic regulations.
PATENTS, TRADE NAMES, AND TRADEMARKS
The Company will evaluate, apply for, and maintain patents, trade names, and trademarks where it believes that such
patents, trade names, and trademarks are reasonably required to protect its rights in its products. However, the Company
does not believe that any single patent, trade name, or trademark or related group of such rights is materially important to
its business or its ability to compete.
AVAILABLE INFORMATION
We maintain a website at www.coremt.com. Annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, all amendments to those reports, and other information about us are available free of charge through this
website as soon as reasonably practicable after the reports are electronically filed with the SEC. These materials are also
available from the SEC’s website at www.sec.gov.
ITEM 1A. RISK FACTORS
The following risk factors describe various risks that may affect our business, financial condition, and operations.
References to “we,” “us,” and “our” in this “Risk Factors” section refer to Core Molding Technologies and its subsidiaries,
unless otherwise specified or unless the context otherwise requires.
Risks Relating to our Business
Our business has concentration risks associated with significant customers.
Sales to five customers constituted approximately 69% of our 2024 total sales. No other customer accounted for more than
10% of our total sales for this period. The loss of any significant portion of sales to any of our significant customers could
have a material adverse effect on our business, results of operations, and financial condition.
Accounts receivable balances with five customers accounted for 71% of accounts receivable at December 31, 2024. The
Company performs ongoing credit evaluations of its customers’ financial condition and maintains reserves for potential bad
debt losses. If the financial conditions of any of these customers were to deteriorate, impacting their ability to pay their
receivables, our reserves may not be adequate which could have a material adverse effect on our business, results of
operations, or financial condition.
Beginning in the second half of 2024 and continuing through 2026, our business with Volvo, a significant customer
accounting for approximately 14% of our 2024 total sales, will begin transitioning from existing production programs that
the Company currently supplies to new programs that the Company does not support. There is no assurance that we will be
able to replace the loss of any revenue that we may experience from the expiration of our existing production programs
with Volvo, or from the loss of any other significant customer whether due to unexpected loss or future expiration of
production programs.
Furthermore, these customers may not continue to do business with us as they have in the past and we may not be able to
supply these customers or any of our other customers at current levels.
Our business is affected by the cyclical and overall nature of the industries and markets that we serve.
The North American heavy and medium-duty truck industry, on which the demand of our products is largely dependent, is
highly cyclical. In 2024, approximately 56% of our product sales was in this industry. The market for this industry
fluctuates in response to factors that are beyond our control, such as: general economic conditions; interest rates; federal
11
and state regulations, including engine emissions regulations, import regulations, tariffs (for example, on products imported
into or exported from the U.S., including under U.S. or other trade laws or measures, or other key markets); and other
taxes, consumer spending, fuel costs, supply chain constraints, our customers' inventory levels and production rates, and
the overall strength of the economy. Our manufacturing operations have a significant fixed cost component. Accordingly,
during periods of changing demands, including an increase or slowdown in truck demand, the profitability of our
operations may change proportionately more than revenues from operations. In particular, the continuing adoption or
expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade
agreements or policies has the potential to adversely impact demand for our products, our costs and prices, our customers,
our suppliers, and the economy, which in turn could have a material adverse effect on our business, operating results, and
financial condition.
In addition, our operations are typically seasonal as a result of regular customer maintenance shutdowns, which typically
vary from year to year based on production demands and occur in the third and fourth quarter of each calendar year. This
seasonality may result in decreased net sales and profitability during the third and fourth fiscal quarters of each calendar
year. Weakness in overall economic conditions or in the markets that we serve, or significant reductions by our customers
in their inventory levels or future production rates, could result in decreased demand for our products and could have a
material adverse effect on our business, results of operations, or financial condition.
Price increases in raw materials (including price increases due to prolonged inflation or imposition of tariffs) and
availability of raw materials, including disruptions in supply chain, could adversely affect our operating results and
financial condition.
We purchase resins and fiberglass for use in production as well as hardware and other components for product assembly.
The prices for purchased materials are affected by the prices of material feed stocks such as crude oil, natural gas, and
downstream components, as well as processing capacity versus demand. If we are unsuccessful in developing ways to
mitigate the adverse effects of these raw material price increases or are unable to offset the increase through price increases
to our customers, our results of operations could be materially adversely impacted.
We rely upon a global supply chain to deliver the raw materials, components, systems and parts that we need to
manufacture and service our products. Any direct or indirect supply chain disruptions, including from the effects of any
imposition of tariffs or retaliatory trade measures, pandemics or epidemics, economic slowdowns, recessions, geopolitical
events, natural disasters or similar catastrophes, inflation or rising interest rates, may have an adverse impact on our
business, financial condition, results of operations or cash flows. In addition, recent inflationary pressures have resulted in
increased raw material, labor and logistics expenses and evolving trade policies could continue to make sourcing products
from foreign countries difficult and costly, including the imposition of tariffs and related retaliatory measures, which may
force us to face higher costs that could require us to raise prices for our products, which, may adversely affect our results of
operations. If our costs are subject to continuing significant inflationary pressures and/or imposition of tariffs, we may not
be able to fully offset such higher costs through price increases. Our inability to do so could harm our results of operations
and financial condition.
Long-term fixed price customer contracts could adversely impact operating results in an inflationary economy.
In order to obtain new business in a competitive environment, the Company enters into long-term contracts that fix the
customer product price and requires the Company to accept all product orders pursuant to such contracts. These fixed price
customer contracts allow for certain price increases but may not provide for recovery of all of the Company's cost
increases. As a result, if the Company’s operating costs, such as raw material, labor and overhead costs, increase the
Company may not be able to increase the price of products sold to customers enough to offset operating costs increases,
which could adversely affect our operating results and financial condition.
Cost reduction and quality improvement initiatives by original equipment manufacturers could have a material adverse
effect on our business, results of operations, or financial condition.
We are primarily a components supplier to large original equipment manufacturers (“OEMs”) that are able to exert
considerable pressure on components suppliers to reduce costs, improve quality, and provide additional design and
engineering capabilities. OEMs continue to demand and receive price reductions and measurable increases in quality
through their use of competitive selection processes, rating programs, and various other arrangements. We may be unable
to generate sufficient production cost savings in the future to offset such price reductions. OEMs may also seek to save
costs by purchasing components from suppliers that are geographically closer to their production facilities or relocating
production to locations with lower cost structures and purchasing components from suppliers with lower production costs.
12
These decisions by OEMs could require us to shift production between our facilities, move production lines between our
facilities, or open new facilities to remain competitive. Shifting production, moving production lines, or opening new
locations could result in significant costs required for capital investment, transfer expenses, and operating costs.
Additionally, OEMs have generally required component suppliers to provide more design engineering input at earlier
stages of the product development process, the costs of which have, in some cases, been absorbed by the suppliers. To the
extent that the Company does not meet the quality standards or demands of quality improvement initiatives sought by
OEMs, or does not match the quality of suppliers of comparable products, OEMs may choose to purchase from these
alternative suppliers, and as a result the Company may lose existing business or not qualify for new business with OEMs.
Future price reductions, increased quality standards, and additional engineering capabilities required by OEMs may reduce
our profitability and have a material adverse effect on our business, results of operations, or financial condition.
We operate in highly competitive markets, and if we are unable to effectively compete it may negatively impact future
operating results, sales, and earnings.
The markets in which we operate are highly competitive. We compete with a number of other manufacturers that produce
and sell similar products. Our products primarily compete on the basis of capability, product quality, cost, and delivery.
Some of our competitors have greater financial resources, research and development facilities, design engineering,
manufacturing, and marketing capabilities. If we are unable to develop new and innovative products, diversify the markets,
materials, and processes we utilize and increase operational enhancements, we may fall behind competitors or lose the
ability to achieve competitive advantages. In the highly competitive market in which we operate, this may negatively
impact our ability to retain existing customers or attract new customers, and if that occurs, it may negatively impact future
operating results, sales, and earnings.
We may be subject to additional shipping expense or late fees if we are not able to meet our customers' on-time demand for
our products.
We must continue to meet our customers' demand for on-time delivery of our products. Factors that could result in our
inability to meet customer demands include a failure by one or more of our suppliers to supply us with the raw materials
and other resources that we need to operate our business effectively, potential quality issues could materialize forcing us to
halt, delay or materially adjust deliveries, and an unforeseen spike in demand for our products, which would create
capacity constraints, among other factors. If this occurs, we may be required to incur additional shipping expenses to
ensure on-time delivery or otherwise be required to pay late fees, which could have a material adverse effect on our
business, results of operations, or financial condition. Additionally, our customers may halt or delay their production for the
same reason if one of their other suppliers fails to deliver necessary components. This may cause our customers to suspend
their orders or instruct us to suspend delivery of our products, which may adversely affect our business, results of
operations, or financial condition.
Increasing competition for highly skilled and talented workers, as well as labor shortages, could adversely affect our
business.
Our success largely depends on the efforts and abilities of our key personnel and our continuing ability to attract and retain
highly qualified personnel. Their skills, experience, and industry contacts significantly benefit us. A number of factors may
adversely affect the labor force available to us or increase labor costs, including high employment levels and government
regulations or policies. The increasing competition for highly skilled and talented employees has resulted, and could in the
future result, in higher compensation costs resulting in difficulties in maintaining a capable workforce. If we are unable to
hire and retain skilled employees capable of performing at a high level, or if mitigation measures we may take to respond
to a decrease in the availability of skilled laborers, such as overtime and third-party outsourcing, have unintended negative
effects, then our business could be adversely affected. A sustained labor shortage, lack of skilled labor, increased turnover
or labor cost inflation, as a result of general macroeconomic factors, could lead to increased costs, such as increased
overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our
ability to efficiently operate our manufacturing facilities and overall business and have other adverse effects on our results
of operations and financial condition.
Work stoppages or other labor issues at our facilities or at our customers' facilities, or those of our supplies or vendors,
could adversely affect our business, results of operations or financial condition.
As of December 31, 2024, unions at our Columbus, Ohio, Matamoros and Escobedo, Mexico, and Cobourg, Canada
facilities represented approximately 67.4% of our entire workforce. As a result, we are subject to the risk of work stoppages
13
and other labor-relations matters. The current Columbus, Ohio, Matamoros, Mexico, Cobourg, Canada, and Escobedo,
Mexico union contracts extend through August 9, 2025, December 31, 2025, November 1, 2025 and February 14, 2026,
respectively. Any prolonged work stoppage or strike at our unionized facilities could have a material adverse effect on our
business, results of operations, or financial condition. Any failure by us to reach a new agreement upon expiration of such
union contracts may have a material adverse effect on our business, results of operations, or financial condition.
In addition, if any of our customers, vendors or suppliers experience a material work stoppage, that customer may halt or
limit the purchase of our products or that supplier or vendor may interrupt supply or services of our necessary production
components. This could cause us to shut down, partially or completely, production facilities relating to these products,
which could have a material adverse effect on our business, results of operations, or financial condition.
Our foreign operations in Mexico and Canada subject us to risks that could negatively affect our business.
We operate manufacturing facilities in Matamoros and Escobedo, Mexico and Cobourg, Canada. As a result, a significant
portion of our business and operations is subject to the risk of changes in economic conditions, tax systems, consumer
preferences, social conditions, safety and security conditions, and political conditions inherent in Mexico and Canada,
including changes in the laws and policies that govern foreign investment, as well as changes in United States laws,
policies and regulations relating to foreign trade, investment and relations. Changes in laws, policies and regulations
related to foreign trade, investment and relations may have an adverse effect on our results of operations, financial
condition, or cash flows. Similarly, the potential imposition of tariffs, especially in Mexico, may lead to further challenges
that may negatively affect our business if there is a resulting reduction in demand for our products, result in the loss of
customers and harm our competitive position in key markets.
Changes in U.S. trade policy, including the imposition of new or increased tariffs and the resulting consequences, could
have an adverse effect on our business, operating results, and financial condition.
Evolving trade policies could make sourcing and selling products between foreign countries difficult and costly, as the
Company and its customers sell foreign produced products into the United States and the Company sources a portion of its
raw materials used in production from outside of the U.S. For example, in early 2025, the current U.S. administration
announced significant new tariffs on foreign imports into the U.S., specifically from Mexico and Canada, all of which were
subsequently postponed for 30 days prior to becoming effective. We cannot predict the extent to which the U.S. or other
countries will impose new or additional quotas, duties, taxes or other similar restrictions upon the import or export of our
products in the future, nor can we predict the outcome of negotiations between the U.S. and affected countries, the
responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative
sources of supply, and demand for our products in affected markets. The continuing adoption or expansion of trade
restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has
the potential to adversely impact demand for our products, our costs and prices, our customers, our suppliers, and the
economy, which in turn could have a material adverse effect on our business, operating results, and financial condition.
Our business is subject to risks associated with manufacturing equipment and infrastructure.
We convert raw materials into molded products through a manufacturing process at each production facility. A catastrophic
loss of the use of all or a portion of our facilities due to accident, fire, explosion, or natural disaster, whether short or long-
term, could have a material adverse effect on our business, results of operations, or financial condition.
Unexpected failures of our equipment and machinery may result in production delays, revenue loss, and significant repair
costs, as well as injuries to our employees. Any interruption in production capability may require us to make large capital
expenditures to remedy the situation, which could have a negative impact on our profitability and cash flows. Our business
interruption insurance may not be sufficient to offset the lost revenues or increased costs that we may experience during a
disruption of our operations. Because we supply our products to OEMs, a temporary or long-term business disruption could
result in a permanent loss of customers. If this were to occur, our future sales levels and therefore our profitability could be
materially adversely affected.
Our business is subject to risks associated with new business awards. In order to recognize profit from new business, we
must accurately estimate product costs as part of the quoting process and implement effective and efficient manufacturing
processes. Expected future sales from business awards may not materialize. We may not realize the sales or operating
results that we anticipate from new business awards, and we may experience difficulties in meeting the production demands
of new business awards.
14
The success of our business relies on our ability to produce products which meet the quality, performance, and price
expectations of our customers. Our ability to recognize profit is largely dependent upon accurately identifying the costs
associated with the manufacturing of our products and executing the manufacturing process in a cost-effective manner. All
costs may not be accurately identified during the Company's quoting process and the expected level of manufacturing
efficiency may not be achieved. As a result, we may not realize the anticipated operating results related to new business
awards.
We will continue to pursue, and may be awarded, new business from existing or new customers. The Company may make
capital investments, which may be material to the Company, in order to meet the expected production requirements of
existing or new customers related to these business awards, and to support the potential production demands which may
result from continued sales growth. The anticipated impact on the Company's sales and operating results related to these
business awards may not materialize, as our growth could be adversely affected by many factors, including macroeconomic
events such as inflation, recession, and interest rate increases, competition, and labor market shortages or regulations. Any
delays or production difficulties encountered in connection with these business awards, and any change in customer
demand, could adversely impact our business, results of operations, and liquidity, and the benefits we anticipate may never
materialize.
We have made acquisitions and may make acquisitions in the future. We may not realize the operating results that we
anticipate from these acquisitions or from acquisitions or business exits we may make in the future, and we may experience
difficulties in integrating the acquired businesses or may inherit significant liabilities related to such businesses.
We explore opportunities to acquire businesses that we believe are related to our core competencies, some of which may be
material to us. We expect such acquisitions will produce operating results consistent with our other operations; however,
any such acquisition could fail to produce the expected operating results.
Any acquisitions may present significant challenges for our management due to the increased time and resources required
to properly integrate management, employees, information systems, accounting controls, personnel, and administrative
functions of the acquired business with those of ours and to manage the combined company on a going forward basis. The
diversion of management's attention and any delays or difficulties encountered in connection with the integration of these
businesses could adversely impact our business, results of operations, and liquidity, and the benefits we anticipate may
never materialize.
If we are unable to meet future capital requirements, our business may be adversely affected.
As we grow our business, we may have to incur significant capital expenditures. We may make capital investments to,
among other things, build new or upgrade our facilities, purchase equipment, and enhance our production processes. We
may not have, or be able to obtain, adequate funds to make all necessary capital expenditures when required, and the
amount of future capital expenditures may be materially in excess of our anticipated or current expenditures. If we are
unable to make necessary capital expenditures we may not have the capability to support our customer demands, which in
turn could reduce our sales and profitability and impair our ability to satisfy our customers' expectations. The need for
additional capital may necessitate that the Company incur further indebtedness or issue additional stock in the equity
markets in order to raise needed capital. In addition, even if we are able to invest sufficient resources, these investments
may not generate net sales that exceed our expenses, generate any net sales at all, or result in any commercially acceptable
products.
We may not achieve expected efficiencies related to the proximity of our customers' production facilities to our
manufacturing facilities, or with respect to existing or future production relocation plans.
Certain facilities are located in close proximity to our customers in order to minimize both our customers' and our own
costs. If any of our customers were to move or if nearby facilities are closed or impaired, that may impact our ability to
remain competitive. Additionally, our competitors could build a facility that is closer to our customers' facilities which may
provide them with a geographic advantage. Any of these events might require us to move closer to our customers, build
new facilities, or shift production between our current facilities to meet our customers' needs, resulting in additional cost
and expense.
15
Our products may be rendered obsolete or less attractive if there are changes in technology, regulatory requirements,
governmental policies or competitive processes.
