CORE MOLDING TECHNOLOGIES INC

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States of America for interim reporting, which are less than those required for annual reporting. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (all of which are normal and recurring in nature) necessary to present fairly the financial position of Core Molding Technologies, Inc. and its subsidiaries (“Core Molding Technologies” or the “Company”) at September 30, 2026, and the results of operations and cash flows for the nine months ended September 30, 2026. The “Notes to Consolidated Financial Statements” contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, should be read in conjunction with these consolidated financial statements.

Core Molding Technologies and its subsidiaries operate in the engineered materials market asone operating segment as a molder of thermoplastic and thermoset structural products. The Company produces and sells molded products for varied 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.

2. CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Principles of Consolidation: Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Revenue Recognition: The Company historically has recognized revenue from two streams, product revenue and tooling contract revenue. Product revenue is earned from the manufacture and sale of sheet molding compounds and thermoset and thermoplastic products. Product revenue is generally recognized when products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment.

Tooling Project revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer. Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over a given period. When the Company does not have an enforceable right to payment, the Company recognizes tooling project revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools.

Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.

Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash is held primarily infour banks in three separate countries. The Company had $5,437,000 cash on hand at September 30, 2026 and had $38,058,000 cash on hand at December 31, 2025.

Accounts Receivable Allowances: 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 has determined that $130,000 and $58,000 allowance for credit losses was needed at September 30, 2026 and December 31, 2025, 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 $364,000 at September 30, 2026 and $212,000 at December 31, 2025. There have been no material changes in the methodology of these calculations.

Inventories: 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 $1,147,000 at September 30, 2026 and $1,137,000 at December 31, 2025.

Contract Assets/Liabilities: Contract assets and liabilities represent the net cumulative customer billings, vendor payments and revenue recognized for tooling programs. For tooling programs where net revenue recognized and vendor payments exceed customer billings, the Company recognizes a contract asset. For tooling programs where net customer billings exceed revenue recognized and vendor payments, the Company recognizes a contract liability. Customer payment terms vary by contract and can range from progress payments based on work performed or one single payment once the contract is completed. The Company has recorded contract assets of $3,302,000 at September 30, 2026, and $59,000 at December 31, 2025. Contract assets are classified as current within prepaid expenses and other current assets on the Consolidated Balance Sheets. For the nine months ended September 30, 2026 and September 30, 2025, the Company recognized no impairments on contract assets. For the nine months ended September 30, 2026, the Company recognized $26,023,857 of revenue from contract liabilities related to open jobs outstanding as of December 31, 2025. During the third quarter of 2026, the Company amended contractual terms related to the Volvo tooling program, including the termination provisions applicable to the arrangement. As a result of the amendment, the Company recognized approximately $22 million in revenue during the quarter.

Income Taxes: 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.

Long-Lived Assets: Long-lived assets consist primarily of property, plant and equipment and definite-lived intangibles. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. The Company evaluates whether impairment exists for property, plant and equipment on the basis of undiscounted expected future cash flows from operations before interest. There were no impairment charges of the Company’s long-lived assets for the nine months ended September 30, 2026 and 2025, respectively.

Goodwill: The purchase consideration of acquired businesses has been allocated to the assets and liabilities acquired based on the estimated fair values on the respective acquisition dates. Based on these values, the excess purchase consideration over the fair value of the net assets acquired was allocated to goodwill. The Company accounts for goodwill in accordance with FASB ASC Topic 350, Intangibles - Goodwill and Other. FASB ASC Topic 350 prohibits the amortization of goodwill and requires these assets be reviewed for impairment.

The annual impairment tests of goodwill may be completed through qualitative assessments; however, the Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any period. The Company may resume the qualitative assessment in any subsequent period.

