CORE MOLDING TECHNOLOGIES INC

Previous wording

Product sales fluctuate in response to several factors, including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality. The Company's largest market, North American truck, which is highly cyclical, accounted for 56%, 52%, and 45% of the Company’s product revenue for the years ended December 31, 2024, 2023, and 2022, respectively.

Current wording

Product sales fluctuate in response to several factors, including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality. The Company's largest market, North American truck, which is highly cyclical, accounted for 44%, 56%, and 52% of the Company’s product revenue for the years ended December 31, 2025, 2024, and 2023, respectively.

Previous wording

Looking forward, based on industry analyst projections, customer forecasts, cyclical demand, and customer programs ramping down throughout 2025, offset by anticipated program launches and price changes, the Company expects revenues for first half of the calendar year 2025 to decrease by approximately 5 to 10 percent as compared to 2024, but remain flat for the full year 2025 as compared to 2024. The Company also expects a change in mix in 2025 as compared to 2024 between product revenues and tooling revenues as new programs launch during 2025.

Current wording

Looking forward, based on industry analyst projections, customer forecasts, cyclical demand, anticipated program launches and price changes, the Company expects revenues for the calendar year 2026 to increase by approximately 0 to 5 percent as compared to 2025 and the second half of 2026 to be greater than the first half of 2026. The Company also expects a consistent mix in 2026 as compared to 2025 between product revenues and tooling revenues as new programs launch during 2026. In 2026, the Company expects to incur incremental one-time costs of approximately $2,500,000 in connection with the Mexico Expansion Project, primarily related to press relocations and the temporary overlap of two facility leases in Monterrey, as well as approximately $1,000,000 associated with the Company’s succession plan. Both expenses will primarily be incurred during the first half of 2026 and will be recorded in Selling, General, and Administrative expenses.

Previous wording

Net sales for the years ended December 31, 2023 and 2022 totaled $357,738,000 and $377,376,000, respectively. Included in total sales were tooling project sales of $10,363,000 and $18,675,000 for the years ended December 31, 2023 and 2022, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis. Product sales, excluding tooling project sales, for the year ended December 31, 2023 were $347,375,000 compared to $358,701,000 for the same period in 2022. The decrease in sales is primarily the result of lower demand from customers in building products and industrial and utilities industries, offset by higher demand from customers in the heavy-duty truck industry, full year impact of price increases related to the recoupment of raw material inflation costs, and revenues from new program launches.

Current wording

Net sales for the years ended December 31, 2025 and 2024 totaled $273,798,000 and $302,378,000, respectively. Included in total sales were tooling project sales of $41,593,000 and $11,286,000 for the years ended December 31, 2025 and 2024, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis. Product sales, excluding tooling project sales, for the year ended December 31, 2025 were $232,205,000 compared to $291,092,000 for the same period in 2024. The decrease in sales is primarily the result of lower demand from the medium and heavy-duty truck and power sports, including transitioning the Company's business with Volvo from existing programs that the Company currently supplies to new programs that the Company does not support, offset by new program launches and price increases.

Previous wording

Gross margin was approximately 18.0% of sales for the year ended December 31, 2023, compared with 13.9% for the year ended December 31, 2022. The gross margin percentage increase was due to net changes in selling price and raw material cost of 5.3% and favorable product mix and production efficiencies of 0.6%, offset by lower fixed cost leverage of 1.2% and unfavorable foreign currency impact of 0.6%.

Current wording

Gross margin was approximately 17.4% of sales for the year ended December 31, 2025, compared with 17.6% for the year ended December 31, 2024. The gross margin percentage decrease was due to unfavorable product mix and production inefficiencies of 1.0% offset by net changes in selling price and raw material cost of 0.8%.

Previous wording

The Company recorded net income for 2023 of $20,324,000 or $2.31 per diluted share, compared with net income of $12,203,000 or $1.44 per diluted share for 2022.

Current wording

The Company recorded net income for 2025 of $11,195,000 or $1.29 per diluted share, compared with net income of $13,299,000 or $1.51 per diluted share for 2024.

Previous wording

Comprehensive income totaled $22,572,000 in 2023, compared with comprehensive income of $14,181,000 in 2022. The increase was primarily related to an increase in net income of $8,121,000.