Changes in technology, regulatory requirements, and competitive processes may render certain products obsolete or less
attractive. Future chemical regulations may restrict our ability to manufacture products, cause us to incur substantial
expenditures to comply with them, and subject us to liability for adverse environmental or health effects linked to the
manufacture of our products. Failure to comply with future regulations and policies may subject us to penalties or other
enforcement actions. Our ability to anticipate changes in these areas will be a significant factor in our ability to remain
competitive. If we are unable to identify or compensate for any one of these changes it may have a material adverse effect
on our business, results of operations, or financial condition.
Financial and Accounting Risks
Fluctuations in foreign currency exchange rates could adversely affect our results of operations, cash flow, liquidity, or
financial condition.
Because of our international operations, we are exposed to risk associated with value changes in foreign currencies, which
may adversely affect our business. Historically, our reported net sales, earnings, cash flow, and financial condition have
been subjected to fluctuations in foreign exchange rates. Our primary exchange rate exposure is with the Canadian dollar
and the Mexican peso against the U.S. dollar. We may experience losses from foreign currency exchange rate fluctuations,
and such losses could adversely affect our sales, earnings, cash flow, liquidity, results of operations or financial condition.
Our stock price can be volatile.
Our stock price can fluctuate widely in response to a variety of factors. Factors include actual or anticipated variations in
our quarterly operating results, our relatively small public float, changes in securities analysts' estimates of our future
earnings, the loss of major customers, or significant business developments relating to us or our competitors, and other
factors, including those described in this “Risk Factors” section. Our common stock also has a low average daily trading
volume, which limits a person's ability to quickly accumulate or quickly divest themselves of large blocks of our stock. In
addition, a low average trading volume can lead to significant price swings even when a relatively few number of shares
are being traded.
On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing
the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. Repurchases of shares of common
stock under the stock repurchase program are made in the open market. The stock repurchase program does not obligate the
Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the
Company’s discretion. Company stock repurchases under the program may result in common stock price and volume
fluctuations. During the year ended December 31, 2024, the Company repurchased 172,043 common shares under the
stock repurchase program and had a remaining repurchase authorization of $4,561,000 as of December 31, 2024.
We have incurred impairment charges in the past and we may be required to incur additional impairment charges in the
future on a portion or all of the carrying value of our goodwill or other intangible assets associated with our reporting unit
which may adversely affect our financial condition and results of operations.
Each year, and more frequently on an interim basis if appropriate, we are required by ASC Topic 350, “Intangibles-
Goodwill and Other,” to assess the carrying value of our indefinite lived intangible assets and goodwill to determine
whether the carrying value of those assets is impaired. Such assessment and determination involves significant judgments
to estimate the fair value of our reporting unit including estimating future cash flows, near term and long term revenue
growth, and determining appropriate discount rates, among other assumptions. As of December 31, 2024, goodwill and
indefinite lived intangibles were $21,806,000, or 10.4% of our total assets. If operating earnings fall below forecasted
operating earnings, we would perform an interim or annual goodwill impairment analysis. Should that analysis conclude
that the reporting unit’s fair value were to be below carrying value a goodwill impairment charge would be necessary. Any
such charges could materially adversely affect our financial results in the periods in which they are recorded.
16
Our ability to maintain effective internal control over financial reporting may be insufficient to allow us to accurately
report our financial results or prevent fraud, and this could cause our financial statements to become materially misleading
and adversely affect the trading price of our common stock.
We require effective internal control over financial reporting in order to provide reasonable assurance with respect to our
financial reports and to effectively prevent fraud. Internal control over financial reporting may not prevent or detect
misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding
of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the
preparation and fair presentation of financial statements. If we cannot provide reasonable assurance with respect to our
financial statements and effectively prevent fraud, our financial statements could become materially misleading, which
could adversely affect the trading price of our common stock.
If we are not able to maintain the adequacy of our internal control over financial reporting, including any failure to
implement required new or improved controls or if we experience difficulties in their implementation, our business,
financial condition, and operating results could be harmed. Any material weakness could affect investor confidence in the
accuracy and completeness of our financial statements. As a result, our ability to obtain any additional financing, or
additional financing on favorable terms, could be materially and adversely affected. This, in turn, could materially and
adversely affect our business, financial condition, and the market value of our stock and require us to incur additional costs
to improve our internal control systems and procedures. In addition, perceptions of the Company among customers,
suppliers, lenders, regulators, investors, securities analysts, and others could also be adversely affected. Material
weaknesses may arise in the future due to our failure to implement and maintain adequate internal control over financial
reporting.
Our failure to comply with our debt covenants could have a material adverse effect on our business, financial condition, or
results of operations.
The Company’s credit agreements contain certain covenants. The Company’s ability to borrow money and repay existing
debt on scheduled terms under its existing credit agreements requires the Company to be compliant with its covenants. If a
default of covenants were to occur, we may not be able to pay our debts or borrow sufficient funds, which could materially
adversely affect our results of operations, financial condition, and cash flows.
Legal, Insurance, Tax and Cybersecurity Risks
Changes in the legal, regulatory, and social responses, including those of stockholder activist organizations, to climate
change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability.
Many of our products are made from a material whose manufacturing process involves the emission of carbon dioxide, a
greenhouse gas that scientists have attributed as a cause of climate change. Our products require transportation from our
facilities to the site where they are used, which consumes energy. Although it is uncertain at this time precisely what
actions various governmental bodies will take early to address the effects of climate change and to achieve goals in
response to the potential effects of climate change, various proposed legislative or regulatory initiatives related to climate
changes, such as cap-and-trade systems, increased limits on emissions of greenhouse gases and fuel efficiency standards, or
other measures, could in the future have a material impact on us, our customers, or the markets we serve, thereby resulting
in a material adverse effect on our financial condition or results of operation. For example, customers in the transportation
(automotive and truck) industry could be required to incur greater costs in order to comply with such initiatives, which
could have an adverse impact on their profitability or viability. This could in turn lead to further changes in the structure of
the transportation industry that could reduce demand for our products. We are also reliant on energy to manufacture our
products, with our operating costs being subject to increase if energy costs rise. If new regulations would result in higher
energy costs we may not be able to recover our operating cost increases through production efficiencies and price
increases. Increases in energy prices for any reason (including as a result of new initiatives related to climate change) will
increase our operating costs and likely reduce our profitability. Until the timing, scope and extent of any future regulation
becomes known, we cannot predict its effect on our cost structure or our operating results, but it is likely our costs will
increase in relation to any climate change legislation and regulation concerning greenhouse gases, which could have an
adverse effect on our future financial position, results of operations or cash flows.
In addition, changes in weather severity may result in sufficient insurance availability to be limited or the price of
insurance to materially increase. The Company, its suppliers and customers are located in areas that may be subject to
damage or disruption due to changes in weather severity (i.e. floods, hurricanes, fires, etc.). Although the Company
17
maintains property and business interruption insurance, damage from a weather event, natural disaster, or disruption in the
supply chain or customer demand may not be fully covered by our insurance and could cause a material adverse impact on
our business. Disruption in our supply chain could also have an adverse effect on our ability to manufacture and deliver our
products on a timely basis, and thereby affect our results of operations. Thus, any supply chain disruption, however small,
could potentially cause the complete shutdown of an assembly line of one of our customers, and any such shutdown could
expose us to claims for compensation. If the Company is unable to obtain sufficient insurance coverage or the cost of
insurance materially increases, the Company’s financial condition and results of operation could be materially impacted.
We may be subject to product liability claims, recalls or warranty claims, which could have a material adverse effect on
our business, results of operations, or financial condition.
As a components supplier to OEMs, we face a business risk of exposure to product liability claims in the event that our
products malfunction and result in significant property damage, personal injury or death. Product liability claims could
result in significant losses as a result of expenses incurred in defending claims or the award of damages. In addition, we
may be required to participate in recalls involving components sold by us if any prove to be defective, or we may
voluntarily initiate a recall or make payments related to such claims in order to maintain positive customer relationships.
While we do maintain product liability insurance, it may not be sufficient to cover all product liability claims, and as a
result, any product liability claim brought against us could have a material adverse effect on our results of operations.
Further, we warrant the quality of our products under limited warranties, and as such, we are subject to risk of warranty
claims in the event that our products do not conform to our customers’ specifications. Such warranty claims may result in
costly product recalls, significant repair costs, and damage to our reputation, all of which would adversely affect our
business, results of operations or financial condition.
Our insurance coverage may be inadequate to protect against the potential hazards to our business.
We maintain property, business interruption, stop loss for health care and workers' compensation, director and officer,
product liability, cyber, and casualty insurance coverage, but such insurance may not provide adequate coverage against
potential claims, including losses resulting from war risks, terrorist acts, or product liability claims relating to products we
manufacture. Consistent with market conditions in the insurance industry, premiums and deductibles for some of our
insurance policies have been increasing and may continue to increase in the future. In some instances, some types of
insurance may become available only for reduced amounts of coverage, if at all. In addition, our insurers may challenge
coverage for certain claims. If we were to incur a significant liability for which we were not fully insured or that our
insurers disputed, it could have a material adverse effect on our financial position or results of operations.
We are subject to environmental, occupational health and safety rules and regulations that may require us to make
substantial expenditures or expose us to financial or other obligations including substantial damages, penalties, fines, civil
or criminal sanctions, and remediation costs that could adversely affect our results.
Our operations, facilities, and personnel are subject to extensive and evolving state and federal laws and regulations
pertaining to air emissions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes,
health and safety, the investigation and remediation of contamination, and the protection of the environment and natural
resources. It is difficult to predict the future interpretations and developments of environmental and health and safety laws,
policies, and regulations or their impact on our future results and cash flows. Continued compliance could result in
significant increases in capital expenditures and operating costs. In addition, we may be exposed to obligations or involved
from time to time in administrative or legal proceedings relating to environmental, health and safety or other regulatory
matters, and may incur financial and other obligations relating to such matters that could have an adverse impact on our
business, results of operations, or financial condition.
Certain senior management employees have entered into potentially costly severance arrangements with us if terminated
by the employee for good reason.
We have entered into executive employment agreements with executive officers that provide for significant severance
payments in the event such employee's employment with us is terminated by the employee for good reason (as defined in
the employment agreement). Good reason includes one or more of the following occurring in the ordinary course of
business or within one year of a change in control: (i) a material reduction in base salary, (ii) a material diminution in the
executive's position and/or duties, (iii) a material breach of the employment agreement by the person or other entity then
controlling the Company, or (iv) a disavowal of the employment agreement by the person or other entity then controlling
the Company. A change in control occurs when (a) one Person (as defined in the employment agreement), or more than one
18
Person acting as a group, acquires ownership of stock of the Company that, together with the stock held by such Person or
group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, (b) a
majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or
election is not endorsed by a majority of the Board before the date of appointment or election, or (c) the sale of all or
substantially all of the Company’s assets. These agreements would make it costly for the employment of certain of our
senior management employees to be terminated and such costs may also discourage potential acquisition proposals, which
may negatively affect our stock price.
Our provision for income tax, adverse tax audits, or changes in tax policy could have an adverse effect on our business,
financial condition, and results of operations.
We are subject to income taxes in the United States, Mexico, and Canada. Our provision for income taxes and cash flow
related to taxes may be negatively impacted by: (1) changes in the mix of earnings taxable in jurisdictions with different
statutory rates, (2) changes in tax laws and accounting principles, (3) changes in the valuation of our deferred tax assets and
liabilities, (4) discovery of new information during the course of tax return preparation, (5) increases in nondeductible
expenses, or (6) being subject to include foreign income in the United States as part of the Global Intangible Low-Taxed
Income or the GILTI tax provision.
Tax audits may also negatively impact our business, financial condition, and results of operations. We are subject to
continued examination of our income tax returns, and tax authorities may disagree with our tax positions and assess
additional tax. We regularly evaluate the likelihood of adverse outcomes resulting from these examinations to determine
the adequacy of our provision for income taxes. Outcomes from examinations may have a negative impact on our future
financial condition and operating results.
Cybersecurity incidents may threaten our confidential information, disrupt operations and result in harm to our reputation
and adversely impact our business and financial performance.
Cybersecurity incidents across industries, including ours, are increasing in sophistication and frequency and may range
from uncoordinated individual attempts to measures targeted specifically at us. These attacks include but are not limited to,
malicious software or viruses, attempts to gain unauthorized access to, or otherwise disrupt, our information systems,
attempts to gain unauthorized access to business, proprietary or other confidential information, and other electronic
security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise
protected information and corruption of data. Cybersecurity failures may be caused by employee error, malfeasance,
system errors or vulnerabilities, including vulnerabilities of our customers, vendors, suppliers, and their products. We have
been subject to cybersecurity incidents in the past. Based on information known to date, past incidents have not had a
material impact on our financial condition or results of operations. Additionally, if our controls are not effective in timely
identifying the occurrence of material cybersecurity incidents involving our information systems or data, then we may not
comply with SEC’s cybersecurity disclosure regulations, which could lead to regulatory action, fines, penalties, inquiries or
reprimands that adversely impact our business, as well as lead to a decline in customer engagement or confidence, negative
publicity, and possibly an increase in our operating costs to improve monitoring and compliance features relating to
cybersecurity. The rapid evolution and increased adoption of artificial intelligence technologies may intensify these risks.
We, or third parties who provide material services to us, may experience such incidents in the future, potentially with more
frequency or sophistication.
In the conduct of our business, we collect, use, transmit and store data on information systems, which are vulnerable to
disruption and an increasing threat of continually evolving cybersecurity risks. Failures of our IT systems as a result of
cybersecurity incidents or other disruptions could result in a breach of critical operational or financial controls and lead to a
disruption of our operations, commercial activities or financial processes. Cybersecurity incidents or other disruptions
impacting significant customers and/or suppliers could also lead to a disruption of our operations or commercial activities.
Despite our attempts to implement safeguards on our systems and mitigate potential risks, our actions may not be sufficient
to prevent cyberattacks or security breaches that manipulate or improperly use our systems or networks, compromise
confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt our operations. The
occurrence of such events could have a material adverse effect on our business, financial condition or results of operations.
19
Risks Related to Economic Conditions
Economic conditions and disruptions in the financial markets could have an adverse effect on our business, financial
condition, and results of operations.
Disruptions in the financial markets could have a material adverse effect on our liquidity and financial condition if our
ability to borrow money were to be impaired. Disruptions in the financial markets may also have a material adverse impact
on the availability and cost of credit in the future. Our ability to pay our debt or refinance our obligations will depend on
our future performance, which could be affected by, among other things, prevailing economic conditions. Disruptions in
the financial markets may also have an adverse effect on the U.S. and world economies, which would have a negative
impact on demand for our products. In addition, tightening of credit markets may have an adverse impact on our customers'
ability to finance the sale of their products or our suppliers' ability to provide us with raw materials, either of which could
adversely affect our business and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk management and strategy
The Company maintains a cyber risk management program designed to assess, identify, manage, mitigate, and respond to
cybersecurity threats and incidents. The cyber risk management program is integrated into the Company’s overall
enterprise risk management (“ERM”) program. The ERM program is designed to provide cross-functional board and
executive insight across the business to identify and monitor risks, opportunities and emerging trends that can impact the
Company’s strategic business objectives.
The Company also maintains several processes intended to safeguard our information systems, protect the integrity of our
data and respond to cybersecurity incidents. These processes include a formal information security training program for all
employees, training on matters such as phishing and email security best practices, annual disaster recovery exercises,
targeted access controls, and multi-factor authentication logins. The Company maintains a cybersecurity incident response
process to help ensure a timely and consistent response to actual or attempted cybersecurity incidents impacting the
Company.
The Company engages third-party service providers to aid in monitoring and safeguarding critical assets from
cybersecurity attacks. Through these partnerships, the Company leverages specialized knowledge, insights, and practices to
enhance the effectiveness of its cybersecurity strategies. Key third-party services include 24/7 active and passive
monitoring and mitigation of the Company’s network, endpoints, and data. Additionally, the Company has contractual
obligations in place with third-party service providers to adhere to specific information security standards and to promptly
notify and collaborate with management in the event of qualifying cybersecurity incidents.
As of the date of this Annual Report on Form 10-K, the Company is not aware of any cybersecurity incidents that have had,
or are reasonably likely to have, a material impact on our business or operations. However, due to the evolving nature of
cyber threats and their increased sophistication, there remains the potential for adverse impacts on the Company should a
cybersecurity incident occur. These impacts could include reputational damage, competitive harm, operational disruptions,
financial costs, and regulatory actions. Please refer to the risk factor titled "Cybersecurity incidents may threaten our
confidential information, disrupt operations and result in harm to our reputation and adversely impact our business and
financial performance." See Part I, Item 1A for further information regarding cybersecurity risks and potential impacts on
our business and results of operations.
Governance
Management's responsibility
The Company’s senior executive team, which includes our Director of Information Systems, is responsible for providing
input and oversight of our ERM program, including assessing and managing our material risks from cybersecurity threats.
The senior executive team is informed about and oversees the prevention, detection, mitigation, and remediation of
cybersecurity incidents through their management of, and participation in, our cybersecurity risk management and strategy
processes. The senior executive team provides an in-depth annual report and quarterly updates on our enterprise risks,
including cybersecurity risks, to present to the full Board.
20
Board oversight
While management is responsible for the day-to-day management of cybersecurity risks, our Board maintains principal
oversight responsibility for our enterprise risk management, including cybersecurity. The Board has responsibility for,
among other things, oversight of the Company’s information technology and cybersecurity processes and procedures,
including oversight of risks from cybersecurity threats and the steps management has taken to monitor and mitigate such
risks. The Board reviews and discusses with management, at least annually:
•
the adequacy and effectiveness of our information technology security processes and procedures;
•
the assessment of risks and threats to our information technology systems;
•
the internal controls regarding information technology security and cybersecurity; and
•
the steps management has taken to monitor and mitigate information technology security and cybersecurity risks
and to remediate the effects of any cybersecurity incidents that may occur.
