Core Molding Technologies(US:CMT)2025-03-11 19:48Part I Business Core Molding Technologies operates as a single segment, molding thermoplastic and thermoset products for diverse markets, with operations across six facilities in the U.S., Canada, and Mexico - The company operates as a single segment in engineered materials, molding thermoplastic and thermoset products for various markets, with six production facilities across the U.S., Canada, and Mexico11 Major Customer Sales Concentration (as % of Total Sales) | Customer | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | BRP | 10% | 14% | 14% | | International | 22% | 20% | 17% | | PACCAR | 13% | 10% | 10% | | Yamaha | 10% | 9% | 6% | | Volvo | 14% | 16% | 14% | Sales by Country (in thousands) | Country | 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 | - As of December 31, 2024, the company employed 1,570 people, with 67.4% of the workforce covered by collective bargaining agreements expiring between 2025 and 20264041 Capital Expenditures and R&D (in millions) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Capital Expenditures | $11.5 | $9.1 | $16.6 | | Research & Development | $1.9 | $1.7 | $1.6 | Risk Factors The company faces significant risks from customer concentration, cyclical industry demand, raw material price volatility, labor relations, foreign operations, and cybersecurity threats - The company faces significant customer concentration risk, with five customers accounting for approximately 69% of total sales in 202452 - A significant customer, Volvo (14% of 2024 sales), is transitioning to new programs not supported by the company, impacting business from late 2024 through 202654 - The business is exposed to the highly cyclical North American heavy and medium-duty truck industry, which accounted for 56% of product sales in 202456 - As of December 31, 2024, approximately 67.4% of the workforce is unionized, with agreements expiring in 2025 and 2026, posing work stoppage risks6768 - The company faces risks from evolving U.S. trade policies, including potential new tariffs on imports from Mexico and Canada, which could increase costs71 - Cybersecurity incidents pose a growing risk, potentially disrupting operations, compromising confidential information, and harming financial performance105106 Unresolved Staff Comments The company reports no unresolved staff comments - None Cybersecurity The company maintains a cyber risk management program integrated into its ERM, overseen by the senior executive team and Board, with no material incidents reported to date - The company has a cyber risk management program integrated into its ERM, overseen by the senior executive team and Board of Directors110114116 - Safeguarding processes include employee training, disaster recovery exercises, access controls, multi-factor authentication, and 24/7 third-party monitoring111112 - As of the report date, no cybersecurity incidents have had a material impact on the business or operations113 Properties The company operates six production facilities across the U.S., Canada, and Mexico, with four owned and two leased, all considered adequate for current needs - The company operates six production facilities in the U.S., Canada, and Mexico, with four owned and two leased117 Legal Proceedings The company is not aware of any material pending legal proceedings - The Company is not aware of any material pending legal proceedings to which it or its subsidiaries are a party118 Mine Safety Disclosure This section is not applicable - None Part II Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The company's common stock trades on NYSE American LLC under 'CMT', with a $7.5 million repurchase program approved in March 2024, under which 244,701 shares were repurchased - The company's common stock is traded on the NYSE American LLC under the symbol 'CMT'121 - On March 11, 2024, a stock repurchase program for up to $7.5 million was approved, with 244,701 shares repurchased during the year122123 Stock Repurchase Activity (Q4 2024) | Period | Total Shares Purchased | Average Price Paid | Max Amount Remaining Under Program | | :--- | :--- | :--- | :--- | | Oct 2024 | — | $— | $5,136,000 | | Nov 2024 | — | $— | $5,136,000 | | Dec 2024 | 36,170 | $15.95 | $4,561,000 | [RESERVED] This section is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales decreased to $302.4 million in 2024 due to lower demand, with net income falling to $13.3 million, while 2025 revenue is expected to be flat with strong liquidity Financial Performance Comparison (2024 vs. 2023) | Metric (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Sales | $302,378 | $357,738 | | Gross Margin | $53,260 (17.6%) | $64,520 (18.0%) | | Net Income | $13,299 | $20,324 | | Diluted EPS | $1.51 | $2.31 | - The decrease in 2024 sales was primarily due to lower demand across all significant markets, with product sales falling to $291.1 million from $347.4 million in 2023135 - For 2025, the company expects first-half revenues to decrease by 5-10%, but full-year revenues to remain flat due to new program launches131 - The company ended 2024 with $41.8 million in cash, a $25 million available revolving line of credit, and a $25 million capex line of credit, providing sufficient liquidity153154 Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from commodity prices, interest rates, and foreign currency fluctuations, with hedging strategies in place to mitigate some impacts - Primary market risks include changes in commodity prices (resins, fiberglass), interest rates on variable-rate debt, and foreign currency fluctuations (Mexican Peso and Canadian Dollar)194195 - A hypothetical 10% increase in commodity prices would adversely affect operating margins197 - A hypothetical 10% decrease in the U.S. Dollar to Mexican Peso and Canadian Dollar exchange rate would increase operating costs and adversely affect operating margins197 Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for 2022-2024, with Crowe LLP issuing an unqualified opinion on both financial statements and internal controls - The independent auditor, Crowe LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of December 31, 2024199200 Consolidated Statement of Operations Highlights (in thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Sales | $302,378 | $357,738 | $377,376 | | Gross Margin | $53,260 | $64,520 | $52,402 | | Operating Income | $16,695 | $26,537 | $18,003 | | Net Income | $13,299 | $20,324 | $12,203 | Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $102,888 | $102,879 | | Total Assets | $209,550 | $213,377 | | Total Current Liabilities | $36,711 | $46,186 | | Total Liabilities | $62,189 | $74,424 | | Total Stockholders' Equity | $147,361 | $138,953 | Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $35,151 | $34,842 | $18,982 | | Net cash used in investing activities | $(11,525) | $(9,100) | $(16,588) | | Net cash used in financing activities | $(5,927) | $(5,821) | $(4,357) | | Cash and cash equivalents at end of year | $41,803 | $24,104 | $4,183 | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure This section is not applicable - Not Applicable Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period334 - Based on the COSO framework, management concluded that internal control over financial reporting was effective as of December 31, 2024336 - No material changes in internal control over financial reporting occurred during the last fiscal quarter338 Other Information No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q4 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended December 31, 2024339 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This section is not applicable - Not applicable Part III Directors, Executive Officers, and Corporate Governance Information for this item is incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after fiscal year-end - Information is incorporated by reference to the Company's definitive proxy statement340 Executive Compensation Information for this item is incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after fiscal year-end - Information is incorporated by reference to the Company's definitive proxy statement341 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section provides equity compensation plan information as of December 31, 2024, with other security ownership details incorporated by reference from the proxy statement Equity Compensation Plan Information as of December 31, 2024 | Plan Category | Number of Shares to be Issued Upon Exercise | Weighted Average Exercise Price | Number of Shares Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 281,340 | $15.77 | 346,848 | - Other information required by this item is incorporated by reference to the Company's definitive proxy statement342 Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after fiscal year-end - Information is incorporated by reference to the Company's definitive proxy statement343 Principal Accountant Fees and Services Information for this item is incorporated by reference from the company's definitive proxy statement, to be filed within 120 days after fiscal year-end - Information is incorporated by reference to the Company's definitive proxy statement344 Part IV Exhibits and Financial Statement Schedules This section lists documents filed as part of the Form 10-K, including financial statements and Schedule II—Valuation and Qualifying Accounts and Reserves - The financial statements are referenced under Part II, Item 8345 - Schedule II—Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2024, 2023, and 2022 is filed with the report346 Form 10-K Summary This section is not applicable - Not Applicable