Under a qualitative and quantitative approach, the impairment test for goodwill consists of an assessment of whether it is more-likely-than-not that the fair value is less than its carrying amount. As part of the qualitative assessment, the Company considers relevant events and circumstances that affect the fair value or carrying amount of the Company. Such events and circumstances could include changes in economic conditions, industry and market conditions, cost factors, overall financial performance, and capital markets pricing. The Company places more weight on the events and circumstances that most affect the Company's fair value or carrying amount. These factors are all considered by management in reaching its conclusion about whether to perform step one of the impairment test. If the Company elects to bypass the qualitative assessment, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value exceeds its fair value, the Company proceeds to a quantitative approach. There were no impairment charges of the Company's goodwill for the nine months ended September 30, 2026 and 2025, respectively.

Self-Insurance: The Company is self-insured with respect to its facilities in 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 September 30, 2026 and December 31, 2025 of $942,000 and $845,000, respectively. Estimated liabilities for self-insurance are classified as current within accrued other liabilities on the Consolidated Balance Sheets.

Post-Retirement Benefits: Management records an accrual for post-retirement costs associated with the health care plan sponsored by Core Molding Technologies. 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 Core Molding Technologies’ operations. The effect of a change in healthcare costs is described in Note 9, "Post Retirement Benefits", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Core Molding Technologies had a liability for post-retirement healthcare benefits based on actuarial computed estimates of $3,391,000 at September 30, 2026 and $3,287,000 at December 31, 2025.

3. NET INCOME PER SHARE OF COMMON STOCK

Net income per share of common stock is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted net income per share of common stock is computed similarly but includes the effect of the assumed exercise of dilutive restricted stock under the treasury stock method.

The computation of basic and diluted net income per share of common stock (in thousands, except for per share data) is as follows:

4. MAJOR CUSTOMERS

The Company hadfour major customers during the nine months ended September 30, 2026, BRP, Inc. ("BRP"), International Motors, LLC (“International”), PACCAR, Inc. ("PACCAR") and Volvo Group North America, LLC ("Volvo"). Major customers are defined as customers whose revenue individually consist of more than ten percent of the Company's total revenue during any annual or interim reporting period presented. The loss of a significant portion of revenue to these customers could have a material adverse effect on the Company.

The following table presents sales revenue for the above-mentioned customers for the three and nine months ended September 30, 2026 and 2025 (in thousands):

5. INVENTORY

Inventories, net consisted of the following (in thousands):

6. LEASES

The Company has operating leases with fixed payment terms for certain buildings and warehouses. The Company's leases have remaining lease terms of less thanone year toten years, some of which include options to extend the lease forfive years. Operating leases are included in operating lease right-of-use ("ROU") assets, accrued other liabilities and other non-current liabilities in the Consolidated Balance Sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease.

The Company used the applicable incremental borrowing rate at implementation date to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated, the Company will utilize its incremental borrowing rate to perform lease classification tests on lease components and to measure ROU assets and lease liabilities.

The components of lease expense were as follows (in thousands):

Other supplemental balance sheet information related to leases was as follows (in thousands):

(A)Current operating lease liabilities are included inaccrued other liabilities in the Consolidated Balance Sheets.

(B)Noncurrent operating lease liabilities are included in other non-current liabilities in the Consolidated Balance Sheets.

During the nine months ended September 30, 2026, the Company entered into a renewed lease related to the Matamoros production facility, which resulted in a right-of-use asset of $1,260,000 in exchange for new operating lease liabilities.

7. PROPERTY, PLANT & EQUIPMENT

Property, plant and equipment, net consisted of the following for the periods specified (in thousands):

Property, plant, and equipment are recorded at cost, unless obtained through acquisition, then assets are recorded at estimated fair value at the date of acquisition. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The carrying amount of long-lived assets is evaluated annually to determine if an adjustment to the depreciation period or to the unamortized balance is warranted. Depreciation expense for the three months ended September 30, 2026 and 2025 was $2,284,000 and $2,865,000, respectively. Depreciation expense for the nine months ended September 30, 2026 and 2025 was $7,928,000 and $8,722,000, respectively. Amounts invested in capital additions in progress were $27,984,000 at September 30, 2026, which $19,978,000 related to Mexico expansion project. Amounts invested in capital additions in process at December 31, 2025 were $13,549,000, which $6,415,000 related to the Mexico expansion project. At September 30, 2026 and December 31, 2025, purchase commitments for capital expenditures in progress were $7,544,377 and $13,766,000, respectively.