ITEM 2. PROPERTIES
Core Molding Technologies has its headquarters in Columbus, Ohio, and operates six production facilities in three
countries, United States, Canada and Mexico. Four of the production facilities are owned and the remaining two are leased.
We consider our properties to generally be in good condition, well maintained, and suitable and adequate to meet our
business requirements for the foreseeable future. We do not anticipate difficulty in renewing existing leases as they expire
or in finding alternative facilities. All owned facilities are subject to liens securing the Company's obligations under our
revolving and term loans as described in Note 9, Debt to the Consolidated Financial Statements included herein.
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company is involved in litigation incidental to the conduct of its business. The Company is not
aware of any material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any
of their property is the subject.
ITEM 4. MINE SAFETY DISCLOSURE
None.
21
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Company's common stock is traded on the NYSE American LLC under the symbol “CMT”. The Company's common
stock was held by 293 holders of record on March 10, 2025.
We repurchased 244,701 shares of our common stock during the year ended December 31, 2024. The following table
provides information with respect to repurchases of common stock by us and our “affiliated purchasers” (as defined by
Rule 10b-18(a)(3) under the Exchange Act) during the three months ended December 31, 2024.
Period
Total number of
shares purchased
Average price paid
per share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Maximum Amount
that May Yet be
Purchased Under the
Plans or Programs(1)
October 1 to 31, 2024
— $
—
— $
5,136,000
November 1 to 30, 2024
—
—
—
5,136,000
December 1 to 31, 2024
36,170
15.95
36,170
4,561,000
Total
36,170 $
15.95
36,170
—
1. On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program
authorizing the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. Repurchases
of shares of common stock under the stock repurchase program are made in the open market and in accordance
with applicable securities laws. The stock repurchase program does not obligate the Company to acquire any
particular amount of common stock, and it may be suspended or terminated at any time at the Company’s
discretion.
ITEM 6. [RESERVED]
22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
DESCRIPTION OF THE COMPANY
Core Molding Technologies and its subsidiaries operate in the engineered materials market as one operating segment as a
molder of thermoplastic and thermoset structural products. During the year ended December 31, 2024 the Company's
operating segment consisted of one component reporting unit. The Company produces and sells molded products for varied
markets, including medium and heavy-duty trucks, power sports, building products, industrial and utilities and other
commercial markets. Core Molding Technologies has its headquarters in Columbus, Ohio, and operates six production
facilities in the United States, Canada and Mexico.
BUSINESS OVERVIEW
General
The Company’s business and operating results are directly affected by changes in overall customer demand, operational
costs, and performance and leverage of our fixed cost and selling, general and administrative ("SG&A") infrastructure.
Product sales fluctuate in response to several factors, including many that are beyond the Company’s control, such as
general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our
customers’ production rates and inventory levels. Product sales consist of demand from customers in many different
markets with different levels of cyclicality and seasonality. The Company's largest market, North American truck, which is
highly cyclical, accounted for 56%, 52%, and 45% of the Company’s product revenue for the years ended December 31,
2024, 2023, and 2022, respectively.
Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw
materials, labor, and overhead operating costs. The Company has certain contractual commitments that restrict its ability to
pass through changes in input costs to certain customers. As a result, during periods of significant increases or decreases in
input costs operating results may be impacted.
Performance is also affected by manufacturing efficiencies, including items such as on time delivery, quality, scrap, and
productivity. Market factors of supply and demand can impact operating costs. In periods of rapid increases or decreases in
customer demand, the Company is required to ramp operational activity up or down quickly, which may impact
manufacturing efficiencies more than in periods of steady demand.
Operating performance is also dependent on the Company’s ability to effectively launch new customer programs, which are
typically extremely complex in nature. The start of production of a new program is the result of a process of developing
new molds and assembly equipment, validation testing, manufacturing process design, development and testing, along with
training and often hiring employees. Meeting the targeted levels of manufacturing efficiency for new programs usually
occurs over time as the Company gains experience with new tools and processes. Therefore, during a new program launch
period, start-up costs and inefficiencies can affect operating results.
Business Outlook
Looking forward, based on industry analyst projections, customer forecasts, cyclical demand, and customer programs
ramping down throughout 2025, offset by anticipated program launches and price changes, the Company expects revenues
for first half of the calendar year 2025 to decrease by approximately 5 to 10 percent as compared to 2024, but remain flat
for the full year 2025 as compared to 2024. The Company also expects a change in mix in 2025 as compared to 2024
between product revenues and tooling revenues as new programs launch during 2025.
During the second half of 2024 and continuing through 2026, the Company’s business with Volvo is transitioning from
existing programs that the Company currently supplies to new programs that the Company does not support.
Notwithstanding this transition and the completion of existing programs with Volvo, the Company continues to actively bid
for new Volvo business, which we believe we will continue to secure outside of the current programs. Going forward we
remain focused on continuing to replace phased out business from existing programs with new programs from Volvo or
other customers.
The Company’s raw material supply chains remain stable, and the Company anticipates raw material pricing in 2025 to
remain flat or slightly higher as compared to 2024; however, if tariffs are implemented in North America, the Company
23
anticipates raw material cost to increase in 2025 as compared to 2024. Labor markets have also stabilized, although at
higher cost levels over the past several years. The Company does not anticipate challenges in hiring hourly labor, although
management believes wage pressure will continue, especially in Mexico.
2024 compared to 2023
Net sales for the years ended December 31, 2024 and 2023 totaled $302,378,000 and $357,738,000, respectively. Included
in total sales were tooling project sales of $11,286,000 and $10,363,000 for the years ended December 31, 2024 and 2023,
respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period
basis. Product sales, excluding tooling project sales, for the year ended December 31, 2024 were $291,092,000 compared
to $347,375,000 for the same period in 2023. The decrease in sales is primarily the result of lower demand from customers
in all of the Company's significant markets.
The Company's product sales for the year ended December 31, 2024 compared to the same period of 2023 by market are as
follows (in thousands):
2024
2023
Medium and heavy-duty truck
$ 163,915
181,376
Power sports
$
68,445
84,688
Building products
$
17,011
28,743
Industrial and utilities
$
18,829
23,658
All other
$
22,892
28,910
Net product revenue
$ 291,092
$ 347,375
Gross margin was approximately 17.6% of sales for the year ended December 31, 2024, compared with 18.0% for the year
ended December 31, 2023. The gross margin percentage decrease was due to lower fixed cost leverage of 1.4% and
unfavorable product mix and production inefficiencies of 1.3% offset by net changes in selling price and raw material cost
of 2.3%.
Selling, general and administrative expense ("SG&A") totaled $36,565,000 for the year ended December 31, 2024, which
included severance expense of $1,294,000. Excluding severance expense, SG&A cost for the year ended December 31,
2024 totaled $35,271,000 compared to $37,983,000 in 2023. Decreased SG&A expenses resulted primarily from lower
bonus, labor and benefits of $2,380,000 and lower stock compensation of $426,000, offset by higher foreign currency
translation of $1,336,000.
Net interest income totaled $193,000 for the year ended December 31, 2024, compared to net interest expense of
$1,011,000 for the year ended December 31, 2023. The Company recognized interest income of $1,443,000 from
investment of the Company's accumulated cash balances during the year ended December 31, 2024 compared to $357,000
in 2023.
Income tax expense was approximately $4,182,000, or 23.9% of total income before income taxes for the year ended
December 31, 2024. Income tax expense was approximately $5,422,000, or 21.3% of total income before income taxes for
the year ended December 31, 2023. The increase in tax expense percentage year-over-year was due to increase in foreign
taxes and permanent compensation differences, offset by foreign direct investment tax deduction.
The Company recorded net income for 2024 of $13,299,000 or $1.51 per diluted share, compared with net income of
$20,324,000 or $2.31 per diluted share for 2023.
Comprehensive income totaled $10,290,000 in 2024, compared with comprehensive income of $22,572,000 in 2023. The
decrease was primarily related to decreases in net income of $7,025,000, foreign currency hedges of $2,674,000, and post
retirement benefit plan adjustments of $2,747,000.
24
2023 compared to 2022
Net sales for the years ended December 31, 2023 and 2022 totaled $357,738,000 and $377,376,000, respectively. Included
in total sales were tooling project sales of $10,363,000 and $18,675,000 for the years ended December 31, 2023 and 2022,
respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period
basis. Product sales, excluding tooling project sales, for the year ended December 31, 2023 were $347,375,000 compared
to $358,701,000 for the same period in 2022. The decrease in sales is primarily the result of lower demand from customers
in building products and industrial and utilities industries, offset by higher demand from customers in the heavy-duty truck
industry, full year impact of price increases related to the recoupment of raw material inflation costs, and revenues from
new program launches.
The Company's product sales for the year ended December 31, 2023 compared to the same period of 2022 by market are as
follows (in thousands):
2023
2022
Medium and heavy-duty truck
$ 181,376
$ 158,649
Power sports
84,688
84,727
Building products
28,743
41,038
Industrial and utilities
23,658
27,988
All other
28,910
46,299
Net product revenue
$ 347,375
$ 358,701
Gross margin was approximately 18.0% of sales for the year ended December 31, 2023, compared with 13.9% for the year
ended December 31, 2022. The gross margin percentage increase was due to net changes in selling price and raw material
cost of 5.3% and favorable product mix and production efficiencies of 0.6%, offset by lower fixed cost leverage of 1.2%
and unfavorable foreign currency impact of 0.6%.
Selling, general and administrative expense ("SG&A") totaled $37,983,000 for the year ended December 31, 2023,
compared to $34,399,000 in 2022. The increase in SG&A expense primarily resulted from higher labor and benefit costs of
$2,150,000, higher bonus of $907,000 and higher professional fees of $627,000. In connection with the decrease in sales,
the Company has recognized a one-time severance expense totaling $570,000.
During the year ended December 31, 2022, the Company refinanced its existing credit facility. As a result, the Company
recorded one-time losses of $1,234,000 from writing off outstanding deferred loan costs and $348,000 from prepayment
fees associated with the repayment of the FGI Term Loan.
Net interest expense totaled $1,011,000 for the year ended December 31, 2023, compared to interest expense of $1,960,000
for the year ended December 31, 2022. The decrease in net interest expense was due to lower average senior debt balance
for the year ended December 31, 2023, when compared to the same period in 2022. The Company also recognized
$346,000 of interest income during the year ended December 31, 2023.
Income tax expense was approximately $5,422,000, or 21.3% of total income before income taxes for the year ended
December 31, 2023. Income tax expense for the year ended December 31, 2022 was $2,382,000 and includes statutory
foreign tax expense from foreign taxable income offset by tax benefits from tax losses in the United States. Income tax
expense for the year ended December 31, 2022, also includes a valuation allowance reversal of $2,363,000 related to
deferred tax assets related to the federal jurisdiction in the United States.
The Company recorded net income for 2023 of $20,324,000 or $2.31 per diluted share, compared with net income of
$12,203,000 or $1.44 per diluted share for 2022.
Comprehensive income totaled $22,572,000 in 2023, compared with comprehensive income of $14,181,000 in 2022. The
increase was primarily related to an increase in net income of $8,121,000.
25
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third
parties. Primary cash requirements are for operating expenses, capital expenditures, repayments of debt, and acquisitions.
The Company from time to time will enter into foreign exchange contracts and interest rate swaps to mitigate risk of
foreign exchange and interest rate volatility. As of December 31, 2024, the Company had outstanding foreign exchange
contracts and interest rate swaps with notional amounts totaling $29,668,000 and $21,719,000, respectively. At December
31, 2023, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling
$9,195,000 and $23,229,000, respectively.
Cash provided by operating activities totaled $35,151,000 for the year ended December 31, 2024. Net income of
$13,299,000 positively impacted operating cash flows. Cash flows were positively impact by non-cash deductions in net
income from depreciation and amortization, share based compensation and deferred income taxes of $13,399,000,
$2,495,000 and $473,000, respectively. A decrease in working capital of $4,064,000 resulted in an increase in cash. The
increase in cash from working capital was primarily related to net changes in accounts receivable, inventory and other
prepaid assets, offset by net changes in accounts payable and other accrued liabilities.
Cash used in investing activities totaled $11,525,000 for the year ended December 31, 2024, related to purchases of
property, plant and equipment for additional capacity, automation, new programs and equipment improvements at the
Company’s production facilities. The Company anticipates spending approximately $10,000,000 to $12,000,000 on
property, plant and equipment purchases for all of the Company's operations for the year ended December 31, 2025. The
Company plans on using cash on hand and cash from operations to finance capital expenditures. At December 31, 2024,
purchase commitments for capital expenditures in progress were approximately $2,802,000.
Cash used in financing activities totaled $5,927,000 for the year ended December 31, 2024. Cash activity primarily
consisted of the purchase of treasury stock related to the Company's stock buy back plan of $2,939,000, purchase of
treasury stock of $1,440,000 in exchange for payment of taxes related to net share settlements of equity awards and
repayments of long-term debt of $1,548,000.
At December 31, 2024, the Company had $41,803,000 of cash on hand, an available revolving line of credit of
$25,000,000 and capex line of credit of $25,000,000. If a material adverse change in the financial position of the Company
should occur, or if actual sales or expenses are substantially different than what has been forecasted, the Company's
liquidity and ability to obtain further financing to fund future operating and capital requirements could be negatively
impacted.
Management believes cash on hand, cash flow from operating activities and available borrowings under the Company’s
credit agreement will be sufficient to meet the Company’s current liquidity needs.
Huntington Credit Agreement
On July 22, 2022, the Company entered into a credit agreement and on March 7, 2024, entered into the First Amendment to
the credit agreement (as amended, the “Huntington Credit Agreement”) with The Huntington National Bank
(“Huntington”), as the sole lender, administrative agent, lead arranger and book runner, and the lenders from time to time
thereto. Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured
loans (the “Huntington Loans”) in the maximum aggregate principal amount of $75,000,000 ($38,689,000 of which was
advanced to the Company on July 22, 2022), comprised of three $25,000,000 commitments: a term loan commitment, a
CapEx loan commitment, and a revolving loan commitment.
At the option of the Company, the Huntington Loans shall be comprised of Alternative Base Rate (ABR) Loans or Secure
Overnight Financing Rate (SOFR) Loans.
ABR Loans bear interest at a per annum rate equal to ABR plus a margin of 280 to 330 basis points determined based on
the Company’s leverage ratio. ABR is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in
effect on such day plus 0.50% per annum and (c) Daily Simple SOFR for such day (taking into account any floor set forth
in the definition of “Daily Simple SOFR”) plus 1.00% per annum; provided, that if the ABR shall be less than 0.00%, then
ABR shall be deemed to be 0.00%.
26
SOFR Loans bear interest at a per annum rate equal to Daily Simple SOFR plus a margin of 180 to 230 basis points
determined based on the Company’s leverage ratio. Daily Simple SOFR means, for any day (a “SOFR Rate Day”), a rate
per annum equal to the greater of (a) SOFR for the day (such day, the “SOFR Determination Date”) that is five (5) U.S.
Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day,
such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S.
Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is
published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) 0.00%.
The Company’s obligations under the Huntington Credit Agreement are secured by all of the U.S. and Canadian assets of
the Company, including all of its equity interests in each of the Company’s U.S. and Canadian subsidiaries and 65% of the
Company’s equity interest in its Mexican subsidiaries, and are unconditionally guaranteed by certain subsidiaries of the
Company.
The Huntington Credit Agreement contains certain customary representations and warranties, conditions, affirmative and
negative covenants and events of default. The Company is in compliance with such covenants as of December 31, 2024.
Voluntary prepayments of amounts outstanding under the Huntington Loans are permitted at any time without premium or
penalty.
In connection with the credit agreement, the Company incurred debt origination fees of $402,000 related to the Huntington
Credit Agreement, which is being amortized over the life of the Credit Agreement. The aggregate unamortized deferred
financing fees as of December 31, 2024 totaled $210,000.
Huntington Capex Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured Capex loan
(the “Huntington Capex Loan”) in the maximum aggregate principal amount of $25,000,000 (none of which was advanced
to the Company on July 22, 2022 and through December 31, 2024). Proceeds of the Huntington Capex Loan would be used
to finance the ongoing capital expenditure needs of the Company.
Any borrowings from the Huntington Capex Loan will be converted to new term loans annually each February, beginning
February 2025, and will have monthly principal repayments based on a sixty-month amortization period with all amounts
outstanding on the Huntington Capex Loan being fully due on July 22, 2027.
Huntington Revolving Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan
commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on
July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of
December 31, 2024. The interest rate for the Huntington Revolving Loan was 6.33% as of December 31, 2024.
The Huntington Credit Agreement makes available to the Company a revolving commitment in the maximum amount of
$25,000,000 at the Company’s option at any time during the five-year period following the closing. The revolving loan
commitment terminates, and all outstanding borrowings thereunder must be repaid on July 22, 2027.
Huntington Term Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a Term Loan
commitment (the “Huntington Term Loan”) of $25,000,000 ($25,000,000 of which was advanced to the Company on July
22, 2022). The Huntington Term Loan is to be repaid in monthly installments beginning August 2022 of $104,000 per
month for the first 24 months, $156,000 per month for the next 24 months, $208,000 for the next 12 months and the
remaining balance to be paid on July 22, 2027. The interest rate for the Huntington Term Loan was 6.11% as of
December 31, 2024.