Current wording

Comprehensive income totaled $12,841,000 in 2025, compared with comprehensive income of $10,290,000 in 2024. The increase was primarily related to increase of foreign currency hedges of $4,605,000 offset by decreases in net income of $2,104,000.

Previous wording

The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties. Primary cash requirements are for operating expenses, capital expenditures, repayments of debt, and acquisitions. The Company from time to time will enter into foreign exchange contracts and interest rate swaps to mitigate risk of foreign exchange and interest rate volatility. As of December 31, 2024, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $29,668,000 and $21,719,000, respectively. At December 31, 2023, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $9,195,000 and $23,229,000, respectively.

Current wording

The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties. Primary cash requirements are for operating expenses, capital expenditures, repayments of debt, and acquisitions. The Company from time to time will enter into foreign exchange contracts and interest rate swaps to mitigate risk of foreign exchange and interest rate volatility. As of December 31, 2025, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $66,856,000 and $19,843,000, respectively. At December 31, 2024, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $29,668,000 and $21,719,000, respectively.

Previous wording

Cash provided by operating activities totaled $35,151,000 for the year ended December 31, 2024. Net income of $13,299,000 positively impacted operating cash flows. Cash flows were positively impact by non-cash deductions in net income from depreciation and amortization, share based compensation and deferred income taxes of $13,399,000, $2,495,000 and $473,000, respectively. A decrease in working capital of $4,064,000 resulted in an increase in cash. The increase in cash from working capital was primarily related to net changes in accounts receivable, inventory and other prepaid assets, offset by net changes in accounts payable and other accrued liabilities.

Current wording

Cash provided by operating activities totaled $19,185,000 for the year ended December 31, 2025. Net income of $11,195,000 positively impacted operating cash flows. Cash flows were positively impacted by non-cash deductions in net income from depreciation and amortization and share based compensation of $12,348,000 and $1,788,000, respectively. An increase in working capital of $5,332,000 resulted in a decrease in cash. The decrease in cash from working capital was primarily related to net changes in accounts payable, inventory and prepaid and other assets.

Previous wording

Cash used in investing activities totaled $11,525,000 for the year ended December 31, 2024, related to purchases of property, plant and equipment for additional capacity, automation, new programs and equipment improvements at the Company’s production facilities. The Company anticipates spending approximately $10,000,000 to $12,000,000 on property, plant and equipment purchases for all of the Company's operations for the year ended December 31, 2025. The Company plans on using cash on hand and cash from operations to finance capital expenditures. At December 31, 2024, purchase commitments for capital expenditures in progress were approximately $2,802,000.

Current wording

Cash used in investing activities totaled $17,268,000 for the year ended December 31, 2025, of which $10,809,000 relates to purchases of property, plant and equipment for additional capacity, automation, new programs and equipment improvements at the Company’s production facilities and $6,459,000 relates to the Mexico expansion project. At December 31, 2025, purchase commitments for capital expenditures in progress were approximately $13,766,000. The Company anticipates spending approximately $25,000,000 to $30,000,000 during 2026 on property, plant and equipment purchases for all of the Company's operations. Included in the Company's anticipated spending in 2026 is approximately $18,000,000 to $20,000,000 for the Mexico expansion project.

Previous wording

Cash used in financing activities totaled $5,927,000 for the year ended December 31, 2024. Cash activity primarily consisted of the purchase of treasury stock related to the Company's stock buy back plan of $2,939,000, purchase of treasury stock of $1,440,000 in exchange for payment of taxes related to net share settlements of equity awards and repayments of long-term debt of $1,548,000.

Current wording

Cash used in financing activities totaled $5,662,000 for the year ended December 31, 2025. Cash activity primarily consisted of the purchase of treasury stock related to the Company's stock buy back plan of $3,174,000, repayments of long-term debt of $1,887,000 and purchase of treasury stock of $601,000 in exchange for payment of taxes related to net share settlements of equity awards.

Previous wording

At December 31, 2024, the Company had $41,803,000 of cash on hand, an available revolving line of credit of $25,000,000 and capex line of credit of $25,000,000. If a material adverse change in the financial position of the Company should occur, or if actual sales or expenses are substantially different than what has been forecasted, the Company's liquidity and ability to obtain further financing to fund future operating and capital requirements could be negatively impacted.

