CMT

• Overall Business Transformation & Commercial Progress

  • The company has transitioned from a turnaround story to a growing, execution-driven enterprise after over 30 years of operations, with an upcoming September investor day to showcase its manufacturing capabilities and operations.
  • Secured nearly $26 million in net new business wins in the first half of 2026, remaining on track to hit the full-year target of $50 million in incremental new business; over the past two years, total new business wins exceed $112 million, providing visibility to production revenue opportunities of over $300 million in 2027.
  • 100% of 2026 new business awards are new opportunities (not replacement programs), 65% originate outside traditional truck and power sports markets, and 74% will be produced on existing U.S. manufacturing capacity to improve return on invested capital and cash flow.
  • Added two dedicated business development managers to expand penetration in construction/agricultural markets and grow proprietary SMC advanced composite customer relationships.

• Capital Expansion & Operational Excellence

  • Completed the greenfield Monterrey, Mexico facility on time and under nine months on budget, which is now in production of structural foam, structural web, and DCPD products with full paint application systems.
  • The Matamoros, Mexico plant expansion remains on track, adding two additional 4,500 ton large molding machines in the second half of 2026; total strategic investments across Mexico operations are $25 million.
  • All Mexico expansion projects have not disrupted existing operations, with maintained 99.2% on-time delivery and top-tier quality performance of 49 defective parts per million (fewer than 50 defects per 1 million units produced, meeting leading OEM automotive quality standards).

• Strategic Positioning in High-Growth End Markets

  • The company is positioned to capitalize on growth from North American infrastructure modernization, energy transition, AI data center development, and grid reliability initiatives, with new awards for battery energy storage systems and broadband transmission infrastructure projects funded by U.S. infrastructure legislation.
  • Proprietary SMC composite solutions offer unique benefits versus traditional materials (lower weight, higher durability, easier installation, improved safety, corrosion resistance) that create long-term, locked-in customer relationships once designed into end products.
  • The company maintains a disciplined capital allocation strategy that balances organic growth investment with accretive M&A, and is now evaluating larger acquisition opportunities while retaining its criteria of strategic alignment, accretiveness, and strong return on capital. The long-term revenue target is $500 million across diversified end markets.

Management reiterates full fiscal 2026 guidance with no upward or downward revisions, including:

• Total full-year sales expected to be flat to up approximately 5% year-over-year, with project-based tooling revenue weighted toward the fourth quarter.
• Full-year gross margin expected to remain in the range of 17% to 19%, with individual quarterly results varying based on product mix, volume, and timing.
• Full-year capital expenditures expected to total $25 million to $30 million, with $18 million to $20 million dedicated to Mexico strategic expansion projects.
• The majority of 2025's $63 million in new program awards will begin contributing meaningfully to revenue in the second half of 2026, and reach full annualized run rates in 2027.
• Truck production volumes are expected to continue improving through the second half of 2026, with industry forecasts projecting ongoing growth through 2028.
• No material additional Mexico expansion or leadership succession-related costs are expected in the second half of 2026, after $3.4 million in expansion costs and $1.4 million in succession costs were incurred in the first half.

For the fiscal 2026 second quarter: Medium and Heavy Duty Truck represented 40% of total product sales, with revenue declining 23% year-over-year, but production volumes are beginning to improve. Power Sports generated 7% year-over-year revenue growth, driven by recently launched programs. Building Products, a smaller segment of the overall portfolio, delivered 36% year-over-year revenue growth from previously awarded new programs that entered production. Industrial & Utilities and other non-traditional end markets saw strong growth, with total production sales across all non-truck end markets increasing 20.8% year-over-year. Consolidated production sales declined 1.2% year-over-year overall, as non-truck growth offset truck market softness. Gross margin for the quarter was 20.3% (19.4% excluding a one-time customer capacity charge), an improvement of 220 basis points year-over-year. Adjusted EBITDA was $7.6 million, with a stable margin of 12.2% year-over-year. Operating income was $2.3 million, down from $5.2 million in the prior year due to elevated strategic SG&A investments. Net income was $1.8 million, or $0.21 per diluted share.

• The medium and heavy-duty truck market remains cyclical and currently soft, though management expects improvement in the second half of 2026.
  • New 2027 emissions regulations for medium and heavy-duty trucks represent a near-term wild card for industry volume; while OEMs have already completed required hardware design changes, potential regulatory adjustments or pre-buy demand shifting could create quarter-over-quarter volume volatility, even if the multi-year growth trajectory remains intact.
  • The USMCA trade policy review is ongoing, and while the company has not experienced material production disruptions to date, evolving trade policies create uncertainty for North American manufacturing operations.
  • Recent oil price increases could raise raw material costs, though the company notes its contractual raw material pass-through mechanisms are expected to substantially mitigate this impact.
  • New business wins have a typical 12 to 24 month lag between award/tooling revenue and production revenue realization, creating timing uncertainty for top-line growth.

Q: Analyst Chip Moore asked for additional detail on the expected truck market recovery in the second half of 2026 and beyond. / A: Management confirmed first half truck volumes were lower, and both industry forecasts and current order book activity across all truck customers point to a stronger second half. Industry projections expect truck volumes to continue increasing over the next two and a half years.

Q: Moore also requested more color on the growth momentum in non-traditional end markets outside truck and power sports. / A: Management explained 65% of first half 2026's $26 million in new wins are outside traditional markets, with significant growth in utility infrastructure for underground data cables serving AI data centers and broadband expansion. The company's composite solutions outperform concrete, wood, and metal on durability, weight, and ease of installation. 74% of new business uses existing U.S. capacity, avoiding large new capital outlays. Recent wins also include an SMC compound contract for trucking and an electric vehicle tailgate cover.

Q: Moore asked about management's updated approach to M&A after it was noted the company is evaluating larger potential transactions. / A: Management clarified that size is not the core focus; the company still maintains strict criteria that any acquisition must be accretive to earnings, add portfolio diversification, deliver strong return on capital employed, and align with Core Molding's culture and core operations, regardless of transaction size. The company evaluates roughly one potential opportunity per month.

Q: Analyst Bill DeZellum asked if last year's Q2 large tooling revenue was a leading indicator for current growth, and what the typical lag between tooling and production revenue is. / A: Management confirmed the 2025 large tooling revenue was for an international truck replacement program launching in early 2027, so it is not connected to current 2026 growth. The average lag between tooling revenue and production revenue is 12 to 24 months for large assembled products; SMC compound programs can have much shorter lags of 6 to 7 months due to simplified testing and validation.

Q: DeZellum asked how upcoming 2027 truck emissions regulations will impact truck volumes and demand timing. / A: Management confirmed regulations take effect January 1, 2027, tied to engine VIN issuance date. OEMs have already completed all required hardware design changes, so even if minor regulatory tweaks are made, no hardware changes will be reversed. Past emissions changes show customer pre-buy behavior, where manufacturers build large volumes of trucks before the compliance date to meet post-regulation demand, which is already contributing to rising build rates in late 2026, and this dynamic is expected to recur this cycle.