Interest Rate Swap Agreement
The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July
2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term
Loan. Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for
the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $491,000 at December 31,
2024.
Leaf Capital Funding
On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment.
The parties agreed to a fixed interest rate of 5.50% and a term of 60 months.
27
Shelf Registration
On December 22, 2023 the Company filed a universal shelf Registration Statement on Form S-3 (the “Registration
Statement”) with the SEC in accordance with the Securities Act of 1933, as amended, which became effective on January
8, 2024. The Registration Statement replaces an existing shelf Registration Statement which expired on December 16,
2023. The Registration Statement registered common stock, preferred stock, debt securities, warrants, depositary shares,
rights, units, and any combination of the foregoing, for a maximum aggregate offering price of up to $50 million, which
may be sold from time to time. The terms of any securities offered under the Registration Statement and intended use of
proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the
SEC at the times of the offerings. The Registration Statement has a three-year term.
CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET TRANSACTIONS
The Company has the following minimum commitments under contractual obligations, including purchase obligations, as
defined by the SEC. A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable
and legally binding on the Company and that specifies all significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Other long-term
liabilities are defined as long-term liabilities that are reflected on the Company’s balance sheet under accounting principles
generally accepted in the United States. Based on this definition, the table below includes only those contracts which
include fixed or minimum obligations. It does not include normal purchases, which are made in the ordinary course of
business.
The following table provides aggregated information about the maturities of contractual obligations and other long-term
liabilities as of December 31, 2024:
2025
2026
2027
2028
2029 and
after
Total
Long-term debt
$
1,886,000 $
2,136,000 $ 17,708,000 $
— $
— $ 21,730,000
Interest(A)
980,000
891,000
596,000
—
—
2,467,000
Operating lease
obligations
1,267,000
773,000
262,000
—
—
2,302,000
Contractual
commitments for
capital expenditures
$
2,802,000
—
—
—
—
2,802,000
Post retirement benefits
146,000
164,000
180,000
189,000
2,619,000
3,298,000
Total
$
7,081,000 $
3,964,000 $ 18,746,000 $
189,000 $
2,619,000 $ 32,599,000
(A)Estimated future interest payments based on the effective interest rate as of December 31, 2024.
As of December 31, 2024 and 2023, the Company had no significant off-balance sheet arrangements.
CRITICAL ACCOUNTING ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss the Company’s
consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these consolidated financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to
accounts receivable, inventories, goodwill and other long-lived assets, self-insurance, post-retirement benefits, revenue
recognition and income taxes. Management bases its estimates and judgments on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions and conditions.
Management believes the following critical accounting policies, among others, affect its more significant judgments and
estimates used in the preparation of its consolidated financial statements.
28
Accounts Receivable Allowances
Management maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers
to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be required. The Company determined that no
allowance for doubtful accounts was needed at December 31, 2024 or December 31, 2023, respectively. Management also
records estimates for customer returns and deductions, discounts offered to customers, and for price adjustments. Should
customer returns and deductions, discounts, and price adjustments fluctuate from the estimated amounts, additional
allowances may be required. The Company had an allowance for estimated chargebacks of $227,000 at December 31, 2024
and $138,000 at December 31, 2023.
Inventories
Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable
value. The inventories are accounted for using the first-in, first-out (FIFO) method of determining inventory costs.
Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are
recorded based on historical and anticipated usage. The Company has recorded an allowance for slow moving and obsolete
inventory of $1,392,000 at December 31, 2024 and $671,000 at December 31, 2023.
Long-Lived Assets
Long-lived assets consist primarily of property, plant and equipment and finite-lived intangibles. The recoverability of
long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in
the business environment. The Company evaluates, whether impairment exists for long-lived assets on the basis of
undiscounted expected future cash flows from operations before interest. There was no impairment of the Company's long-
lived assets for the years ended December 31, 2024, 2023, and 2022.
Goodwill
The purchase consideration of acquired businesses have been allocated to the assets and liabilities acquired based on the
estimated fair values on the respective acquisition dates. Based on these values, the excess purchase consideration over the
fair value of the net assets acquired was allocated to goodwill. The Company accounts for goodwill in accordance with
FASB ASC Topic 350, Intangibles - Goodwill and Other. FASB ASC Topic 350 prohibits the amortization of goodwill and
requires these assets be reviewed for impairment at the reporting unit level.
The annual impairment tests of goodwill may be completed through qualitative assessments; however the Company may
elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for the reporting unit in any
period. The Company may resume the qualitative assessment for the reporting unit in any subsequent period.
Under a qualitative and quantitative approach, the impairment test for goodwill consists of an assessment of whether it is
more-likely-than-not that the reporting unit’s fair value is less than its carrying amount. As part of the qualitative
assessment, the Company considers relevant events and circumstances that affect the fair value or carrying amount of the
Company. Such events and circumstances could include changes in economic conditions, industry and market conditions,
cost factors, overall financial performance, reporting unit specific events and capital markets pricing. The Company places
more weight on the events and circumstances that most affect the Company's fair value or carrying amount. These factors
are all considered by management in reaching its conclusion about whether to perform step one of the impairment test. If
the Company elects to bypass the qualitative assessment for the reporting unit, or if a qualitative assessment indicates it is
more-likely-than-not that the estimated carrying value of the reporting unit exceeds its fair value, the Company proceeds to
a quantitative approach.
The Company performed its annual impairment test for the years end December 31, 2024 and 2023, and determined there
was no impairment of the Company’s goodwill.
Self-Insurance
The Company is self-insured with respect to Columbus, Ohio; Gaffney, South Carolina; Winona, Minnesota; and
Brownsville, Texas for medical, dental and vision claims and Columbus, Ohio for workers’ compensation claims, all of
which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to
its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental and vision
claims incurred but not reported and worker’s compensation claims incurred but not reported at December 31, 2024 and
29
December 31, 2023 of $1,087,000 and $988,000, respectively, included within the Other Current Liabilities on the
Company's Consolidated Balance Sheets.
Post-Retirement Benefits
Management records an accrual for post-retirement costs associated with the health care plan sponsored by the Company
for certain retirees. Should actual results differ from the assumptions used to determine the reserves, additional provisions
may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on
the Company's operations. The effect of a change in healthcare costs is described in Note 14 - Post Retirement Benefits.
The Company had a liability for post-retirement healthcare benefits based on actuarial computed estimates of $3,298,000 at
December 31, 2024 and $3,116,000 at December 31, 2023.
Revenue Recognition
The Company historically has recognized revenue from two streams, product revenue and tooling revenue. Product
revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products.
Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the
customer and is entitled to payment upon shipment. In certain circumstances, the Company recognizes revenue from
product sales when products are produced and the customer takes control at our production facility.
Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program
for a customer. Given that the Company is providing a significant service of producing highly interdependent component
parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the
capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue
either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company
recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance,
which is when the customer has legal title to the tools.
Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over
time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost
measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with
the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or
services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on
the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are
recorded proportionally as costs are incurred.
Income Taxes
The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is
more likely than not to realize deferred tax benefits through the generation of future taxable income. Management reviews
all available evidence, both positive and negative, to assess the long-term earnings potential of the Company using a
number of alternatives to evaluate financial results in economic cycles at various industry volume conditions. The projected
availability of taxable income to realize the tax benefits from the reversal of temporary differences before expiration of
these benefits are also considered. The Company evaluates provisions and deferred tax assets quarterly to determine if
adjustments to our valuation allowance are required based on the consideration of all available evidence.
As of December 31, 2024 the Company had a net deferred tax asset of $1,454,000 and $183,000 related to tax positions in
Mexico and Canada and deferred tax liabilities of $1,219,000 related to tax positions in the United States. Deferred tax
assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are
included in "Other non-current liabilities" on the Consolidated Balance Sheets. As of December 31, 2024, the Company
had a valuation allowance of $1,265,000 against the deferred tax asset related to local tax positions in the United States,
due to cumulative losses over the last three years and uncertainty related to the Company’s ability to realize the deferred
assets. The Company believes that the deferred tax assets associated with the Mexican and Canadian tax jurisdictions are
more-likely-than-not to be realizable based on estimates of future taxable income.
Management recognizes the financial statement effects of a tax position when it is more likely than not the position will be
sustained upon examination.
30
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU
requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional
information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after
December 15, 2024. As this accounting standard only impacts disclosure, it will not have a material impact on the
Company's Consolidated Financial Statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk results from changes in the price of commodities used in its manufacturing operations.
Core Molding Technologies is also exposed to fluctuations in interest rates and foreign currency fluctuations associated
with the Mexican Peso and Canadian Dollar. The Company does not hold any material market risk sensitive instruments for
trading purposes. The Company uses derivative financial instruments to hedge exposure to fluctuations in foreign exchange
rates and interest rates.
The Company has the following three items that are sensitive to market risks: (1) non-hedged loans under the Huntington
Credit Agreement, all of which bear a variable interest rate; (2) non-hedged foreign currency purchases in which the
Company purchases Mexican Pesos and Canadian Dollars with United States Dollars to meet certain obligations; and (3)
raw material purchases in which the Company purchases various resins, fiberglass, and metal components for use in
production. The prices and availability of these materials are affected by the prices of crude oil, natural gas and other
feedstocks, tariffs, as well as processing capacity versus demand.
Assuming a hypothetical 10% change in short-term interest rates, interest paid on the Term Loan would be impacted, as the
interest rate on these loans is based upon SOFR. It would not, however, have a material effect on earnings before tax as the
Company has entered into a hedge to offset changes in SOFR.
Assuming a hypothetical 10% decrease in the United States Dollar to Mexican Peso and Canadian Dollar exchange rate,
the Company would be impacted by an increase in operating costs, which would have an adverse effect on operating
margins.
Assuming a hypothetical 10% increase in commodity prices, Core Molding Technologies would be impacted by an
increase in raw material costs, which would have an adverse effect on operating margins.
31
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and the Board of Directors of
Core Molding Technologies, Inc. and Subsidiaries
Columbus, Ohio
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Core Molding Technologies, Inc. and Subsidiaries (the
"Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income,
stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the
related notes and Schedule II (collectively referred to as the "financial statements"). We also have audited the Company’s
internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control –
Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the
three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:
(2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
32
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that
there are no critical audit matters.
Crowe LLP
We have served as the Company's auditor since 2009.
Oakbrook Terrace, Illinois
March 11, 2025
33
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except for per share data)
Years Ended December 31,
2024
2023
2022
Net sales
$
302,378 $
357,738 $
377,376
Total cost of sales
249,118
293,218
324,974
Gross margin
53,260
64,520
52,402
Selling, general and administrative expense
36,565
37,983
34,399
Operating income
16,695
26,537
18,003
Other income and expense
Loss due to extinguishment of debt
—
—
1,582
Net periodic post-retirement benefit
(593)
(220)
(124)
Net interest (income) expense
(193)
1,011
1,960
Total other (income) and expense
(786)
791
3,418
Income before income taxes
17,481
25,746
14,585
Income taxes:
Current
3,709
2,949
5,851
Deferred
473
2,473
(3,469)
Total income taxes
4,182
5,422
2,382
Net income
$
13,299 $
20,324 $
12,203
Net income per share of common stock:
Basic
$
1.53 $
2.37 $
1.44
Diluted
$
1.51 $
2.31 $
1.44
See notes to consolidated financial statements.
34
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands)
Years Ended December 31,
2024
2023
2022
Net income
$
13,299 $
20,324 $
12,203
Other comprehensive income:
Foreign currency hedging derivatives:
Unrealized hedge gain(loss)
(2,700)
706
(85)
Income tax benefit (expense)
571
(161)
27
Interest rate hedging derivatives:
Unrealized hedge gain (loss)
(33)
(240)
765
Income tax benefit (expense)
7
50
(161)
Post retirement benefit plan adjustments:
Net actuarial gain (loss)
(740)
3,026
2,309
Prior service costs
(496)
(496)
(496)
Income tax benefit (expense)
382
(637)
(381)
Comprehensive income
$
10,290 $
22,572 $
14,181
See notes to consolidated financial statements.
35
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except for share data)
December 31,
2024
2023
Assets:
Current assets:
Cash and cash equivalents
$
41,803
$
24,104
Accounts receivable, net
30,118
41,711
Inventories, net
18,346
22,063
Foreign tax receivable
5,861
6,380
Prepaid expenses and other current assets
6,760
8,621
Total current assets
102,888
102,879
Right of use asset
2,112
3,802
Property, plant and equipment, net
80,807
81,185
Goodwill
17,376
17,376
Intangibles, net
4,430
6,017
Other non-current assets
1,937
2,118
Total Assets
$
209,550
$
213,377
Liabilities and Stockholders' Equity:
Liabilities:
Current liabilities:
Current portion of long-term debt
$
1,814
$
1,468
Accounts payable
17,115
23,958
Contract liabilities
2,286
5,204
Accrued liabilities:
Compensation and related benefits
7,585
10,498
Other
7,911
5,058
Total current liabilities
36,711
46,186
Other non-current liabilities
2,620
3,759
Long-term debt
19,706
21,519
Post retirement benefits liability
3,152
2,960
Total Liabilities
62,189
74,424
Commitments and Contingencies
Stockholders' Equity:
Preferred stock — $0.01 par value, authorized shares - 10,000,000; no shares outstanding at
December 31, 2024 and December 31, 2023
—
—
Common stock — $0.01 par value, authorized shares - 20,000,000; outstanding shares:
8,614,395 at December 31, 2024 and 8,655,384 at December 31, 2023
86
86
Paid-in capital
45,760
43,265
Accumulated other comprehensive income, net of income taxes
2,292
5,301
Treasury stock — at cost, 4,236,853 shares at December 31, 2024 and 3,992,152 shares at
December 31, 2023
(36,145)
(31,768)
Retained earnings
135,368
122,069
Total Stockholders' Equity
147,361
138,953
Total Liabilities and Stockholders' Equity
$
209,550
$
213,377
See notes to consolidated financial statements.
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statement of Stockholders’ Equity
(In thousands, except for share data)
Common Stock
Outstanding
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
Treasury
Stock
Retained
Earnings
Total
Stockholders'
Equity
Shares
Amount
Balance at January 1, 2021
8,235,740
$
82
$
38,013
$
1,075
$
(28,617)
$
89,542
$
100,095
Net income
12,203
12,203
Change in post retirement benefits, net of tax of $381
1,432
1,432
Unrealized foreign currency hedge, net of tax of $27
(58)
(58)
Change in interest rate swaps, net of tax of $161
604
604
Restricted stock vested
230,201
2
2
Purchase of treasury stock related to net settlement of equity
d
(48,285)
(482)
(482)
Share-based compensation
2,329
2,329
Balance at December 31, 2022
8,417,656
$
84
$
40,342
$
3,053
$
(29,099)
$
101,745
$
116,125
Net income
20,324
20,324
Change in post retirement benefits, net of tax of $637
1,893
1,893
Unrealized foreign currency hedge, net of tax of $161
545
545
Change in interest rate swaps, net of tax of $50
(190)
(190)
Restricted stock vested
262,788
2
2
Purchase of treasury stock related to net settlement of equity
awards
(125,701)
(1)
(2,669)
(2,670)
Exercise of SARs
100,641
1
1
Share-based compensation
2,923
2,923
Balance at December 31, 2023
8,655,384
$
86
$
43,265
$
5,301
$
(31,768)
$
122,069
$
138,953
Net income
13,299
13,299
Change in post retirement benefits, net of tax of $382
(854)
(854)
Change in foreign currency hedge, net of tax of $571
(2,129)
(2,129)
Change in interest rate swap, net of tax of $7
(26)
(26)
Restricted stock vested
203,712
2
2
Purchase of treasury stock related to net settlement of equity
awards
(72,658)
(1)
(1,439)
(1,440)
Purchase of treasury stock
(172,043)
(1)
(2,938)
(2,939)
Share-based compensation
2,495
2,495
Balance at December 31, 2024
8,614,395
$
86
$
45,760
$
2,292
$
(36,145)
$
135,368
$
147,361
See notes to consolidated financial statements.
36
37
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Years Ended
2024
2023
2022
Cash flows from operating activities:
Net income
$
13,299 $
20,324 $
12,203
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
13,399
12,912
11,884
Deferred income taxes
473
2,473
(3,469)
Share-based compensation
2,495
2,923
2,329
Loss on disposal of assets
241
80
—
Loss from extinguishment of debt
—
—
1,234
Loss (gain) on foreign currency
1,180
(58)
396
Change in operating assets and liabilities:
Accounts receivable
11,593
2,550
(9,000)
Inventories
3,718
1,808
1,258
Prepaid and other assets
1,673
(5,825)
928
Accounts payable
(8,105)
(4,916)
5,999
Accrued and other liabilities
(3,729)
3,551
(4,067)
Post retirement benefits liability
(1,086)
(980)
(713)
Net cash provided by operating activities
35,151
34,842
18,982
Cash flows from investing activities:
Purchase of property, plant and equipment
(11,525)
(9,100)
(16,588)
Net cash used in investing activities
(11,525)
(9,100)
(16,588)
Cash flows from financing activities:
Gross borrowings on revolving loans
—
37,098
165,172
Gross repayment on revolving loans
—
(38,962)
(167,732)
Proceeds from term loan
—
—
25,000
Payment of principal of term loan
(1,548)
(1,288)
(25,913)
Payment of deferred loan costs
—
—
(402)
Payments for taxes related to net share settlement of equity
awards
(1,440)
(2,669)
(482)
Purchase of shares of common stock
(2,939)
—
—
Net cash used in financing activities
(5,927)
(5,821)
(4,357)
Net change in cash and cash equivalents
17,699
19,921
(1,963)
Cash and cash equivalents at beginning of year
24,104
4,183
6,146
Cash and cash equivalents at end of year
$
41,803 $
24,104 $
4,183
Cash paid for:
Interest
$
1,074 $
1,234 $
1,677
Income taxes
$
2,158 $
5,250 $
6,649
Non-cash investing activities:
Fixed asset purchases in accounts payable
$
367 $
298 $
868
Non-cash financing activities:
Deposit used in payment of principal on term loans
$
— $
— $
1,200
See notes to consolidated financial statements.
