Core Molding Technologies, Inc. Reports Financial Results for the Quarter Ended March 31, 2025

Overview of the Company’s Financial Performance

Core Molding Technologies is a manufacturer of thermoplastic and thermoset structural products, operating in the engineered materials market. The company produces and sells molded products for various markets, including medium and heavy-duty trucks, power sports, building products, industrial and utilities, and other commercial markets. Core Molding Technologies has its headquarters in Columbus, Ohio, and operates six production facilities in the United States, Canada, and Mexico.

Revenue and Profit Trends

For the three months ended March 31, 2025, Core Molding Technologies reported net sales of $61,447,000, compared to $78,145,000 for the same period in 2024. This decrease in sales was primarily due to lower demand in the power sports and medium and heavy-duty truck markets, including the transition of the company’s business with Volvo from existing programs to new programs that the company does not support.

Gross margin for the three months ended March 31, 2025, was 19.2% of sales, compared to 17.0% for the same period in 2024. The improvement in gross margin was due to favorable changes in selling price and raw material costs, as well as product mix and operational efficiencies, partially offset by lower fixed cost leverage.

Selling, general, and administrative (SG&A) expenses for the three months ended March 31, 2025, were $8,944,000, which included $500,000 in severance expense. Excluding the severance expense, SG&A costs decreased to $8,444,000 from $8,573,000 in the same period of 2024, primarily due to lower labor and benefits, including bonus, partially offset by higher foreign currency expenses.

The company recorded net income of $2,183,000, or $0.25 per basic and diluted share, for the three months ended March 31, 2025, compared to net income of $3,759,000, or $0.43 per basic and diluted share, for the same period in 2024.

Strengths and Weaknesses

Strengths:

• Stable raw material supply chains and expected flat or slightly increased raw material pricing in 2025
• Compliance with the United States-Mexico-Canada Agreement (USMCA), which helps mitigate the impact of tariffs on raw material costs
• Improved gross margin due to favorable changes in selling price, raw material costs, product mix, and operational efficiencies

Weaknesses:

• Decreased sales due to lower demand in the power sports and medium and heavy-duty truck markets
• Transition of the company’s business with Volvo from existing programs to new programs that the company does not support
• Lower fixed cost leverage, which partially offset the improvements in gross margin

Outlook for the Future

Looking forward, the company expects revenues for the first half of 2025 to decrease by approximately 10 to 15 percent compared to 2024, based on industry analyst projections, customer forecasts, cyclical demand, and customer programs ramping down throughout 2025, offset by anticipated program launches and price changes.

For the full year 2025, macro-economic and potential regulatory changes, including rapidly changing tariff rates and the resulting impact on the economy and potential changes to EPA regulations, may impact the company’s customers’ demand levels, which would decrease the company’s revenues. The company still expects a change in revenue mix in 2025 as compared to 2024, with an increase in tooling revenues as new programs launch during 2025.

The company’s raw material supply chains are expected to remain stable, and raw material pricing in 2025 is expected to remain flat or experience a slight increase relative to 2024. However, future changes to tariff rates or application of tariffs to other countries and materials could have an impact on the company’s material costs.