8. GOODWILL AND INTANGIBLES

Goodwill activity for the nine months ended September 30, 2026 consisted of the following (in thousands):

Intangibles, net at September 30, 2026 were comprised of the following (in thousands):

Intangibles, net at December 31, 2025 were comprised of the following (in thousands):

The aggregate intangible asset amortization expense was $228,000 for both the three months ended September 30, 2026 and 2025, respectively. The aggregate intangible amortization expense was $686,000 and $722,000 for the nine months ended September 30, 2026 and 2025, respectively.

9. POST-RETIREMENT BENEFITS

The components of expense for the Company’s post-retirement benefit plans are as follows (in thousands):

The Company made payments of $1,110,000 to pension plans and $94,000 for post-retirement healthcare and life insurance during the nine months ended September 30, 2026. For the remainder of 2026, the Company expects to make approximately$335,000 of pension plan payments, of which $143,000 was accrued at September 30, 2026. The Company also expects to make approximately $46,000 of post-retirement healthcare and life insurance payments for the remainder of 2026, all of which were accrued at September 30, 2026.

10. DEBT

Debt consists of the following (in thousands):

Huntington Credit Agreement

On July 22, 2022, the Company entered into a credit agreement (as amended effective March 7, 2024, December 31, 2025, and July 2, 2026, the "Huntington Credit Agreement") with The Huntington National Bank ("Huntington"), as the sole lender, administrative agent, lead arranger and book runner, and the lenders from time to time thereto. Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured loans (the "Huntington Loans") in the maximum aggregate principal amount of $100,000,000, comprised of two $50,000,000 commitments: a delayed draw term loan commitment and revolving loan commitment.

Under the July 2, 2026 Third Amendment to Credit Agreement (the "Third Amendment"), the Company repaid its existing term loan in full, replaced its capital expenditure loan commitment with the delayed draw loan facility, increased the revolving loan commitment from $25,000,000 to $50,000,000 and extended the maturity date of the facilities from July 22, 2027, to July 2, 2031.

At the option of the Company, the Huntington Loans shall be comprised of Alternative Base Rate (ABR) Loans or Secure Overnight Financing Rate (SOFR) Loans.

ABR Loans bear interest at a per annum rate equal to ABR plus a margin of 225 to 300 basis points determined based on the Company's margin leverage ratio. ABR is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50% per annum and (c) Daily Simple SOFR for such day (taking into account any floor set forth in the definition of "Daily Simple SOFR") plus 1.00% annum; provided, that if ABR shall be less than 0.00%, then ABR shall be deemed to be 0.00%.

SOFR Loans bear interest at a per annum rate equal to Daily Simple SOFR plus a margin of 125 to 200 basis points determined based on the Company’s margin leverage ratio, which is defined as consolidated funded indebtedness less unrestricted cash held with Huntington, divided by consolidated EBITDA for the most recently completed four fiscal quarters. As of the Third Amendment effective date, pricing was set at Level I. Daily Simple SOFR means, for any day (a “SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, the “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website, and (b)0.00%.

The Company’s obligations under the Huntington Credit Agreement are secured by substantially all of its U.S. and Canadian assets, including its equity interests in its U.S. and Canadian subsidiaries and 65% of its equity interests in its Mexican subsidiaries, and are unconditionally guaranteed by certain subsidiaries of the Company.

The Huntington Credit Agreement contains customary affirmative and negative covenants and events of default. The financial covenants require the Company to maintain a covenant leverage ratio not exceeding 3.00 to 1.00 and a fixed charge coverage ratio of at least 1.20 to 1.00. Capital expenditures are limited to $35,000,000 for fiscal 2026 and $30,000,000 for each fiscal year thereafter. As of September 30, 2026, the Company was in compliance with these covenants. Outstanding borrowings may be prepaid without premium or penalty.

Huntington Delayed Draw Loan

Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a secured delayed draw loan commitment (the "Huntington Delayed Draw Loan") in the maximum aggregate principal amount of $50,000,000 of which none was outstanding as of September 30, 2026. Proceeds of the Huntington Delayed Draw Loan shall be used for the consummation of acquisitions permitted under the Huntington Credit Agreement.