38
Core Molding Technologies, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Basis of Presentation
Core Molding Technologies and its subsidiaries operate in the engineered materials market as one operating segment as a
molder of thermoplastic and thermoset structural products. During the year ended December 31, 2024, the Company's
operating segment consisted of one component reporting unit. The Company produces and sells molded products for varied
markets, including medium and heavy-duty trucks, power sports, building products and other industrial markets. The
Company offers customers a wide range of manufacturing processes to fit various program volumes 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 has its headquarters
in Columbus, Ohio, and operates six production facilities in the following locations: Columbus, Ohio; Gaffney, South
Carolina; Winona, Minnesota; Matamoros and Escobedo, Mexico; and Cobourg, Ontario, Canada. All production facilities
produce structural composite products.
2. Summary of Significant Accounting Policies
Principles of Consolidation - The accompanying consolidated financial statements include the accounts of all subsidiaries
after elimination of all intercompany accounts, transactions, and profits.
Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in
the United States requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and judgments. Management bases its
estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
and conditions.
Revenue Recognition - The Company historically has recognized revenue from two streams, product revenue and tooling
revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and
thermoplastic products. Revenue from product sales is generally recognized as products are shipped, as the Company
transfers control to the customer and is entitled to payment upon shipment. In certain circumstances, the Company
recognizes revenue from product sales when products are produced and the customer takes control at our production
facility.
Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program
for a customer. Given that the Company is providing a significant service of producing highly interdependent component
parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the
capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue
either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company
recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance,
which is when the customer has legal title to the tools.
Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over
time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost
measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with
the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or
services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on
the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are
recorded proportionally as costs are incurred.
Cash and Cash Equivalents - The Company considers all highly liquid investments purchased with an original maturity
of three months or less to be cash equivalents. Cash is held primarily in four banks in three separate countries. The
Company had $41,803,000 cash on hand at December 31, 2024 and had $24,104,000 cash on hand at December 31, 2023.
39
Accounts Receivable Allowances - Management maintains allowances for doubtful accounts for estimated losses resulting
from the inability of its customers to make required payments. If the financial condition of the Company’s customers were
to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The
Company determined that no allowance for doubtful accounts was needed at December 31, 2024 or December 31, 2023,
respectively. Management also records estimates for customer returns and deductions, discounts offered to customers, and
for price adjustments. Should customer returns and deductions, discounts, and price adjustments fluctuate from the
estimated amounts, additional allowances may be required. The Company had an allowance for estimated chargebacks of
$227,000 at December 31, 2024 and $138,000 at December 31, 2023.
Inventories - Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net
realizable value. The inventories are accounted for using the first-in, first-out (FIFO) method of determining inventory
costs. Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete
inventory are recorded based on historical and anticipated usage. The Company has recorded an allowance for slow
moving and obsolete inventory of $1,392,000 at December 31, 2024 and $671,000 at December 31, 2023.
Inventories, net consisted of the following (in thousands):
December 31,
2024
2023
Raw materials and components
$
11,656 $
13,068
Work in process
2,368
2,649
Finished goods
4,322
6,346
Total inventories, net
$
18,346 $
22,063
Contract Assets/Liabilities - Contract assets and liabilities represent the net cumulative customer billings, vendor
payments and revenue recognized for tooling programs. For tooling programs where net revenue recognized and vendor
payments exceed customer billings, the Company recognizes a contract asset. For tooling programs where net customer
billings exceed revenue recognized and vendor payments, the Company recognizes a contract liability. Customer payment
terms vary by contract and can range from progress payments based on work performed or one single payment once the
contract is completed. Contract assets are classified as current and are included in prepaid expenses and other current assets
on the Consolidated Balance Sheets. Contract assets as of December 31, 2024 and 2023 are $758,000 and $77,000,
respectively. During the years ended December 31, 2024 and December 31, 2023, the Company recognized no impairments
on contract assets. Contract liabilities are classified as current on the Consolidated Balance Sheets as of December 31, 2024
and 2023. Contract liabilities as of December 31, 2024 and 2023 are $2,286,000 and $5,204,000, respectively. The
Company recognized $6,069,000 and $2,446,000 for the years ended December 31, 2024 and 2023, respectively,
corresponding with revenue from contract liabilities related to jobs outstanding at December 31, 2023 and December 31,
2022, respectively.
Property, Plant, and Equipment - Property, plant, and equipment are recorded at cost. Depreciation is provided on a
straight-line method over the estimated useful lives of the assets. The carrying amount of long-lived assets is evaluated
annually to determine if adjustment to the depreciation period or to the unamortized balance is warranted.
Ranges of estimated useful lives for computing depreciation are as follows:
Land improvements
20 years
Buildings and improvements
20 - 40 years
Machinery and equipment
3 - 15 years
Tools, dies and patterns
3 - 5 years
Long-Lived Assets - Long-lived assets consist primarily of property, plant and equipment and finite-lived intangibles. The
recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant
events or changes in the business environment. The Company evaluates whether impairment exists for long-lived assets on
the basis of undiscounted expected future cash flows from operations before interest. There was no impairment of the
Company's long-lived assets for the years ended December 31, 2024, 2023 and 2022.
40
Goodwill - The purchase consideration of acquired businesses have been allocated to the assets and liabilities acquired
based on the estimated fair values on the respective acquisition dates. Based on these values, the excess purchase
consideration over the fair value of the net assets acquired was allocated to goodwill. The Company accounts for goodwill
in accordance with FASB ASC Topic 350, Intangibles - Goodwill and Other. FASB ASC Topic 350 prohibits the
amortization of goodwill and requires these assets be reviewed for impairment at the reporting unit level.
The annual impairment tests of goodwill may be completed through qualitative assessments; however the Company may
elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for the reporting unit in any
period. The Company may resume the qualitative assessment for the reporting unit in any subsequent period.
Under a qualitative and quantitative approach, the impairment test for goodwill consists of an assessment of whether it is
more-likely-than-not that the reporting unit’s fair value is less than its carrying amount. As part of the qualitative
assessment, the Company considers relevant events and circumstances that affect the fair value or carrying amount of the
Company. Such events and circumstances could include changes in economic conditions, industry and market conditions,
cost factors, overall financial performance, reporting unit specific events and capital markets pricing. The Company places
more weight on the events and circumstances that most affect the Company's fair value or carrying amount. These factors
are all considered by management in reaching its conclusion about whether to perform step one of the impairment test. If
the Company elects to bypass the qualitative assessment for the reporting unit, or if a qualitative assessment indicates it is
more-likely-than-not that the estimated carrying value of the reporting unit exceeds its fair value, the Company proceeds to
a quantitative approach.
The Company performed its annual impairment test for the years end December 31, 2024 and 2023, and determined there
was no impairment of the Company’s goodwill.
Income Taxes - The Company records deferred income taxes for differences between the financial reporting basis and
income tax basis of assets and liabilities. A detailed breakout is located in Note 13 - Income Taxes.
Self-Insurance - The Company is self-insured with respect to Columbus, Ohio; Gaffney, South Carolina; Winona,
Minnesota; and Brownsville, Texas for medical, dental and vision claims and Columbus, Ohio for workers’ compensation
claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision
with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical,
dental and vision claims incurred but not reported and worker’s compensation claims incurred but not reported at
December 31, 2024 and December 31, 2023 of $1,087,000 and $988,000, respectively, included within the Other Current
Liabilities on the Company's Consolidated Balance Sheets.
Post Retirement Benefits - Management records an accrual for post retirement costs associated with the health care plan
sponsored by the Company for certain retirees. Should actual results differ from the assumptions used to determine the
reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions
could have an adverse effect on the Company's operations. The effect of a change in healthcare costs is described in Note
14 - Post Retirement Benefits. Core Molding Technologies had a liability for post retirement healthcare benefits based on
actuarial computed estimates of $3,298,000 at December 31, 2024 and $3,116,000 at December 31, 2023.
Fair Value of Financial Instruments - The Company's financial instruments historically consist of long-term debt,
revolving loans, interest rate swaps, foreign currency hedges, accounts receivable, and accounts payable. Further detail is
located in Note 16 - Fair Value of Financial Instruments.
Concentration Risks - The Company has concentration risk related to significant amounts of sales and accounts receivable
with certain customers. The Company had five major customers during the year end December 31, 2024, BRP, Inc.
(“BRP”), International Motors, LLC (“International”), PACCAR, Inc. (“PACCAR”), Yamaha Motor Corporation
(“Yamaha”), and Volvo Group North America, LLC (“Volvo”). Major customers are defined as customers whose current
year sales individually consist of more than ten percent of total sales during any annual or interim reporting period in the
current year. Sales to five major customers comprised 69%, 68% and 64% of total sales in 2024, 2023 and 2022,
respectively (see Note 4 - Major Customers). Concentrations of accounts receivable balances with five customers
accounted for 71% of accounts receivable at December 31, 2024 and 2023, respectively. The Company performs ongoing
credit evaluations of its customers' financial condition. The Company maintains reserves for potential bad debt losses, and
such bad debt losses have been historically within the Company's expectations.
41
As of December 31, 2024, the Company employed a total of 1,570 employees, which consisted of 509 employees in the
United States, 880 employees in Mexico and 181 employees in Canada. The salary workforce consisted of 335 employees,
while 1,235 employees were hourly. Four plant locations making up 67.4% of the workforce are covered by collective
bargaining agreements.
Details on the collective bargaining agreements are as follows:
Plant Location
Union Name
Expiration Date Employees
Columbus, Ohio
International Association of Machinists and Aerospace Workers
("IAM")
August 9, 2025
212
Matamoros,
Mexico
Sindicato de Jorneleros y Obreros
December 31, 2025
657
Cobourg, Canada United Food & Commercial Workers Canada ("UFCW")
November 1, 2025
138
Escobedo,
Mexico
Sindicato de trabajadores de la industria metalica y del comercio
del estado de Nuevo Leon Presidente Benito Juarez Garcia
C.T.M.
February 14, 2026
51
Earnings per Share of Common Stock - Basic earnings per share of common stock is computed based on the weighted
average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock are
computed similarly but include the effect of the assumed exercise of dilutive stock options and vesting of restricted stock
under the treasury stock method. Certain of the Company's restricted shares are entitled to receive dividends and voting
rights applicable to the Company's common stock, irrespective of any vesting requirement. These restricted shares are
considered a participating security and the Company is required to apply the two-class method to consider the impact of the
restricted shares on the calculation of basic and diluted earnings per share. A detailed computation of earnings per share is
located in Note 3 - Net Income (Loss) per Share of Common Stock.
Research and Development - Research and development activities focus on developing new material formulations, new
products, new production capabilities and processes, and improving existing products and manufacturing processes. The
Company does not maintain a separate research and development organization or facility, but uses its production
equipment, as necessary, to support these efforts and cooperates with its customers and its suppliers in research and
development efforts. Manpower to direct and advance research and development is integrated with the existing
manufacturing, engineering, production, and quality organizations. Research and development costs, which are expensed as
incurred, totaled approximately $1.9 million, $1.7 million and $1.6 million in 2024, 2023 and 2022.
Foreign Currency - The functional currency for the Mexican and Canadian operations is the United States Dollar. All
foreign currency asset and liability amounts are remeasured into United States Dollars at end-of-period exchange rates.
Income statement accounts are remeasured at the weighted monthly average rates. Gains and losses resulting from
remeasurement of foreign currency financial statements into United States Dollars and gains and losses resulting from
foreign currency transactions are included in current results of operations. Net foreign currency remeasurement and
transaction activity is included in selling, general and administrative expense. This activity resulted in expense of
$1,045,000 in 2024, income of $291,000 in 2023, and an expense of $401,000 in 2022.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU
requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional
information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after
December 15, 2024. As this accounting standard only impacts disclosure, it will not have a material impact on the
Company's Consolidated Financial Statements.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment
disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to
the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.
This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of
how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding
how to allocate resources. (See Note 18. Segment Reporting for the inclusion of this accounting pronouncement.)
42
3. Net Income per Share of Common Stock
Net income per share of common stock is computed based on the weighted average number of shares of common stock
outstanding during the period. Diluted net income per share of common stock is computed similarly but includes the effect
of the assumed exercise of dilutive stock appreciation rights and restricted stock under the treasury stock method.
The computation of basic and diluted net income per share of common stock is as follows (in thousands, except for per
share data):
December 31,
2024
2023
2022
Net income
$
13,299 $
20,324 $
12,203
Less: net income allocated to participating securities
—
81
180
Net income available to common stockholders
$
13,299 $
20,243 $
12,023
Weighted average shares of common stock — basic
8,693
8,550
8,356
Effect of dilutive securities
94
222
12
Weighted average common and potentially issuable shares of
common stock outstanding — diluted
8,787
8,772
8,368
Basic net income per share of common stock
$
1.53 $
2.37 $
1.44
Diluted net income per share of common stock
$
1.51 $
2.31 $
1.44
The computation of basic and diluted net income per participating share is as follows (in thousands, except for per share
data):
December 31,
2024
2023
2022
Net income allocated to participating securities
$
— $
81
180
Weighted average participating shares outstanding — basic
—
34
125
Effect of dilutive securities
—
—
—
Weighted average participating and potentially issuable participating
shares outstanding — diluted
—
34
125
Basic net income per participating share
$
0.00 $
2.37 $
1.44
Diluted net income per participating share
$
0.00 $
2.37 $
1.44
43
4. Major Customers
The Company had five major customers during the year ended December 31, 2024, BRP, International, PACCAR, Yamaha
and Volvo. Major customers are defined as customers whose sales individually consist of more than ten percent of total
sales during any annual or interim reporting period presented. The loss of a significant portion of sales to these customers
could have a material adverse effect on the business of the Company.
The following table presents sales revenue for the above-mentioned customers for the years ended December 31 (in
thousands):
2024
2023
2022
BRP product sales
$
28,523 $
43,924 $
51,057
BRP tooling sales
1,364
4,778
1,613
Total BRP sales
29,887
48,702
52,670
International product sales
65,084
71,367
60,778
International tooling sales
1,453
751
3,126
Total International sales
66,537
72,118
63,904
PACCAR product sales
38,507
35,745
36,652
PACCAR tooling sales
609
1,618
1,293
Total PACCAR sales
39,116
37,363
37,945
Yamaha product sales
31,679
32,030
22,727
Yamaha tooling sales
—
—
—
Total Yamaha sales
31,679
32,030
22,727
Volvo product sales
41,007
57,168
51,428
Volvo tooling sales
—
1,030
215
Total Volvo sales
41,007
58,198
51,643
Other product sales
86,292
107,141
136,059
Other tooling sales
7,860
2,186
12,428
Total other sales
94,152
109,327
148,487
Total product sales
291,092
347,375
358,701
Total tooling sales
11,286
10,363
18,675
Total sales
$
302,378 $
357,738 $
377,376
44
5. Foreign Operations
The majority of the Company’s product is sold to U.S. based customers in U.S. dollars. The following table provides
information related to sales by country, based on the ship to location of customers' production facilities, for the years ended
December 31 (in thousands):
2024
2023
2022
United States
$
187,973 $
234,504 $
231,391
Mexico
97,896
105,818
113,245
Canada
11,145
11,980
26,829
Other
5,364
5,436
5,911
Total
$
302,378 $
357,738 $
377,376
The following table provides information related to the location of the Company's property, plant and equipment, net, as of
December 31 (in thousands):
2024
2023
United States
$
37,802 $
37,737
Mexico
35,363
34,802
Canada
7,642
8,646
Total
$
80,807 $
81,185
6. Property, Plant, and Equipment
Property, plant, and equipment consisted of the following at December 31 (in thousands):
2024
2023
Land and land improvements
$
6,009 $
6,009
Building and improvements
46,952
45,775
Machinery and equipment
160,838
152,063
Tools, dies, and patterns
3,306
3,222
Additions in progress
3,437
2,264
Total
220,542
209,333
Less accumulated depreciation
(139,735)
(128,148)
Property, plant and equipment, net
$
80,807 $
81,185
Additions in progress at December 31, 2024 and 2023 relate to building improvements and equipment purchases that were
not yet completed and placed in service at year end. At December 31, 2024, commitments for capital expenditures in
progress were $2,802,000 and included $367,000 recorded on the balance sheet in accounts payable. At December 31,
2023, commitments for capital expenditures in progress were $1,100,000, and included $298,000 recorded on the balance
sheet in accounts payable. Depreciation expense was $11,731,000, $11,229,000 and $9,655,000 for the years ended
December 31, 2024, 2023 and 2022, respectively.
7. Leases
The Company has operating leases with fixed and variable payment terms primarily associated with buildings and
warehouses. The Company's leases have remaining lease terms of twelve months to forty-five months, some of which
include options to extend the lease for three years. Operating leases are included in right-of-use ("ROU") assets, other
accrued liabilities and other non-current liabilities on the Consolidated Balance Sheets. ROU assets represent the right to
use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from
the lease.
