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Strong Demand Results in First Quarter Sales of $90.6 million and Adjusted EBITDA Margin of 10.5%
COLUMBUS, Ohio , May 10, 2022 /PRNewswire/ -- Core Molding Technologies, Inc. (NYSE American: CMT) ("Core Molding", "Core" or the "Company"), a leading engineered materials company specializing in molded structural products, principally in building products, industrial and utilities, medium and heavy-duty truck and powersports industries across the United States , Canada and Mexico today reports financial and operating results for the fiscal quarter ended March 31, 2022 .
1 Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled below.
David Duvall , the Company's President and Chief Executive Officer, said, "We are excited about first quarter results as sales momentum from 2021 has carried into 2022. Customer demand remains strong and net new wins for the quarter were $10 million , which continues to incrementally add to our future revenue growth.
"Given our updated sales forecasts and evaluation of capacity and footprint at our facilities, we have increased our 2022 capital expenditures by approximately $5 million , to $20 million , to maximize our existing square footage with the addition of three new presses in our direct long fiber and structural foam processes, as well as robotic automation of three presses. These investments will increase capacity, as well as efficiencies, increase throughput and leverage our labor to drive revenue. Also, we can remain flexible with our capital spending in case things change later this year," Duvall concluded.
John Zimmer , the Company's EVP and Chief Financial Officer commented, "We have made significant progress with raw material cost recoveries and covered the majority of the inflation but expect further improvements. We will continue to work to complete the remaining arrangements during the second quarter 2022.
"It was a good quarter for the Company as we returned to double-digit Adjusted EBITDA margin, on a sequential quarter basis. We were able to exceed operating profit and net income levels compared to the prior year quarter, despite inflationary pressures from non-raw material costs, such as labor, supplies and energy. Looking forward, customer demand continues to be strong, and the Company is on track to launch several new programs during the remainder of 2022. We will monitor ongoing headwinds from inflationary pressures, supply disruptions and changes in monetary policies that could impact customer demand," concluded Zimmer.
The Company signed $10 million of new business in the first quarter of 2022. As a result of the new business and the program wins in 2021 that will launch during 2022, the Company will increase its planned annual capital expenditures in 2022 from $14 million to $16 million , to approximately $20 million for the year. Expenditures for automation and the addition of three presses in the direct long fiber and structural foam processes will provide added capacity to allow the Company to meet its current demand and to continue to add new business.
The Company's total liquidity at the end of the first fiscal quarter 2022 was $20.8 million with $1.3 million in cash and $19.5 million of undrawn capacity under the Company's revolving credit facility. The Company's term debt was $24.2 million at March 31 , 2022. The term debt to trailing twelve months Adjusted EBITDA1 was less than one times Adjusted EBITDA1 at the end of the fiscal first quarter. The Company had a return on capital employed1 of 4.5%, or 18% on an annualized basis, for the first quarter 2022, which was consistent with the first quarter of 2021.
1 Adjusted EBITDA and return on capital employed are metrics and non-GAAP financial measures as defined and reconciled below.
The Company will conduct a conference call today at 10:00 a.m. Eastern Time to discuss financial and operating results for the quarter ended March 31, 2022 . To access the call live by phone, dial (844) 881-0134 and ask for the Core Molding Technologies call at least 10 minutes prior to the start time. A telephonic replay will be available through May 17, 2022 , by calling (877) 344-7529 and using passcode ID: 4780180#. A webcast of the call will also be available live and for later replay on the Company's Investor Relations website at www.coremt.com/investor-relations/events-presentations/.
About Core Molding Technologies, Inc.
Core Molding Technologies is a leading engineered materials company specializing in molded structural products, principally in building products, utilities, transportation and powersports industries across North America and Mexico. The Company operates in one operating segment as a molder of thermoplastic and thermoset structural products. The Company's operating segment consists of one reporting unit, Core Molding Technologies. The Company offers customers a wide range of manufacturing processes to fit various program volume and investment requirements. These processes include compression molding of sheet molding compound ("SMC"), resin transfer molding ("RTM"), liquid molding of dicyclopentadiene ("DCPD"), spray-up and hand-lay-up, direct long-fiber thermoplastics ("D-LFT") and structural foam and structural web injection molding ("SIM"). Core Molding Technologies serves a wide variety of markets, including the medium and heavy-duty truck, marine, automotive, agriculture, construction, and other commercial products. The demand for Core Molding Technologies' products is affected by economic conditions in the United States , Mexico , and Canada. Core Molding Technologies' operations may change proportionately more than revenues from operations.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws that are subject to risks and uncertainties. These statements often include words such as "believe", "anticipate", "plan", "expect", "intend", "will", "should", "could", "would", "project", "continue", "likely", and similar expressions. In particular, this press release may contain forward-looking statements about the Company's expectations for future periods with respect to its plans to improve financial results, the future of the Company's end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the plastics, transportation, marine and commercial product industries, efforts of the Company to expand its customer base and develop new products to diversify markets, materials and processes and increase operational enhancements, the Company's initiatives to quote and execute manufacturing processes for new business, acquire raw materials, address inflationary pressures, regulatory matters and labor relations and the Company's financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company's filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.
Company Contact: Core Molding Technologies, Inc. John Zimmer Executive Vice President & Chief Financial Officer 614-870-5604
Investor Relations Contact: Three Part Advisors, LLC Sandy Martin or Steven Hooser 214-616-2207
(unaudited, in thousands, except share and per share data)
Selling, general and administrative expense
Net periodic post-retirement benefit cost
Net income per common share:
Prepaid expenses and other current assets
Property, plant and equipment, net
Current portion of long-term debt
Accumulated other comprehensive income, net of income taxes
Total Liabilities and Stockholders' Euqity
Consolidated Statements of Cash Flows
Cash flows from operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Change in operating assets and liabilities:
Net cash used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities:
Gross repayments on revolving line of credit
Gross borrowings on revolving line of credit
Payment of deferred loan costs
Payments related to purchase of treasury stock
Payment on principal on term loans
Net cash (used in) provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginnng of period
Cash and cash equivalents at end of period
Fixed asset purchases in accounts payable
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation and amortization of long-lived assets, (iv) share based compensation expense, (v) restricting costs, (vi) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations. Free Cash Flow represents net cash (used in) provided by operating activities less purchase of property, plant and equipment and net working capital. These metrics are supplemental measures of our operating performance that are neither required by nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of these measures may not be comparable to similarly named measures reported by other companies. The following tables present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to Adjusted EBITDA for the periods presented:
Net Income to Adjusted EBITDA Reconciliation
Fiscal Quarters Ended March 31, 2022 and 2021
Adjusted EBITDA as percent of net sales
(1) Includes interest expense and non-cash periodic post-retirement benefit cost
Computation of Return on Capital Employed
Fiscal Quarters Ended March 31, 2022 and 2021
Annualized return on capital employed
Fiscal Quarters Ended March 31, 2022 and 2021
Cash flow used in operations
Purchase of property, plant and equipment
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