Borrowings under the Huntington Delayed Draw Loan convert to term loans on July 1, 2028, July 1, 2029, July 1, 2030 or July 2, 2031, based on the availability period in which the borrowing was drawn. Except for borrowings converting on July 2, 2031, monthly principal installments are payable on the tenth day of each calendar month following the applicable conversion date, based on 0.2% of the principal amount converted during each of the first and second calendar years after conversion,0.4% during each of the third and fourth calendar years, and 0.6% during the fifth calendar year, in each case subject to maturity. Borrowings converting on July 2, 2031 and all remaining outstanding principal are due in full on July 2, 2031.

Huntington Revolving Loan

Pursuant to the terms of the Huntington Credit Agreement, Huntington provides for a revolving loan commitment (the “Huntington Revolving Loan”) in the maximum amount of $50,000,000, under which the Company may borrow at their option at any time during the five-year period following the closing of the Third Amendment (July 2, 2031). As of September 30, 2026, $4,810,000 million was outstanding and $45,190,000 was available under the revolving loan facility. No revolving loan borrowings were outstanding as of December 31, 2025. The revolving loan commitment terminates, and all outstanding borrowings thereunder must be repaid, on July 2, 2031.

The interest rate for the Huntington Revolving Loan was 5.15% and 5.46% as of September 30, 2026, and December 31, 2025, respectively.

11. INCOME TAXES

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 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.

At September 30, 2026 and 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 September 30, 2026, the Company had a valuation allowance of $1,327,000, against deferred tax assets related to local (city) jurisdiction tax positions, 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 net 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.

Income tax expense for the nine months ended September 30, 2026 is estimated to be $914,000, approximately 19.0% of income before income taxes. Income tax expense for the nine months ended September 30, 2025 was estimated to be $2,840,000, approximately 25.9% of income before income taxes.

The Company files income tax returns in the United States, Mexico, Canada and various state and local jurisdictions. The Company is not subject to United States federal income tax examinations for years before 2021. The Company is not subject to state income tax examinations for years before 2021. The Company is not subject to Mexican income tax examinations for years before 2019 and is not subject to Canadian income tax examinations for years before 2020.

12. STOCK BASED COMPENSATION

On May 13, 2021, the Company’s stockholders approved the 2021 Long Term Equity Incentive Plan and approved amendments on May 16, 2024, May 15, 2025 and May 14, 2026 (as amended, the "2021 Plan"). The 2021 Plan allows for grants to employees, officers, non-employee directors, consultants, independent contractors and advisors of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards (“stock awards”) up to an aggregate of 1,954,823 shares for issuance. At September 30, 2026,944,854 shares of common stock were available for issuance under the 2021 Plan. Awards can be granted under the 2021 Plan through the earlier of May 13, 2031, or the date the maximum number of available shares under the 2021 Plan have been granted.

Awards under the 2021 Plan vest overone tothree years. Shares granted under the 2021 Plans vest immediately upon the date of a participant’s death, disability or change in control.

The Company follows the provisions of FASB ASC 718 requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity award).

During the nine months ended September 30, 2026 employees withheld 31,907 shares of the Company's common stock to satisfy income withholding obligations in connection with the vesting of restricted stock awards, and in the same period in 2025 the Company withheld 40,953 shares.

Restricted Stock

The Company grants shares of its common stock to certain directors, officers, key managers and employees in the form of unvested stock and units (“Restricted Stock”). These awards are measured at the fair value of the Company's common stock on the date of issuance and recognized ratably as compensation expense over the applicable vesting period, which is typically three years. The Company adjusts compensation expense for actual forfeitures, as they occur.