The Company used the applicable incremental borrowing rate at lease inception date to measure lease liabilities and ROU
assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads
45
commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated,
the Company will utilize the rate implicit in the lease if readily determinable and if not readily determinable, then the
Company will utilize the incremental borrowing rate to perform lease classification tests on lease components and to
measure ROU assets and lease liabilities.
The following table provides information related to the components of lease expense as of December 31 (in thousands):
2024
2023
Operating lease cost
$
1,237 $
2,073
Short-term lease cost
1,782
1,922
Total net lease cost
$
3,019 $
3,995
The following table provides information related to other supplemental balance sheet information related to operating
leases as of December 31, (in thousands):
2024
2023
Operating lease right of use assets
$
2,112 $
3,802
Total operating lease right of use assets
$
2,112 $
3,802
Current operating lease liabilities (A)
$
1,178 $
1,981
Noncurrent operating lease liabilities (B)
997
1,828
Total operating lease liabilities
$
2,175 $
3,809
(A)
Current operating lease liability included in "Other Current Accrued Liabilities" on the Consolidated Balance Sheets.
(B)
Noncurrent operating lease liability included in "Other Non-Current Liabilities" on the Consolidated Balance Sheets.
2024
2023
Weighted average remaining lease term (in years):
1.6
2.4
Weighted average discount rate:
5.5 %
5.5 %
For the years ended December 31, 2024 and 2023, cash payments on amounts included in the measurement of lease
liabilities were $2,079,000 and $2,117,000, respectively. During the year ended December 31, 2024, the Company entered
into a new lease related to the warehouse. During the year ended December 31, 2024, there were $395,000 right of use
assets obtained in exchange for new operating lease liabilities.
As of December 31, 2024, maturities of lease liabilities were as follows (in thousands):
Operating
Leases
2025
$
1,267
2026
773
2027
262
2028
—
Total lease payments
2,302
Less: imputed interest
(127)
Total lease obligations
2,175
Less: current obligations
(1,178)
Long-term lease obligations
$
997
46
8. Goodwill and Intangibles
Goodwill activity for the year consisted of the following at December 31, (in thousands):
2024
2023
Balance at beginning of year
$
17,376 $
17,376
Additions
—
—
Impairment
—
—
Balance at end of year
$
17,376 $
17,376
Intangible assets at December 31, 2024 were comprised of the following (in thousands):
Definite-lived Intangible Assets
Amortization
Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Trade Name
25 years
$
250 $
(99) $
151
Trademarks
10 years
1,610
(1,120)
490
Developed Technology
7 years
4,420
(4,393)
27
Customer Relationships
10-12 years
9,330
(5,568)
3,762
Total
$
15,610 $
(11,180) $
4,430
Intangible assets at December 31, 2023 were comprised of the following (in thousands):
Definite-lived Intangible Assets
Amortization
Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Trade Name
25 years
$
250 $
(88) $
162
Trademarks
10 years
1,610
(959)
651
Non-competition Agreement
5 Years
1,810
(1,810)
—
Developed Technology
7 years
4,420
(3,762)
658
Customer Relationships
10-12 years
9,330
(4,784)
4,546
Total
$
17,420 $
(11,403) $
6,017
The Company incurred $1,587,000, $1,602,000 and $1,948,000 of amortization expense for the years ended December 31,
2024, 2023, and 2022, respectively.
As of December 31, 2024, future intangible amortization is as follows (in thousands):
Amortization
Expense
2025
$
952
2026
915
2027
915
2028
761
2029
754
2030 and thereafter
133
Total intangibles as of December 31, 2024
$
4,430
47
9. Debt
Long-term debt consists of the following at (in thousands):
December 31,
2024
December 31,
2023
Leaf Capital term loan payable
$
11 $
48
Huntington term loans payable
21,719
23,230
Total
21,730
23,278
Less: deferred loan costs
(210)
(291)
Less: current portion
(1,814)
(1,468)
Long-term debt
$
19,706 $
21,519
Huntington Credit Agreement
On July 22, 2022, the Company entered into a credit agreement (the “Huntington Credit Agreement”) with The Huntington
National Bank (“Huntington”), as the sole lender, administrative agent, lead arranger and book runner, and the lenders from
time to time thereto. Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the
Company secured loans (the “Huntington Loans”) in the maximum aggregate principal amount of $75,000,000, comprised
of three $25,000,000 commitments: a term loan, a CapEx loan, and a revolving loan.
At the option of the Company, the Huntington Loans shall be comprised of Alternative Base Rate (ABR) Loans or Secure
Overnight Financing Rate (SOFR) Loans.
ABR Loans bear interest at a per annum rate equal to ABR plus a margin of 280 to 330 basis points determined based on
the Company’s leverage ratio. ABR is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in
effect on such day plus 0.50% per annum and (c) Daily Simple SOFR for such day (taking into account any floor set forth
in the definition of “Daily Simple SOFR”) plus 1.00% per annum; provided, that if the ABR shall be less than 0.00%, then
ABR shall be deemed to be 0.00%.
SOFR Loans bear interest at a per annum rate equal to Daily Simple SOFR plus a margin of 180 to 230 basis points
determined based on the Company’s leverage ratio. Daily Simple SOFR means, for any day (a “SOFR Rate Day”), a rate
per annum equal to the greater of (a) SOFR for the day (such day, the “SOFR Determination Date”) that is five (5) U.S.
Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day,
such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S.
Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is
published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) 0.00%.
The Company’s obligations under the Huntington Credit Agreement are secured by all of the U.S. and Canadian assets of
the Company, including all of its equity interests in each of the Company’s U.S. and Canadian subsidiaries and 65% of the
Company’s equity interest in its Mexican subsidiaries, and are unconditionally guaranteed by certain subsidiaries of the
Company.
The Huntington Credit Agreement contains certain customary representations and warranties, conditions, affirmative and
negative covenants and events of default. The Company is in compliance with such covenants as of December 31, 2024.
Voluntary prepayments of amounts outstanding under the Huntington Loans are permitted at any time without premium or
penalty.
The Company incurred debt origination fees of $402,000 related to the Huntington Credit Agreement, which is being
amortized over the life of the Credit Agreement. The aggregate unamortized deferred financing fees as of December 31,
2024 totaled $210,000.
Huntington Capex Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured Capex loan
(the “Huntington Capex Loan”) in the maximum aggregate principal amount of $25,000,000 (none of which was advanced
to the Company on July 22, 2022 and through December 31, 2024). Proceeds of the Huntington Capex Loan can be used to
finance the ongoing capital expenditure needs of the Company.
48
Any borrowings from the Huntington Capex Loan will be converted to new term loans annually each February, beginning
February 2025, and will have monthly principal repayments based on a sixty-month amortization period with all amounts
outstanding on the Huntington Capex Loan being fully due on July 22, 2027.
Huntington Revolving Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan
commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on
July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of
December 31, 2024 and 2023. The interest rate for the Huntington Revolving Loan was 6.33% as of December 31, 2024.
The Huntington Credit Agreement makes available to the Company a revolving commitment in the maximum amount of
$25,000,000 at the Company’s option at any time during the five-year period following the closing. The revolving loan
commitment terminates, and all outstanding borrowings thereunder must be repaid on July 22, 2027.
Huntington Term Loan
Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a Term Loan
commitment (the “Huntington Term Loan”) of $25,000,000 ($25,000,000 of which was advanced to the Company on July
22, 2022). The Huntington Term Loan is to be repaid in monthly installments beginning August 2022 of $104,000 per
month for the first 24 months, $156,000 per month for the next 24 months, $208,000 for the next 12 months and the
remaining balance to be paid on July 22, 2027. The interest rate for the Huntington Term Loan was 6.11% as of
December 31, 2024.
Interest Rate Swap Agreement
The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July
2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term
Loan. Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for
the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $491,000 and $524,000 at
December 31, 2024 and 2023, respectively.
Leaf Capital Funding
On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment.
The parties agreed to a fixed interest rate of 5.50% and a term of 60 months.
Annual maturities of long-term debt are as follows (in thousands):
2025
$
1,886
2026
2,136
2027
17,708
Total long-term debt as of December 31, 2024
$
21,730
10. Stock Based Compensation
On May 13, 2021, the Company's stockholders approved the 2021 Long Term Equity Incentive Plan and, on May 16, 2024,
approved an amendment to the 2021 Long Term Equity Incentive Plan (as amended, the “2021 Plan”) that replaced the
2006 Long Term Equity Incentive Plan (the “2006 Plan”) approved in May 2006 and amended in May 2015. The 2021 Plan
allows for grants to employees, officers, non-employee directors, consultants, independent contractors and advisors of non-
qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and other
stock-based awards (“stock awards”) representing up to an aggregate of 1,094,823 shares of common stock. At
December 31, 2024, 346,848 shares of common stock were available to be granted. Awards can be granted under the 2021
Plan through the earlier of May 13, 2031, or the date the maximum number of available awards under the 2021 Plan have
been granted. No new awards may be granted from the 2006 Plan.
Awards under the 2021 Plan vest over one to three years and shares previously awarded and currently unvested under the
2006 Plan vest over three years. Shares granted under both the 2006 and 2021 Plans vest upon the date of a participant’s
death, disability or change in control.
The Company follows the provisions of FASB ASC 718 requiring that compensation cost relating to share-based payment
transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair
value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting
period of the equity award).
49
During 2024, 2023 and 2022, employees surrendered 72,658, 125,701 and 48,285 shares, respectively, of the Company's
common stock to satisfy income tax withholding obligations in connection with the vesting and exercising of stock awards.
Restricted Stock
The Company grants shares of its common stock to certain directors and employees in the form of unvested stock
(“Restricted Stock”). These awards are measured at the fair value of Core Molding Technologies’ common stock on the
date of issuance and recognized ratably as compensation expense over the applicable vesting period.
The following summarizes the status of Restricted Stock and changes during the years ended December 31:
2024
2023
2022
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Unvested - beginning of
year
373,583 $
13.33
502,747 $
10.46
459,420 $
9.79
Granted
94,704
19.18
179,580
15.98
287,485
10.39
Vested
(203,712)
13.16
(262,788)
9.85
(230,201)
7.87
Forfeited
(21,665)
13.45
(45,956)
12.46
(13,957)
11.28
Unvested - end of year
242,910 $
15.76
373,583 $
13.33
502,747 $
10.46
At December 31, 2024 and 2023, there was $2,199,000 and $3,008,000, respectively, of total unrecognized compensation
expense. That cost is expected to be recognized over the weighted-average period of 1.6 years. Total compensation expense
related to restricted stock grants for the years ended December 31, 2024, 2023 and 2022 was $2,333,000, $2,871,000, and
$2,284,000, respectively, and is recorded as selling, general and administrative expense.
Tax benefits in connection with payment of taxes upon the vesting of restricted stock previously issued to employees for
the year ended December 31, 2024, was $282,000. Tax deficiencies in connection with payment of taxes upon the vesting
of restricted stock previously issued to employees for the year ended December 31, 2023 was $536,000. Tax benefits in
connection with payment of taxes upon the vesting of restricted stock previously issued to employees for the year ended
December 31, 2022, was $79,000.
Performance Restricted Stock Awards
The Company grants shares of its common stock to certain officers and key managers in the form of shares of
performance-based restricted stock ("Performance Restricted Stock Awards"). These awards are measured at the fair value
of the Company's common stock on the date of issuance and recognized ratably as compensation expense over the
applicable vesting period to the extent that the performance measures have been satisfied as of the last day of the
performance period of the award. The total amount payable as of the award's vesting date is determined by the three-year
average Operational Income and Return on Capital Employed performance measure achievement as defined in the
applicable award agreement. The Company adjusts compensation expense for actual forfeitures as they occur and for
estimated performance measure achievement.
The following summarizes the status of Performance Restricted Stock Awards and changes during the years ended
December 31:
2024
2023
2022
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Unvested - beginning of
year
11,737 $
15.98
— $
—
— $
—
Granted
28,483
19.18
13,350
15.98
—
—
Vested
—
—
—
—
—
—
Forfeited
(1,790)
15.98
(1,613)
15.98
—
—
Unvested - end of year
38,430 $
18.35
11,737 $
15.98
— $
—
50
At December 31, 2024 and 2023, there was $456,000 and $135,000, respectively, of total unrecognized compensation
expense related to Performance Restricted Stock Awards. As of December 31, 2022, there was no unrecognized
compensation expense related to Performance Restricted Stock Awards. The unrecognized compensation expense at
December 31, 2024 is expected to be recognized over the weighted-average period of 2.0 years. Total compensation cost
related to Performance Restricted Stock Awards for the year ended December 31, 2024, 2023 and 2022 was $162,000,
$52,000 and $0, all of which was recorded to selling, general and administrative expense.
Stock Appreciation Rights
As part of the Company's 2019 annual grant, Stock Appreciation Rights (SARs) were granted with a grant price of $10.
These awards have a contractual term of five years and vest ratably over a period of three years or immediately vest if the
recipient is over 65 years of age. These awards are valued using the Black-Scholes option pricing model, and are amortized
ratably as compensation expense over a three-year period.
A summary of the Company's stock appreciation rights activity for the years ended December 31, is as follows:
2024
2023
2022
Number
of
Shares
Wtd. Avg.
Grant
Date
i
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Number
of
Shares
Wtd. Avg.
Grant Date
Fair Value
Outstanding - beginning of
year
— $
—
177,016 $
2.57 177,016 $
2.57
Granted
—
—
—
—
—
—
Exercised
—
—
(177,016)
2.57
—
—
Forfeited
—
—
—
—
—
—
Outstanding - end of year
— $
—
— $
— 177,016 $
2.57
Exercisable - end of year
— $
—
— $
— 177,016 $
2.57
The weighted average grant date fair value of exercised SARs was $2.57. At December 31, 2024, there was no
unrecognized compensation expense related to SARs.
The Company did not recognize any compensation cost related to SARs for the years ended December 31, 2024 and 2023.
Total compensation cost related to SARs for the year ended December 31 2022 was $45,000, all of which was recorded to
selling, general and administrative expense.
11. Long Term Incentive Compensation
The Company grants phantom stock ("Phantom Stock Awards") to key employees under the 2021 Plan. These Phantom
Stock Awards are measured based on the fair value of the Company's common stock on the vesting date and are marked to
market at each reporting period. Compensation expense is recognized over the applicable vesting period, typically three
years, and is adjusted for actual forfeitures as they occur.
At December 31, 2024, there was $332,000 of total unrecognized compensation expense related to Phantom Stock Awards.
The unrecognized compensation expense at December 31, 2024 is expected to be recognized over the weighted-average
period of 2.5 years. Total compensation cost related to Phantom Stock Awards for year ended December 31, 2024 was
$46,000, all of which was recorded to selling, general and administrative expense. A total of 21,270 shares of phantom
stock were granted in 2024. No Phantom Stock Awards were granted in 2023 or 2022.
12. Stock Repurchase Plan
On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing
the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. Repurchases of shares of common
stock under the stock repurchase program are made in the open market and in accordance with applicable securities laws.
The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it
may be suspended or terminated at any time at the Company’s discretion. There were 172,043 shares with an average stock
price of $17.09 repurchased under the repurchase program during the year ended December 31, 2024, totaling $2,939,000.
51
13. Income Taxes
Components of the provision for income taxes are as follows (in thousands):
2024
2023
2022
Current:
Federal
$
1,829 $
26 $
(18)
Foreign
1,805
2,835
5,896
State and local
75
88
(27)
3,709
2,949
5,851
Deferred:
Federal
812
2,844
(3,533)
Foreign
(406)
(451)
80
State and local
67
80
(16)
473
2,473
(3,469)
Provision for income taxes
$
4,182 $
5,422 $
2,382
A reconciliation of the income tax provision based on the federal statutory income tax rate to the Company's income tax
provision for the years ended December 31 is as follows (in thousands):
2024
2023
2022
Provision at United States federal statutory rate
$
3,671 $
5,407 $
3,063
U.S. federal valuation allowance
—
—
(2,363)
State and Local tax expense
126
(6)
(42)
Effect of foreign taxes
534
143
1,519
Foreign Direct Investment
(451)
(153)
—
Permanent Compensation Differences
429
(94)
228
Other
(127)
125
(23)
Provision for income taxes
$
4,182 $
5,422 $
2,382
At December 31, 2024, a provision has not been made for U.S. taxes on accumulated undistributed earnings of
approximately $34,148,000 and $20,553,000 of the Company's Canadian and Mexican subsidiaries, respectively, that
would become payable upon repatriation to the United States. At December 31, 2023, a provision has not been made for
U.S. taxes on accumulated undistributed earnings of approximately $32,622,000 and $19,153,000 of the Company's
Canadian and Mexican subsidiaries, respectively, that would become payable upon repatriation to the United States. It is
the intention of the Company to reinvest all such earnings in operations and facilities outside of the United States. It is not
practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.
The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is
more likely than not to realize deferred tax benefits through the generation of future taxable income. Management makes
assumptions, judgments, and estimates to determine our current and deferred tax provision and also the deferred tax assets
and liabilities. The Company evaluates provisions and deferred tax assets quarterly to determine if adjustments to our
valuation allowance are required based on the consideration of all available evidence.
As of December 31, 2024 the Company had a net deferred tax asset of $1,454,000 and $183,000 related to tax positions in
Mexico and Canada and deferred tax liabilities of $1,219,000 related to tax positions in the United States. Deferred tax
assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are
included in "Other non-current liabilities" on the Consolidated Balance Sheets. As of December 31, 2024, the Company
had a valuation allowance of $1,265,000 against the deferred tax asset related to local (city) jurisdiction tax positions, due
to cumulative losses over the last three years in the local jurisdiction and uncertainty related to the Company’s ability to
realize the deferred assets. The Company believes that the net deferred tax assets associated with the Mexican and Canada
tax jurisdictions are more-likely-than-not to be realizable based on estimates of future taxable income.