Current wording

At December 31, 2025, the Company had $38,058,000 of cash on hand, an available revolving line of credit of $25,000,000 and capex line of credit of $25,000,000. If a material adverse change in the financial position of the Company should occur, or if actual sales or expenses are substantially different than what has been forecasted, the Company's liquidity and ability to obtain further financing to fund future operating and capital requirements could be negatively impacted.

Previous wording

In connection with the credit agreement, the Company incurred debt origination fees of $402,000 related to the Huntington Credit Agreement, which is being amortized over the life of the Credit Agreement. The aggregate unamortized deferred financing fees as of December 31, 2024 totaled $210,000.

Current wording

In connection with the credit agreement, the Company incurred debt origination fees of $402,000 related to the Huntington Credit Agreement, which is being amortized over the life of the Credit Agreement. The aggregate unamortized deferred financing fees as of December 31, 2025 and 2024 was $129,000 and $210,000, respectively.

Previous wording

Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of December 31, 2024. The interest rate for the Huntington Revolving Loan was 6.33% as of December 31, 2024.

Current wording

Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of December 31, 2025. The interest rate for the Huntington Revolving Loan was 5.46% as of December 31, 2025.

Previous wording

Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a Term Loan commitment (the “Huntington Term Loan”) of $25,000,000 ($25,000,000 of which was advanced to the Company on July 22, 2022). The Huntington Term Loan is to be repaid in monthly installments beginning August 2022 of $104,000 per month for the first 24 months, $156,000 per month for the next 24 months, $208,000 for the next 12 months and the remaining balance to be paid on July 22, 2027. The interest rate for the Huntington Term Loan was 6.11% as of December 31, 2024.

Current wording

Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a Term Loan commitment (the “Huntington Term Loan”) of $25,000,000 ($25,000,000 of which was advanced to the Company on July 22, 2022). The Huntington Term Loan is to be repaid in monthly installments beginning August 2022 of $104,000 per month for the first 24 months, $156,000 per month for the next 24 months, $208,000 for the next 12 months and the remaining balance to be paid on July 22, 2027. The interest rate for the Huntington Term Loan was 5.46% as of December 31, 2025.

Previous wording

The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July 2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term Loan. Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $491,000 at December 31, 2024.

Current wording

The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July 2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term Loan. Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $23,000 at December 31, 2025.

Previous wording

The Registration Statement registered common stock, preferred stock, debt securities, warrants, depositary shares, rights, units, and any combination of the foregoing, for a maximum aggregate offering price of up to $50 million, which may be sold from time to time. The terms of any securities offered under the Registration Statement and intended use of proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the SEC at the times of the offerings. The Registration Statement has a three-year term.

Current wording

On December 22, 2023 the Company filed a universal shelf Registration Statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended, which became effective on January 8, 2024. The Registration Statement replaces an existing shelf Registration Statement which expired on December 16, 2023. The Registration Statement registered common stock, preferred stock, debt securities, warrants, depositary shares, rights, units, and any combination of the foregoing, for a maximum aggregate offering price of up to $50 million, which may be sold from time to time. The terms of any securities offered under the Registration Statement and intended use of proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the SEC at the times of the offerings. The Registration Statement has a three-year term.

Previous wording

Management maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company determined that no allowance for doubtful accounts was needed at December 31, 2024 or December 31, 2023, respectively. Management also records estimates for customer returns and deductions, discounts offered to customers, and for price adjustments. Should customer returns and deductions, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company had an allowance for estimated chargebacks of $227,000 at December 31, 2024 and $138,000 at December 31, 2023.

Current wording

Management maintains allowances for credit losses resulting from the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company determined that $58,000 allowance for credit losses was needed at December 31, 2025 and no allowances for credit losses was needed at December 31, 2024. Management also records estimates for customer returns and deductions, discounts offered to customers, and for price adjustments. Should customer returns and deductions, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company had an allowance for estimated chargebacks of $212,000 at December 31, 2025 and $227,000 at December 31, 2024.

Previous wording

Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable value. The inventories are accounted for using the first-in, first-out (FIFO) method of determining inventory costs. Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based on historical and anticipated usage. The Company has recorded an allowance for slow moving and obsolete inventory of $1,392,000 at December 31, 2024 and $671,000 at December 31, 2023.

