Financial Performance - Net sales for the three months ended September 30, 2024, were $72,992,000, a decrease of approximately 16% compared to $86,728,000 for the same period in 2023[109] - Product sales, excluding tooling project sales, for the three months ended September 30, 2024, were $71,258,000, down from $80,896,000 in 2023, reflecting lower demand across most industries[109] - Net income for the three months ended September 30, 2024, was $3,160,000, or $0.36 per share, compared to $4,354,000, or $0.50 per share, for the same period in 2023[114] - For the nine months ended September 30, 2024, net sales totaled $239,880,000, a decrease from $283,961,000 in 2023, with product sales excluding tooling at $231,045,000 compared to $274,933,000[116] - Comprehensive income for the nine months ended September 30, 2024, was $10,620,000, down from $18,311,000 in the same period of 2023, reflecting a decrease in net income of $4,804,000 and a decrease in foreign currency hedging valuation of $2,267,000[123] Margins and Costs - Gross margin for the three months ended September 30, 2024, was 16.9%, down from 17.6% in 2023, impacted by lower fixed cost leverage and operational inefficiencies[109] - The gross margin for the nine months ended September 30, 2024, was approximately 18.1%, down from 18.9% in 2023, due to lower fixed cost leverage and operational inefficiencies[116] Future Outlook - The company expects revenues for the fourth quarter of 2024 to decrease by approximately 17% to 20% compared to the same period in 2023 due to seasonal demand slowdown and decreased customer inventory builds[105] - The company anticipates raw material pricing in the fourth quarter of 2024 to remain flat or slightly lower compared to 2023, with stable supply chains[107] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2024, totaled $30,162,000, with net income positively impacting cash flows[125] - Cash used in investing activities for the nine months ended September 30, 2024, was $7,045,000, primarily for property, plant, and equipment purchases, with anticipated spending of $11,000,000 to $13,000,000 for 2024[126] - Cash used in financing activities for the nine months ended September 30, 2024, totaled $4,873,000, including treasury stock purchases and long-term debt repayments[127] - As of September 30, 2024, the Company had $42,348,000 cash on hand and a $25,000,000 revolving loan facility with no outstanding balance[128] Debt and Financial Agreements - The Company is in compliance with financial covenants associated with the Huntington Credit Agreement as of September 30, 2024[129] - The Huntington Credit Agreement provides secured loans totaling $75,000,000, including a term loan, CapEx loan, and revolving loan commitments[131] - The interest rate for the Huntington Term Loan was 6.85% as of September 30, 2024, down from 7.11% as of December 31, 2023[143] - The Company entered into an interest rate swap agreement to hedge $25,000,000 of the Huntington Term Loan, resulting in an effective interest rate of 4.75%[144] Market Risks - The Company is exposed to market risks from fluctuations in commodity prices, interest rates, and foreign currency exchange rates, which could adversely affect operating margins[149][150] Restructuring Charges - The company incurred restructuring charges of $228,000 for the three months ended September 30, 2024, with anticipated additional charges of approximately $81,000 in the following quarter[108] Interest Income - The company recorded net interest income of $144,000 for the three months ended September 30, 2024, compared to net interest expense of $187,000 for the same period in 2023[111]
Core Molding Technologies(CMT) - 2024 Q3 - Quarterly Report