52
As of December 31, 2023 the Company had a net deferred tax asset of $1,595,000 related to tax positions in Mexico and
deferred tax liabilities of $1,182,000 and $43,000 related to tax positions in the United States and Canada. Deferred tax
assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are
included in "Other non-current liabilities" on the Consolidated Balance Sheets. As of December 31, 2023, the Company
had a valuation allowance of $1,530,000 against the deferred tax asset related to local tax positions, due to cumulative
losses in the local jurisdiction over the last three years and uncertainty related to the Company’s ability to realize the
deferred assets. The Company believes that the deferred tax assets associated with the Mexican tax jurisdictions are more-
likely-than-not to be realizable based on estimates of future taxable income.
Deferred tax assets consist of the following at December 31:
2024
2023
U.S. federal net operating loss carryforwards
$
— $
442
U.S. local operating loss carryforwards
1,273
1,553
Interest limitation carryforwards
—
1,162
Accrued liabilities
586
595
Accounts receivable
53
32
Inventory
220
211
Property, plant, and equipment
(5,303)
(6,065)
Post retirement benefits
1,034
1,024
Goodwill and finite-lived assets, net
2,112
2,151
Other, net
1,708
795
Total deferred tax asset
1,683
1,900
Valuation allowance for deferred tax assets
(1,265)
(1,530)
Total deferred tax asset, net
$
418 $
370
At December 31, 2024 the Company had no net operating loss carryforwards in United States, Canada or Mexico federal
tax jurisdictions. At December 31, 2023, the Company's net operating loss carryforwards and interest limitation
carryforwards in the United States federal tax jurisdiction were $2,100,000 and $4,945,000, respectively. At December 31,
2023, the Company had no net operating loss carryforwards in Canada or Mexico federal tax jurisdictions.
At December 31, 2024 and 2023 the Company had no liability for unrecognized tax benefits under guidance relating to tax
uncertainties. The Company does not anticipate that the unrecognized tax benefits will significantly change within the next
twelve months.
The Company files income tax returns in the United States, Mexico, Canada and various state and local jurisdictions. The
Company is not subject to United States federal income tax examinations for years before 2021. The Company is not
subject to state examinations for years before 2021. The Company is not subject to Mexican income tax examinations by
for the years before 2019 and is not subject to Canadian income tax examinations for the years before 2020.
14. Post Retirement Benefits
The Company provides post retirement benefits to certain of its United States and Canadian employees, including
contributions to a multi-employer defined benefit pension plan, health care and life insurance benefits, and contributions to
several defined retirement contribution plans.
The Company contributes to a multi-employer defined benefit pension plan for its employees represented by the
International Association of Machinists and Aerospace Workers ("IAM") at the Company’s Columbus, Ohio production
facility. The Company does not administer this plan and contributions are determined in accordance with provisions of the
collective bargaining agreement. The risks of participating in this multi-employer plan are different from a single-employer
plan in the following aspects:
•
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of
other participating employers.
53
•
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by
the remaining participating employers.
•
If the Company chooses to stop participating in its multi-employer plan, the Company may be required to pay the
plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
The Company’s participation in the multi-employer defined benefit pension plan for the years ended December 31, 2024
and 2023 is outlined in the table below. The most recent Pension Protection Act ("PPA") zone status is for the plan’s year-
end at December 31, 2023. The zone status is based on information the Company received from the plan and is certified by
the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone
are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented”
column indicates whether a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or has been
implemented.
Pension Fund
EIN/Pension
Plan Number
Pension Protection Act Zone
Status
FIP/RP
Status
Pending/
Implemented
Contributions of the Company
Surcharge
Imposed
Expiration
Date of
Collective
Bargaining
Agreement
2024
2023
2024
2023
IAM National
Pension Fund /
National Pension
Plan (A)
51-6031295 -
002
Red Zone as of
12/31/23
Red Zone as of
12/31/22
Implemented
$
890,000
$
1,002,000
Yes
8/7/2025
Total Contributions: $
890,000 $
1,002,000
(A)The plan re-certified its zone status after using the amortization provisions of the Code. The Company's contributions to
the plan did not represent more than 5% of total contributions to the plan as indicated in the plan's most recently available
annual report for the plan year ended December 31, 2023. Under the terms of the collective-bargaining agreement, the
Company is required to make contributions to the plan for each hour worked up to a maximum of 40 hours per person, per
week at $1.55 per hour from August 10, 2019 through August 9, 2025. The Company is paying a surcharge of $0.16 for
each hour worked up to a maximum of 40 hours per person, per week as a result of the pension plan being in the Red
Zone.
Prior to the acquisition of Columbus Plastics in 1996, certain of the Company's employees were participants, or were
eligible to participate, in International's post-retirement health and life insurance benefit plan. This plan provides healthcare
and life insurance benefits for certain employees upon their retirement, along with their spouses and certain dependents and
requires cost sharing between the Company, International and the participants, in the form of premiums, co-payments, and
deductibles. The Company and International share the cost of benefits for these employees, using a formula that allocates
the cost based upon the respective portion of time that the employee was an active service participant after the acquisition
of Columbus Plastics to the period of active service prior to the acquisition of Columbus Plastics.
The Company also sponsors a post-retirement health and life insurance benefit plan for certain union retirees of its
Columbus, Ohio production facility. In August 2010, as part of a new collective-bargaining agreement, the post-retirement
health and life insurance benefits for all current and future represented employees who were not retired were eliminated in
exchange for a one-time cash payment. Individuals who retired prior to August 2010 remain eligible for post-retirement
health and life insurance benefits.
The elimination of post-retirement health and life insurance benefits described above resulted in a reduction of the
Company’s post-retirement benefits liability of approximately $10,282,000 in 2010. This reduction in post retirement
benefits liability was treated as a negative plan amendment and is being amortized as a reduction to net periodic benefit
cost over approximately twenty years, the actuarial life expectancy of the remaining participants in the plan at the time of
the amendment. This negative plan amendment resulted in net periodic benefit cost reductions of approximately $496,000
in 2024, 2023 and 2022, and will result in net periodic benefit cost reductions of approximately $496,000 in 2025 and each
year thereafter during the amortization period.
54
The funded status of the Company's post-retirement health and life insurance benefits plan as of December 31, 2024 and
2023 and reconciliation with the amounts recognized in the Consolidated Balance Sheets are provided below (in
thousands):
Post-Retirement Benefits
2024
2023
Change in benefit obligation:
Benefit obligation at January 1
$
3,116 $
6,625
Interest cost
93
254
Unrecognized loss (gain)
550
(3,004)
Benefits paid, net
(461)
(759)
Benefit obligation at December 31
$
3,298 $
3,116
Plan Assets
—
—
Amounts recorded in accumulated other comprehensive income:
Prior service credit
$
(3,130) $
(3,648)
Net loss (gain)
(1,358)
(2,056)
Total
$
(4,488) $
(5,704)
Weighted-average assumptions as of December 31:
Discount rate used to determine benefit obligation and net periodic benefit cost
5.4 %
4.7 %
The components of expense for all of the Company's post-retirement benefit plans for the years ended December 31 (in
thousands):
2024
2023
2022
Pension expense:
Multi-employer plan
$
794 $
981 $
1,137
Defined contribution plans
1,792
1,873
1,482
Total pension expense
2,586
2,854
2,619
Health and life insurance:
Interest cost
93
254
198
Amortization of prior service credits
(496)
(496)
(496)
Amortization of net loss (gain)
(190)
22
174
Net periodic benefit credit
(593)
(220)
(124)
Total post retirement benefits expense
$
1,993 $
2,634 $
2,495
The Company accounts for post-retirement benefits under FASB ASC 715, which requires the recognition of the funded
status of a defined benefit pension or post-retirement plan in the Consolidated Balance Sheets. For the year ended
December 31, 2024, the Company recognized a net actuarial loss of $550,000 which is comprised of an actuarial loss of
$240,000 and differences between actual and expected benefit payments of $310,000. The actuarial loss primarily resulted
from changes in per capita costs and medical trend assumptions offset by changes in census and the discount rate. For the
year ended December 31, 2023, the Company recognized a net actuarial gain of $3,004,000, which is comprised of an
actuarial gain of $3,393,000, offset by differences between actual and expected benefit payments of $389,000. The
actuarial gain primarily resulted from a change from a self-insured to a fully-insured plan. The net actuarial activity for the
years ended December 31, 2024 and 2023, were recorded in accumulated other comprehensive income.
Amounts not yet recognized as a component of net periodic benefit costs at December 31, 2024 and 2023 were a net credit
of $4,488,000 and $5,835,000, respectively. The amount in accumulated other comprehensive income expected to be
recognized as components of net periodic post retirement cost during 2025 consists of a prior service credit of $496,000
and a net gain of $88,000. In addition, 2025 net interest expense related to post-retirement healthcare is expected to be
55
$117,000, for a total post-retirement healthcare net gain of approximately $467,000 in 2025. The Company expects benefits
paid in 2025 to be consistent with estimated future benefit payments as shown in the table below.
The weighted average rate of increase in the per capita cost of covered health care benefits as of December 31, 2024 and
2023 is projected to be 18.8% and 7.1%, respectively. The rate is projected to decrease gradually for medical and
prescriptions post age 65 to 4.81% by the year 2029 and remain at that level thereafter. As of December 31, 2023, the
comparable assumptions for prior year were medical post age 65 of 6.60% and prescriptions of 5.0% by the year 2029.
The estimated future benefit payments of the health care plan for the next ten years are as follows (in thousands):
Postretirement
Health Care
Benefits Plan
2025
$
146
2026
164
2027
180
2028
189
2029
192
2030 - 2034
1,997
15. Commitments and Contingencies
From time to time, the Company is involved in litigation incidental to the conduct of its business. However, the Company
is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse
effect on the Company's consolidated financial position or results of operations.
16. Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in a transaction
between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related
valuation methodologies as defined in the authoritative literature. This hierarchical valuation methodology provides a fair
value framework that describes the categorization of assets and liabilities in three levels based upon the assumptions
(inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3
generally requires significant management judgment.
The three levels are defined as follows:
Level 1 - Quoted prices in active markets for identical assets and liabilities.
Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments
in markets that are not active and model-derived valuations, in which all significant inputs are observable
in active markets.
Level 3 - Significant unobservable inputs reflecting management's own assumptions about the inputs used in
pricing the asset or liability.
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt,
interest rate swaps and foreign currency derivatives. Cash and cash equivalents, accounts receivable and accounts payable
carrying values as of December 31, 2024 and December 31, 2023 approximate fair value due to the short-term maturities of
these financial instruments. As of December 31, 2024, the carrying amounts of the Huntington Term Loan and Huntington
Revolving Loan approximated fair value due to the short-term nature of the underlying variable rate SOFR agreements.
The Company had Level 2 fair value measurements at December 31, 2024 relating to the Company’s interest rate swaps
and foreign currency derivatives.
56
Derivative and hedging activities
Foreign currency derivatives
The Company conducts business in foreign countries and pays certain expenses in foreign currencies; therefore, the
Company is exposed to foreign currency exchange risk between the U.S. Dollar and foreign currencies, which could impact
the Company’s operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company
entered into forward contracts to exchange a fixed amount of U.S. Dollars for a fixed amount of foreign currency, which
will be used to fund future foreign currency cash flows. At inception, all forward contracts are formally documented as
cash flow hedges and are measured at fair value each reporting period.
Derivatives are formally assessed both at inception and at least quarterly thereafter, to ensure that derivatives used in
hedging transactions are highly effective in offsetting changes in cash flows of the hedged item. If it is determined that a
derivative ceases to be a highly effective hedge, or if the anticipated transaction is no longer probable of occurring, hedge
accounting is discontinued, and any future mark-to-market adjustments are recognized in earnings. The effective portion of
gain or loss is reported in other comprehensive income and the ineffective portion is reported in earnings. The impacts of
these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on
transactions denominated in the foreign currency. As of December 31, 2024 and 2023 the Company had no ineffective
portion related to the cash flow hedges. The notional contract value of foreign currency derivatives was $29,668,000 and
$9,195,000 as of December 31, 2024 and 2023, respectively.
Interest Rate Swaps
The Company entered into an interest rate swap contract to fix the interest rate on an initial aggregate amount of
$25,000,000 thereby reducing exposure to interest rate changes. The interest rate swap pays a fixed rate of 2.95% to the
swap counterparty in exchange for daily SOFR. At inception, all interest rate swaps were formally documented as cash
flow hedges and are measured at fair value each reporting period. See Note 9, "Debt", for additional information. The
notional contract value of the interest rate swap was $21,719,000 and $23,229,000 as of December 31, 2024 and 2023,
respectively.
Financial statements impacts
The following tables detail amounts related to our derivatives designated as hedging instruments (in thousands):
Fair Value of Derivative Instruments
December 31, 2024
Asset Derivatives
Liability Derivatives
Balance Sheet Location
Fair Value
Balance Sheet Location Fair Value
Foreign exchange
contracts
Prepaid expenses other current assets $
— Accrued other liabilities
$
2,080
Other non-current assets
$
— Other non-current liabilities $
—
Interest rate swaps
Prepaid expenses other current assets $
351 Accrued other liabilities
$
—
Other non-current assets
$
140 Other non-current liabilities $
—
57
Fair Value of Derivative Instruments
December 31, 2023
Asset Derivatives
Liability Derivatives
Balance Sheet Location
Fair Value
Balance Sheet Location Fair Value
Foreign exchange
contracts
Prepaid expenses other current assets $
620 Accrued other liabilities
$
—
Other non-current assets
$
— Other non-current liabilities $
—
Interest rate swaps
Prepaid expenses other current assets $
419 Accrued other liabilities
$
—
Other non-current assets
$
105 Other non-current liabilities $
—
As of December 31, 2024, the Company had foreign exchange contracts related to the Mexican Peso with an exchange
rates ranging from 17.32 to 20.90 and the Canadian Dollar with exchange rates ranging from 1.36 to 1.42.
The following tables summarize the amount of unrealized / realized gain and loss recognized in Accumulated
Comprehensive Income (AOCI) for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Derivatives in
subtopic 815-20
Cash Flow
Hedging
Relationship
Amount of Unrealized Gain or
(Loss) Recognized in Accumulated
Other Comprehensive Income on
Derivative
Location of Gain or
(Loss) Reclassified
from Accumulated
Other Comprehensive
Income(A)
Amount of Realized Gain or (Loss)
Reclassified from Accumulated
Other Comprehensive Income
2024
2023
2022
2024
2023
2022
Foreign exchange contracts
$
(3,517) $
2,931 $
(82) Cost of goods sold
$
(703) $
2,225 $
3
Selling, general and
administrative expense $
(114) $
— $
—
Interest rate swaps
$
475 $
243 $
770 Interest Expense
$
508 $
483 $
5
(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income is allocated to
cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.
58
17. Accumulated Other Comprehensive Income
The following table presents changes in Accumulated Other Comprehensive Income by component, net of tax, for the years
ended December 31, 2024 and 2023 (in thousands):
Hedging
Derivative
Activities
Post
Retirement
Benefit Plan
Items(A)
Total
2023:
Balance at January 1, 2022
$
546 $
2,507 $
3,053
Other comprehensive income before reclassifications
3,174
3,004
6,178
Amounts reclassified from accumulated other comprehensive income
(2,708)
(474)
(3,182)
Income tax (expense) benefit
(111)
(637)
(748)
Balance at December 31, 2023
$
901 $
4,400 $
5,301
2024:
Balance at January 1, 2023
$
901 $
4,400 $
5,301
Other comprehensive income before reclassifications
(3,042)
(550)
(3,592)
Amounts reclassified from accumulated other comprehensive income
309
(686)
(377)
Income tax (expense) benefit
578
382
960
Balance at December 31, 2024
$
(1,254) $
3,546 $
2,292
(A) The effect of post-retirement benefit items reclassified from Accumulated Other Comprehensive Income is included in
other income and expense on the Consolidated Statements of Operations. These Accumulated Other Comprehensive
Income components are included in the computation of net periodic benefit cost (see Note 14 - Post Retirement
Benefits and Note 16 - Fair Value of Financial Instruments for additional details). The tax effect of post retirement
benefit items reclassified from Accumulated Other Comprehensive Income is included in income tax expense on the
Consolidated Statements of Operations.
59
18. Segment Reporting
Segment information is prepared on the same basis that our Chief Executive Officer ("CEO"), who serves as our Chief
Operating Decision Maker ("CODM"), manages our business, evaluates financial results, and makes key operating
decisions. We have one reportable operating segment: North America.
The North America reportable operating segment comprises all manufacturing operations located in the United States,
Canada, and Mexico, which we have aggregated into a single operating segment in consideration of the aggregation criteria
set forth in ASC 280. These operations share similar economic characteristics, production processes, and customer bases.
The North America reportable segment generates its revenue primarily from the manufacturing and sale of sheet molding
compound and molded structural plastic products to customers in the heavy truck, automotive, power sports, and industrial
markets. The accounting policies of the North America reportable segment are consistent with those described in Note 2,
"Summary of Significant Accounting Policies."
Our CODM uses income from operations to evaluate performance and make key operating decisions, such as allocating
resources and assessing growth opportunities within the North America segment. The CODM is not provided asset
information by reportable segment, as asset information is reviewed on a consolidated basis.