The following summarizes the status of Restricted Stock and changes during the nine months ended September 30, 2026:

At September 30, 2026 and 2025, there was $2,366,000 and $1,937,000, respectively, of total unrecognized compensation expense, related to Restricted Stock grants. The unrecognized compensation expense at September 30, 2026 is expected to be recognized over the weighted-average period of 2.3 years. Total compensation cost related to Restricted Stock grants for the three months ended September 30, 2026 and 2025 was $443,000 and $400,000, respectively. Total compensation cost related to Restricted Stock grants for the nine months ended September 30, 2026 and 2025 was $1,306,000 and $1,387,000, respectively, all of which was recorded to selling, general and administrative expense.

Performance Restricted Stock Awards

The Company grants shares of its common stock to certain officers and key managers in the form of shares of performance-based restricted stock ("Performance Restricted Stock Awards"). These awards are measured at the fair value of the Company's common stock on the date of issuance and recognized ratably as compensation expense over the applicable vesting period to the extent that the performance measures have been satisfied as of the last day of the performance period of the award. The total amount payable as of the award's vesting date is determined by the three year average Operational Income and Return on Capital Employed performance measure achievement. The Company adjusts compensation expense for actual forfeitures as they occur, and for estimated performance measure achievement.

The following summarizes the status of Performance Restricted Stock Awards and changes during the nine months ended September 30, 2026:

At September 30, 2026 and 2025, there was $731,000 and $931,000 of total unrecognized compensation expense related to Performance Restricted Stock Awards, respectively. The unrecognized compensation expense at September 30, 2026 is expected to be recognized over the weighted-average period of 2.2 years. Total compensation cost related to Performance Restricted Stock Awards for the three months ended September 30, 2026 and 2025 was $84,000 and $121,000, respectively. Total compensation cost related to Performance Restricted Stock grants for the nine months ended September 30, 2026 and 2025 was $217,000 and $259,000, respectively, all of which was recorded to selling, general and administrative expense.

Due to award modification as a part of the Executive Transition announced on August 1, 2025, the Company reclassified 28,744 restricted stock awards and 29,704 performance restricted stock awards to liability-classified awards. This reclassification reduced Paid-in Capital by $45,000 for the years ended December 31, 2025. These awards are measured at the fair value of the Company’s common stock on the modification date and are marked to market at each reporting period. Compensation expense is recognized over the service period often months which concluded on May 31, 2026.

13. LONG TERM INCENTIVE COMPENSATION

The Company grants phantom stock ("Phantom Stock Awards") to key employees under the 2021 Plan. These Phantom Stock Awards are measured based on the fair value of the Company's common stock on the vesting date and are marked to market at each reporting period. Compensation expense is recognized over the applicable vesting period, typically three years, and is adjusted for actual forfeitures as they occur.

At September 30, 2026 there was $944,000 of total unrecognized compensation expense related to Phantom Stock Awards. At September 30, 2025 there was $688,000 unrecognized compensation expense related to Phantom Stock Awards. The unrecognized compensation expense at September 30, 2026 is expected to be recognized over the weighted-average period of 2.4 years. Total compensation cost related to Phantom Stock Awards for the three months ended September 30, 2026 and 2025 was $97,000 and $72,000, respectively. Total compensation cost related to Phantom Stock Awards for the nine months ended September 30, 2026 and 2025 was $240,000 and $136,000, respectively, all of which was recorded to selling, general and administrative expense.

14. STOCK REPURCHASE PLAN

On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. On March 11, 2026, the Company announced that its Board of Directors approved an increase to the program, authorizing the repurchase of up to an additional approximately $6,500,000 of its outstanding common stock. As of September 30, 2026, the Company is authorized to repurchase $7,239,000 of its stocks. Repurchases of shares of common stock under the stock repurchase program are made in the open market and in accordance with applicable securities laws. Repurchases of shares of common stock under the stock repurchase program are made in the open market and in accordance with applicable securities laws. The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company’s discretion. There were 8,411 shares repurchased under the repurchase program during the three months ended September 30, 2026. There were 32,956 shares repurchased under the repurchase program during the nine months ended September 30, 2026, totaling $648,000.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This hierarchical valuation methodology provides a fair value framework that describes the categorization of assets and liabilities in three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment.

The three levels are defined as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities.

