CORE MOLDING TECHNOLOGIES INC Q4 FY2025 earnings call

• Transformed organization with three foundational values: winning culture, disciplined execution, and daily inner drive for improvement. - Completed comprehensive executive leadership transition. - Invest for Growth initiative generated $63 million in business wins, majority supporting strategic diversification. - Power sports showing industry recovery with new product solutions launched. - SMC business expanded with new sales channel, VOC initiative helped secure new programs and expand top coat capabilities. - Invested $6.5 million in 2025 for Mexico expansions and greenfield plan, with $19 million planned in 2026. - Began relocating DCPD presses and low-pressure injection molding operations to Monterey. - TOPCO paint capability enhances offerings. - Fourth quarter revenue driven by tooling revenue, SG&A expense decreased. - Operational teams achieved 99% on-time delivery and 62 parts per million quality performance.

Revenue was $74.7 million in the fourth quarter, a 27.8% sequential increase and 19.5% year-over-year growth. Truck sector was 44% of product sales for 2025, with revenue declining 9.5% overall. Power sports showed two consecutive quarters of revenue growth in 2025 due to new product solutions launched. SMC business had $12 million in fourth quarter revenue and $21 million for full year, with one-third of compounds launched and all scheduled to be in production by end of third quarter 2026. Adjusted EBITDA margin was 10.2% in fourth quarter, up 100 basis points from year ago. Cash flow from operations totaled over $19 million in 2025. Gross margins were stable within 17% - 19% range.

• Total sales expected to be flat to up approximately 5% in 2026, with tooling revenue weighted more heavily toward fourth quarter. - Majority of $63 million in new wins to impact results during second half of 2026 and 2027. - Truck recovery expected starting in second half of 2026. - Gross margin expected in range of 17% - 19% for full year 2026. - One-time SG&A costs estimated at approximately $2.5 million related to Mexico relocation and non-capital construction activities, and $1 million related to succession planning, mostly incurred in first half of year. - Targeting 500 million in annual revenue as long-term objective.

• Tariffs remain a focus, though products manufactured in Canada and Mexico are under USMCA compliant and currently exempt. Need to closely monitor trade developments and their potential impact on customers and end markets. - Forward-looking statements are uncertain and actual results may differ materially from those expressed or implied. Factors and other risks and uncertainties described in company's SEC filings.

Q: On the outlook for flat to up 5% and tooling revenue split, Alex responded split similar to 2025 with Volvo program closing tooling revenue in Q4 2026.

Q: On margin potential beyond 17 - 19%, Dave said start to get leverage back in 2027, possibly 150 - 200 basis points.

Q: On SMC progress, Eric said 21 million annual run rate wins in 2025, one-third launched, all to be in production by end of Q3 2026.

Q: On Mexico expansion, Eric said it's tracking well with team doing great job.

Q: On CapEx in Mexico and SMC potential expansion, Alex said $18 - $20 million planned in 2026 for Mexico, 20 million of 25 million CapEx related to Volvo roof program, 5 million to greenfield plant.

Q: On SG&A, Alex said SG&A run rate looking at $30 - $32 million in 2026 with one-time costs.

Q: On Power Sports uptick, Eric said general power sports market rebounding, launched new platforms like skid plate, cargo box, and Yamaha SMC win.