The following tables present selected financial information with respect to our single reporting segment:
2024
2023
2022
North America Segment:
Product sales
$
291,092 $
347,375 $
358,701
Tooling sales
11,286
10,363
18,675
North America Segment Total Revenue
302,378
357,738
377,376
Less:
Variable Cost of Goods Sold
219,221
263,526
297,783
Fixed Cost of Goods Sold
29,897
29,692
27,191
Selling, Goods and Administration
36,565
37,983
34,399
North America Segment Operating Income
16,695
26,537
18,003
Less:
Loss due to extinguishment of debt
—
—
1,582
Net periodic post retirement benefit
(593)
(220)
(124)
Net interest (income) expense
(193)
1,011
1,960
Income taxes
4,182
5,422
2,382
North America Net Income
$
13,299 $
20,324 $
12,203
60
19. Quarterly Results of Operations (Unaudited)
The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2024, 2023
and 2022 (in thousands).
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total Year
2024:
Product sales
$
75,831 $
83,956 $
71,258 $
60,047 $
291,092
Tooling sales
2,314
4,787
1,734
2,451
11,286
Net sales
78,145
88,743
72,992
62,498
302,378
Gross margin
13,305
17,725
12,345
9,885
53,260
Operating income
4,732
7,489
3,605
869
16,695
Net income (loss)
3,759
6,419
3,160
(39)
13,299
Net income (loss) per share of common
stock
Basic (1)
$
0.43 $
0.74 $
0.36 $
0.00 $
1.53
Diluted (1)
$
0.43 $
0.73 $
0.36 $
0.00 $
1.51
2023:
Product sales
$
98,337 $
95,703 $
80,896 $
72,439 $
347,375
Tooling sales
1,170
2,022
5,832
1,339
10,363
Net sales
99,507
97,725
86,728
73,778
357,738
Gross margin
17,743
20,562
15,278
10,937
64,520
Operating income
8,075
10,070
5,875
2,517
26,537
Net income
5,852
7,936
4,354
2,182
20,324
Net income per share of common stock
Basic (1)
$
0.69 $
0.93 $
0.50 $
0.25 $
2.37
Diluted (1)
$
0.69 $
0.91 $
0.49 $
0.25 $
2.31
2022:
Product sales
$
89,901 $
93,317 $
92,340 $
83,143 $
358,701
Tooling sales
691
5,418
9,266
3,300
18,675
Net sales
90,592
98,735
101,606
86,443
377,376
Gross margin
14,507
13,045
13,303
11,547
52,402
Operating income
6,012
4,385
4,632
2,974
18,003
Net income
3,864
2,188
1,319
4,832
12,203
Net income per share of common stock
Basic (1)
$
0.46 $
0.26 $
0.16 $
0.57 $
1.44
Diluted (1)
$
0.46 $
0.26 $
0.16 $
0.57 $
1.44
(1) Sum of the quarters may not sum to total year due to rounding.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
61
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company has carried out an evaluation, under the supervision and
with the participation of its management, including its Chief Executive Officer and its Chief Financial Officer, of the
effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a -15(e) of the
Exchange Act). Based upon this evaluation, the Company’s management, including its Chief Executive Officer and its
Chief Financial Officer, concluded that the Company’s disclosure of controls and procedures were (i) effective to ensure
that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act were
accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosures, and (ii) effective to ensure that information
required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s
Chief Executive Officer and Chief Financial Officer and effected by the Company’s board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the
Company’s financial statements in accordance with accounting principles generally accepted in the United States of
America. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute
assurance that a misstatement of the Company’s financial statements would be prevented or detected.
The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted
an evaluation of the effectiveness of the Company’s internal controls over financial reporting based on the criteria
established in the 2013 Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). This evaluation included a review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.
Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective
as of December 31, 2024.
The Company's independent registered public accounting firm, Crowe LLP, audited our internal control over financial
reporting as of December 31, 2024, as stated in their report in the section entitled "Report of Independent Registered Public
Accounting Firm" included elsewhere in this Form 10-K, which expressed an unqualified opinion on the effectiveness of
the Company's internal control over financial reporting as of December 31, 2024.
Changes in Internal Controls
There were no changes in internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)
and Rule 15d-15(f)) that occurred in the last fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION
During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule
10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of
Regulation S-K
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
62
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this Part III, Item 10 is incorporated by reference to the Company’s definitive proxy statement
for its annual meeting of stockholders to be held on or about May 15, 2025, which is expected to be filed with the SEC
pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered
by this report.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Part III, Item 11 is incorporated by reference to the Company’s definitive proxy statement
for its annual meeting of stockholders to be held on or about May 15, 2025, which is expected to be filed with the SEC
pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered
by this report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
The following table shows certain information concerning our common stock to be issued in connection with our equity
compensation plans as of December 31, 2024:
Plan Category
Number of Shares
to be Issued Upon
Exercise of
Outstanding
Options or
Vesting (1)
Weighted
Average
Exercise Price
of Outstanding
Options (2)
Number of
Shares
Remaining
Available for
Future Issuance
Equity compensation plans approved by stockholders
281,340 $
15.77
346,848
(1) This amount includes outstanding awards under the Company's 2021 Long Term Equity Incentive Plan (the
"2021 Plan"). Includes 242,910 shares issuable pursuant to restricted stock awards.
(2) Weighted average exercise price shown in this table above does not take into account restricted stock awards.
Other information required by this Part III, Item 12 is incorporated by reference to the Company’s definitive proxy
statement for its annual meeting of stockholders to be held on or about May 15, 2025, which is expected to be filed with
the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year
covered by this report.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Part III, Item 13 is incorporated by reference to the Company’s definitive proxy statement
for its annual meeting of stockholders to be held on or about May 15, 2025, which is expected to be filed with the SEC
pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered
by this report.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Part III, Item 14 is incorporated by reference to the Company’s definitive proxy statement
for its annual meeting of stockholders to be held on or about May 15, 2025, which is expected to be filed with the SEC
pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered
by this report.
63
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as Part of this Report:
(1) Financial Statements
See Part II, Item 8 hereof.
(2) Financial Statement Schedules and Independent Auditor's Report
The following consolidated financial statement schedules are filed with this Annual Report on Form 10-K:
Schedule II — Valuation and Qualifying Accounts and Reserves for the Years Ended December 31, 2024, 2023,
and 2022
All other schedules are omitted because of the absence of the conditions under which they are required.
(3) Exhibits
See Index to Exhibits filed with this Annual Report on Form 10-K.
ITEM 16. FORM 10-K SUMMARY
Not Applicable.
64
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CORE MOLDING TECHNOLOGIES, INC.
By /s/ David L. Duvall
David L. Duvall
President and Chief Executive Officer
March 11, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has signed below by the following persons
been on behalf of the registrant and in the capacities and on the dates indicated:
/s/ David L. Duvall
David L. Duvall
President, Chief Executive Officer, and
Director (Principal Executive Officer)
March 11, 2025
/s/ John P. Zimmer
John P. Zimmer
Vice President, Secretary, Treasurer,
and Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
March 11, 2025
*
Sandra L. Kowaleski
Director
March 11, 2025
*
Thomas R. Cellitti
Director
March 11, 2025
*
Ralph O. Hellmold
Director
March 11, 2025
*
Matthew Jauchius
Director
March 11, 2025
*
Salvador Minarro-Villalobos
Director
March 11, 2025
*
Andrew O. Smith
Director
March 11, 2025
*By /s/ John P. Zimmer
John P. Zimmer
Attorney-In-Fact
March 11, 2025
65
Core Molding Technologies, Inc. and Subsidiaries
Schedule II
Consolidated valuation and qualifying accounts and reserves for the years ended December 31, 2024, 2023 and 2022.
Reserves deducted from asset to which it applies:
Allowance for Doubtful Accounts
Additions
Balance at
Beginning of
Year
(Recovered)/
Charged to
Costs &
Expenses
Charged to
Other
Accounts
Deductions(A)
Balance at
End
of Year
Year Ended December 31, 2024
$
— $
— $
— $
— $
—
Year Ended December 31, 2023
$
— $
— $
— $
— $
—
Year Ended December 31, 2022
$
90,000 $
(90,000) $
— $
— $
—
Customer Chargeback Allowance
Additions
Balance at
Beginning of
Year
(Recovered)/
Charged to
Costs &
Expenses
Charged to
Other
Accounts
Deductions(B)
Balance at
End
of Year
Year Ended December 31, 2024
$
138,000 $
327,000 $
— $
238,000 $
227,000
Year Ended December 31, 2023
$
502,000 $
534,000 $
— $
898,000 $
138,000
Year Ended December 31, 2022
$
222,000 $
736,000 $
— $
456,000 $
502,000
(A) Amount represents uncollectible accounts written off.
(B) Amount represents customer returns and deductions, discounts and price adjustments accepted.
66
INDEX TO EXHIBITS
Exhibit No.
Description
Location
3(a)
Amended and Restated Certificate of Incorporation
of Core Molding Technologies, Inc. as filed with
the Secretary of State of Delaware on May 29, 2024
Incorporated by reference to Exhibit 1.1 to
Registration Statement on Form S-8 (Registration
No. 333-281428) filed August 9, 2024
3(b)(1)
Amended and Restated By-Laws of Core Molding
Technologies, Inc.
Incorporated by reference to Exhibit 3.1 to Current
Report on Form 8-K filed January 4, 2008
3(b)(2)
Amendment No. 1 to the Amended and Restated
By- Laws of Core Molding Technologies, Inc.
Incorporated by reference to Exhibit 3.1 to Current
Report on Form 8-K filed December 17, 2013
4
Description of Securities
Filed Herein
10(a)
Supply Agreement, dated August 4, 2014 between
Core Molding Technologies, Inc. and Core
Composites Corporation and International Motors,
LLC.2
Incorporated by reference to Exhibit 10(a) to
Quarterly Report on Form 10-Q for the quarter
ended September 30, 2014
10(b)
Credit Agreement, dated October 27, 2020,
between Core Molding Technologies, Inc. and
Wells Fargo Bank, National Association, as
administrative agent, lead arranger and book
runner, and the lenders party thereto.
Incorporated by reference to Exhibit 10.1 to Form
8-K filed on November 2, 2020
10(b)(1)
Master Security Agreement, dated as of October 20,
2020, among FGI Equipment Finance LLC, Core
Molding Technologies, Inc. as debtor, and each of
Core Composites Corporation and CC HPM, S. de
R.L. de C.V., as guarantors
Incorporated by reference to Exhibit 10.2 to Form
8-K filed on November 2, 2020
10(b)(2)
Promissory Note, dated October 20, 2020, between
Core Molding Technologies, Inc. and FGI
Equipment Finance LLC.
Incorporated by reference to Exhibit 10.3 to Form
8-K filed on November 2, 2020
10(c)
Core Molding Technologies, Inc. Employee Stock
Purchase Plan1
Incorporated by reference to Exhibit 4(c) to
Registration Statement on Form S-8 (Registration
No. 333-60909).
10(c)(1)
2002 Core Molding Technologies, Inc. Employee
Stock Purchase Plan (as amended May 17, 2006)1
Incorporated by reference to Exhibit 10.3 to
Current Report on Form 8-K filed on May 23, 2006
10(d)
2006 Core Molding Technologies, Inc. Long Term
Equity Incentive Plan as amended and restated
effective May 12, 20171
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on May 15, 2017
10(e)
Core Molding Technologies, Inc. Executive Cash
Incentive Plan1
Incorporated by reference to Exhibit A to Definitive
Proxy Statement on Schedule 14A dated April 8,
2016
10(f)
Core Molding Technologies, Inc. Salaried
Employee Bonus Plan2
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on December 9,
2020
10(g)
Form of Restricted Stock Agreement between Core
Molding Technologies, Inc. and certain executive
officers1
Incorporated by reference to Exhibit 10.2 to
Current Report on Form 8-K filed on May 15, 2012
67
Exhibit No.
Description
Location
10(h)
Form of Award for Stock Appreciation Rights
between Core Molding Technologies, Inc. and
certain executive officers1
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on May 20, 2019
10(i)
Form of Restricted Stock Agreement between Core
Molding Technologies, Inc. and certain executive
officers, dated August 6, 20211
Incorporated by reference to Exhibit 10(m) to
Quarterly Report on Form 10-Q for the quarter
ended June 30, 2021
10(j)
Form of Executive Employment Agreement
between David L. Duvall and Core Molding
Technologies, Inc, dated August 6, 20211
Incorporated by reference to Exhibit 10(n) to
Quarterly Report on Form 10-Q for the quarter
ended June 30, 2021
10(k)
Form of Executive Employment Agreement
between Core Molding Technologies, Inc. and
certain executive officers, dated August 6, 20211
Incorporated by reference to Exhibit 10(q) to
Quarterly Report on Form 10-Q filed on August
6th, 2021
10(l)
Credit Agreement, dated July 22, 2022 between
Core Molding Technologies, Inc. and The
Huntington National Bank, as administrative agent,
sole lead arranger and sole bookrunner, and the
lenders from time to time thereto
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on July 28, 2022
10(m)
Core Molding Technologies, Inc. 2021 Long-Term
Equity Incentive Plan1
Incorporated by reference to Appendix A to the
Definitive Proxy Statement on Schedule 14A dated
April 7, 2021
10(m)
Form Performance Restricted Stock Award
Agreement1
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on March 14,
2023
10(o)
Core Molding Technologies, Inc. Employee Stock
Purchase Plan (as amended and restated effective as
of May 11, 2023)1
Incorporated by reference to Appendix A to the
Definitive Proxy Statement on Schedule 14A dated
April 7, 2023
10(p)
First Amendment to Credit Agreement
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on March 11,
2024
10(q)
Form Performance Restricted Stock Award
Agreement between Core Molding Technologies,
Inc. and certain executive officers1
Incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed on April 10,
2024
10(r)
Form Restricted Stock Agreement between Core
Molding Technologies, Inc. and certain executive
officers1
Incorporated by reference to Exhibit 10.2 to
Current Report on Form 8-K filed on April 10,
2024
11
Computation of Net Income per Share
Exhibit 11 omitted because the required
information is Included in Notes to Financial
Statements in Part II, Item 8 of this Annual Report
on Form 10-K
19
Core Molding Technologies, Inc. Insider Trading
Policy
Filed Herein
21
List of Subsidiaries
Filed Herein
23
Consent of Crowe LLP
Filed Herein
24
Powers of Attorney
Filed Herein
68
Exhibit No.
Description
Location
31(a)
Section 302 Certification by David L. Duvall,
President, Chief Executive Officer, and Director
Filed Herein
31(b)
Section 302 Certification by John P. Zimmer, Vice
President, Secretary, Treasurer, and Chief Financial
Officer
Filed Herein
32(a)
Certification of David L. Duvall, Chief Executive
Officer of Core Molding Technologies, Inc., dated
March 11, 2025, pursuant to 18 U.S.C. Section
1350
Filed Herein
32(b)
Certification of John P. Zimmer, Chief Financial
Officer of Core Molding Technologies, Inc., dated
March 11, 2025, pursuant to 18 U.S.C. Section
1350
Filed Herein
97
Core Molding Technologies, Inc. Clawback Policy1 Filed Herein
101.INS
XBRL Instance Document
Filed Herein
101.SCH
XBRL Taxonomy Extension Schema Document
Filed Herein
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Filed Herein
101.LAB
XBRL Taxonomy Extension Label Linkbase
Filed Herein
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Filed Herein
101.DEF
XBRL Taxonomy Extension Definition Linkbase
Filed Herein
104
Cover Page Interactive Data File (formatted in
Inline XBRL and contained in Exhibit 101)
Filed Herein
1. Indicates management contracts or compensatory plans that are required to be filed as an exhibit to this Annual Report
on Form 10-K.
2. Certain portions of this Exhibit have been omitted intentionally subject to a confidentiality treatment request. A
complete version of the Exhibit has been filed separately with the Securities and Exchange Commission.
INVESTOR INFORMATION
Share Trading
Shares of Core Molding Technologies common stock are traded on the NYSE American LLC
under the symbol “CMT.”
Notice of Annual Meeting
The Company’s 2025 annual meeting will be held on May 15, 2025. The meeting will be held
at the Company’s Columbus, Ohio facility, 800 Manor Park Drive Columbus, Ohio 43228 and
will convene at 9:00 a.m.
Investor Relations
Investor inquiries, including requests to obtain copies without charge of the Company’s
annual report as filed with the Securities & Exchange Commission, should be directed to:
Core Molding Technologies, Inc.
Investor Relations
800 Manor Park Drive
Columbus, OH 43228
Website: www.coremt.com
Stockholder Inquiries
Questions such as changes of address, name changes or lost certificates should be directed
to the Company’s stock transfer agent:
Equiniti Trust Company, LLC
48 Wall Street, 23 Floor
New York, NY 10043
(800)-468-9716
Equiniti.com
CORPORATE OFFICERS
David L. Duvall
President and Chief Executive Officer
Alex W. Bantz
Chief Commercial Officer
Eric L. Palomaki
Chief Operating Officer
Stephanie L. Pulliam
Executive Vice President of Human Resources
John P. Zimmer
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
BOARD OF DIRECTORS
Thomas R. Cellitti, Chairman
David L. Duvall
Ralph O. Hellmold
Matthew E. Jauchius
Sandra L. Kowaleski
Salvador Miñarro
Andrew O. Smith
800 Manor Park Drive
Columbus, OH 43228
www.coremt.com