Core Viewpoint - Core Molding Technologies (CMT) reported Q2 FY2025 results that exceeded analyst estimates for both revenue and earnings, but showed year-over-year declines in revenue and net income due to weakness in core markets [1][5] Financial Performance - Q2 FY2025 adjusted EPS was $0.53, beating the expected $0.46, while GAAP revenue was $79.2 million, surpassing the $75.5 million forecast [1][5] - Year-over-year, GAAP revenue declined by 10.7% from $88.7 million in Q2 FY2024, and net income decreased by 27.4% from $0.73 EPS in Q2 FY2024 [2][5] - Gross margin fell to 18.1% from 20.0% in the previous year, and operating income dropped 30.5% to $5.2 million [2][8] Business Overview - Core Molding Technologies specializes in engineered structural plastics and composites, serving sectors like transportation and powersports [3][12] - The company focuses on converting traditional metal components to lighter composite solutions, enhancing performance and weight [3][12] Strategic Focus - Recent investments include $1.9 million in R&D and a $25 million investment in plant expansions to support new contracts and growth [4][7] - The company aims to diversify its end-markets and improve operational efficiency to protect margins [4][14] Customer and Market Dynamics - The two largest segments, medium and heavy-duty trucks and powersports, accounted for approximately 75% of total revenue, both experiencing double-digit declines [6][12] - New customer programs have been secured across various markets, including a significant deal with Volvo Mexico expected to generate $150 million over the next seven to ten years [7][12] Operational Metrics - Tooling sales increased significantly by 267% to $17.6 million, partially offsetting a 27% decline in product revenue [6][10] - Operating cash flow for the first half of FY2025 was $9.6 million, with free cash flow totaling $5.2 million, down from $16.1 million in the prior year [9][10] Future Outlook - Management projects a moderation in year-over-year sales decline to a range of 4% to 6% for the second half of FY2025, contingent on new program wins and demand stabilization [14] - The target for gross margins remains in the 17% to 19% range for the full fiscal year, balancing capacity investments and cost control against pricing effects [14]