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

Level 3 -Significant unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, interest rate swaps and foreign currency derivatives. Cash and cash equivalents, accounts receivable and accounts payable carrying values as of September 30, 2026 and December 31, 2025 approximate fair value due to the short-term maturities of these financial instruments. As of September 30, 2026 did not have an outstanding term loan. As of December 31, 2025, the carrying amounts of the Huntington Term Loan approximated fair value due to the short-term nature of the underlying variable rate

SOFR used to determine interest charged on the loans. The Company had Level 2 fair value measurements at September 30, 2026 relating to the Company’s foreign currency derivatives.

Derivative and hedging activities

Foreign Currency Derivatives

The Company conducted business in foreign countries and paid certain expenses in foreign currencies; therefore, the Company was exposed to foreign currency exchange risk between the U.S. Dollar and foreign currencies, which could impact the Company’s operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company entered into forward contracts to exchange a fixed amount of U.S. Dollars for a fixed amount of foreign currency, which will be used to fund future foreign currency cash flows. At inception, all forward contracts are formally documented as cash flow hedges and are measured at fair value each reporting period.

Derivatives are formally assessed both at inception and at least quarterly thereafter, to ensure that derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item. If it is determined that a derivative ceases to be a highly effective hedge, or if the anticipated transaction is no longer probable of occurring, hedge accounting is discontinued, and any future mark-to-market adjustments are recognized in earnings. The effective portion of gain or loss is reported in other comprehensive income and the ineffective portion is reported in earnings. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in the foreign currency. As of September 30, 2026, the Company had no ineffective portion related to the cash flow hedges. The notional contract value of foreign currency derivatives was $68,825,000 and $66,856,000 as of September 30, 2026 and December 31, 2025, respectively.

Interest Rate Swap

The Company previously entered into an interest rate swap contract to fix the interest rate on an initial aggregate amount of $25,000,000 thereby reducing exposure to interest rate changes. The interest rate swap pays a fixed rate of 2.95% to the swap counterparty in exchange for daily SOFR. At inception, all interest rate swaps were formally documented as cash flow hedges and are measured at fair value each reporting period. The company terminated the interest rate swap as of July 2026 with the repayment of the loan. See Note 10, "Debt", for additional information. The notional contract value of the interest rate swap was $0 and $19,843,000 as of September 30, 2026 and December 31, 2025, respectively.

Financial statement impacts

The following table detail amounts related to our derivatives designated as hedging instruments (in thousands):

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income ("AOCI") for the three months ended September 30, 2026 and 2025 (in thousands):

The following tables summarize the amount of unrealized and realized gain (loss) recognized in AOCI for the nine months ended September 30, 2026 and 2025 (in thousands):

(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

16. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents changes in AOCI, net of tax, for the nine months ended September 30, 2026 and 2025 (in thousands):

(A)The effect of post-retirement benefit items reclassified from AOCI is included in other income and expense on the Consolidated Statements of Operations. These AOCI components are included in the computation of net periodic benefit cost (see Note 9, "Post-Retirement Benefits" for additional details). The tax effect of post-retirement benefit items reclassified from AOCI is included in income tax expense on the Consolidated Statements of Operations.

17. SEGMENT REPORTING

Segment information is prepared on the same basis that our Chief Executive Officer ("CEO"), who serves as our Chief Operating Decision Maker ("CODM"), manages our business, evaluates financial results, and makes key operating decisions. The North America reportable operating segment comprises all manufacturing operations located in the United States, Canada, and Mexico, which we have aggregated into a single reportable operating segment, North America, in consideration of the aggregation criteria set forth in ASC 280. These operations share similar economic characteristics, production processes, and customer bases. The North America reportable segment generates its revenue primarily from the manufacturing and sale of sheet molding compound and molded structural plastic products to customers in the heavy truck, power sports, building products and industrial markets. Our CODM uses income from operations to evaluate performance and make key operating decisions, such as allocating resources and assessing growth opportunities within the North America segment. The CODM is not provided asset information by reportable segment, as asset information is reviewed on a consolidated basis.

The following tables present selected financial information with respect to our single reporting segment for the three and nine months ended September 30, 2026 and 2025 (in thousands):