Current wording

Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable value. The inventories are accounted for using the first-in, first-out (FIFO) method of determining inventory costs. Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based on historical and anticipated usage. The Company has recorded an allowance for slow moving and obsolete inventory of $1,137,000 at December 31, 2025 and $1,392,000 at December 31, 2024.

Previous wording

The Company is self-insured with respect to Columbus, Ohio; Gaffney, South Carolina; Winona, Minnesota; and Brownsville, Texas for medical, dental and vision claims and Columbus, Ohio for workers’ compensation claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental and vision claims incurred but not reported and worker’s compensation claims incurred but not reported at December 31, 2024 and December 31, 2023 of $1,087,000 and $988,000, respectively, included within the Other Current Liabilities on the Company's Consolidated Balance Sheets.

Current wording

The Company is self-insured with respect to Columbus, Ohio; Gaffney, South Carolina; Winona, Minnesota; and Brownsville, Texas for medical, dental and vision claims and Columbus, Ohio for workers’ compensation claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental and vision claims incurred but not reported and worker’s compensation claims incurred but not reported at December 31, 2025 and December 31, 2024 of $845,000 and $1,087,000, respectively. The accrual was included within the Other Current Liabilities on the Company's Consolidated Balance Sheets.

Previous wording

Management records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain retirees. Should actual results differ from the assumptions used to determine the reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on the Company's operations. The effect of a change in healthcare costs is described in Note 14 - Post Retirement Benefits. The Company had a liability for post-retirement healthcare benefits based on actuarial computed estimates of $3,298,000 at December 31, 2024 and $3,116,000 at December 31, 2023.

Current wording

Management records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain retirees. Should actual results differ from the assumptions used to determine the reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on the Company's operations. The effect of a change in healthcare costs is described in Note 14 - Post Retirement Benefits. The Company had a liability for post-retirement healthcare benefits based on actuarial computed estimates of $3,287,000 at December 31, 2025 and $3,298,000 at December 31, 2024.

Previous wording

The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. Management reviews all available evidence, both positive and negative, to assess the long-term earnings potential of the Company using a number of alternatives to evaluate financial results in economic cycles at various industry volume conditions. The projected availability of taxable income to realize the tax benefits from the reversal of temporary differences before expiration of these benefits are also considered. The Company evaluates provisions and deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available evidence.

Current wording

The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. Management makes assumptions, judgments, and estimates to determine our current and deferred tax provision and also the deferred tax assets and liabilities. The Company evaluates provisions and deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available evidence.

Previous wording

As of December 31, 2024 the Company had a net deferred tax asset of $1,454,000 and $183,000 related to tax positions in Mexico and Canada and deferred tax liabilities of $1,219,000 related to tax positions in the United States. Deferred tax assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are included in "Other non-current liabilities" on the Consolidated Balance Sheets. As of December 31, 2024, the Company had a valuation allowance of $1,265,000 against the deferred tax asset related to local tax positions in the United States, due to cumulative losses over the last three years and uncertainty related to the Company’s ability to realize the deferred assets. The Company believes that the deferred tax assets associated with the Mexican and Canadian tax jurisdictions are more-likely-than-not to be realizable based on estimates of future taxable income.

Current wording

As of December 31, 2025 the Company had a net deferred tax asset of $1,402,000 and $221,000 related to tax positions in Mexico and Canada and deferred tax liabilities of $1,035,000 related to tax positions in the United States. Deferred tax assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are included in "Other non-current liabilities" on the Consolidated Balance Sheets. As of December 31, 2025, the Company had a valuation allowance of $1,327,000 against the deferred tax asset related to local (city) jurisdiction tax positions, due to cumulative losses over the last three years in the local jurisdiction and uncertainty related to the Company’s ability to realize the deferred assets. The Company believes that the net deferred tax assets associated with the Mexican and Canada tax jurisdictions are more-likely-than-not to be realizable based on estimates of future taxable income.

Previous wording

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. As this accounting standard only impacts disclosure, it will not have a material impact on the Company's Consolidated Financial Statements.

Current wording

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional disclosures regarding income taxes paid. The Company has fully implemented the requirements of ASU 2023-09 for the current reporting period and has included the corresponding disaggregated reconciliation tables and income tax paid disclosures within the related footnote. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. (See Note 13, Income Taxes.)