Core Molding Technologies Inc · AMEX:CMT
Core Molding Technologies — Investor Presentation (September 2017)
30 slides from Core Molding Technologies's investor presentation, Sep 1, 2017
Slide 1: Investor Presentation September 2017
CREATIVE • RELIABLE • COMPOSITES INVESTOR PRESENTATION SEPTEMBER 2017
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURERS This presentation, our remarks, and answers to questions contain historical information and forward-looking statements within the meaning of the federal securities laws. As a general matter, forward-looking statements are those focused upon
Slide 3: Company Overview
COMPANY OVERVIEW • NYSE American: CMT • Headquarters: Columbus, OH • Over 1M square feet of manufacturing space in the US & Mexico • Incorporated: 1996 • Employees: ~ 1,250 • Market cap*: $157.4M • Shares outstanding: 7.9M • TTM (6/30/17) revenues of $174.5M, EBITDA of $16.9M**, and net income of $6
Slide 4: Strong Financial Metrics and Growth Potential
STRONG FINANCIAL METRICS AND GROWTH POTENTIAL INCREASED PRODUCT REVENUE expected beginning in 2018 as a result of anticipated rebound in truck market NEW PROGRAMS expected to provide incremental revenues beginning in 2018 and 2019 Improved operational effectiveness through ongoing CONTINUOUS IMPROVE
Slide 5: Composites - A Large and Growing Industry in the US
COMPOSITES - A LARGE AND GROWING INDUSTRY IN THE US FORECAST TO GROW AT 4.9% CAGR THROUGH 2022 CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 5 KEY INDUSTRY TRENDS: • Growth being driven by: 1. PERFORMANCE DEMANDS 2. COST REDUCTION 3. LIGHTWEIGHTING $8.0B INDUSTRY / 3.7% Growth in 2016 EXP
Slide 6: Markets We Serve
MARKETS WE SERVE CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 6 TRUCK Manufacturers of heavy- and medium-duty trucks and buses built on truck platforms MARINE Applications related to boating and personal watercraft AUTOMOTIVE Manufacturers of light passenger vehicles and their Tier 1 and
Slide 7: High Quality, Long-Term Customer Base
Truck 68% Marine 19% Auto 9% Other 4% HIGH QUALITY, LONG-TERM CUSTOMER BASE CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 7 Largest industry concentration reduced from 91% to 68% Largest customer concentration reduced from 45% to 27% YEARS OF SERVICE 20 YEARS 20 YEARS 18 YEARS 16 YEARS 16
Slide 8: Multi-Year Visibility on Truck Programs
MULTI-YEAR VISIBILITY ON TRUCK PROGRAMS • Time of award to production typically 1-3 years with tooling completed during this period • Once launched, production on a program lasts 5-20 years with service extending many years thereafter • Programs are generally sole-sourced to one supplier due to cost
Slide 9: A Dominant Supplier to Truck Market
A DOMINANT SUPPLIER TO TRUCK MARKET • 35% market share for heavy duty truck (1) • 7 truck brand customers • Multiple models with each customer • Long-standing customer relationships • Major programs extend for multiple years CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 9 Navistar [VALUE]
Slide 10: Favorable Heavy Truck Market Dynamics
FAVORABLE HEAVY TRUCK MARKET DYNAMICS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 10 FOUR LARGE OEMS All are Core customers CYCLICAL INDUSTRY- BUILDS HAVE HISTORICALLY INCREASED EACH CYCLE 5-7 year business cycles LONG MODEL LIFE CYCLES 5-20 years STEADY REPLACEMENT DEMAND Fleets operat
Slide 11: Management Team Experienced in Navigating the Cyclical Truck Market
MANAGEMENT TEAM EXPERIENCED IN NAVIGATING THE CYCLICAL TRUCK MARKET CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 11 • Experienced management team with deep understanding of truck cyclicality • Demonstrated capability of managing through truck cycles • Industry diversification has lessene
Slide 12: Custom Manufacturer of Molded Plastic Parts
CUSTOM MANUFACTURER OF MOLDED PLASTIC PARTS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 12 Part / Tooling / Material Design Tooling Program Management / Launch Material Manufacturing Part Manufacturing (Molding, etc.) Coating / Priming Assembly Line Sequencing / Shipping
Slide 13: Product Expertise
PRODUCT EXPERTISE • Core manufactures large molded parts for original equipment manufacturers (OEMs) • We specialize in combining multiple moldings and hardware to produce complex assemblies CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 13 Sleeper roofs Air deflectors Visors Hoods Fender
Slide 14: Process Expertise
PROCESS EXPERTISE • A full range of composite processes to meet individual customer needs, production volume requirements and cost objectives • Assemblies with components individually customized by process • Core develops and manufactures custom formulations and specialized materials for demanding a
Slide 15: Materials Expertise
MATERIALS EXPERTISE • Skilled at developing custom materials to meet specific customer performance requirements • Fully-resourced with on-staff materials scientists and external cooperative development partnerships • Lightweighting sheet molding compound (SMC) formulations demanded by the transporta
Slide 16: Strategically Located Facilities with Ability to Grow
STRATEGICALLY LOCATED FACILITIES WITH ABILITY TO GROW • Proximity to current customers • Well situated to reach targeted customers in our growth markets • Production cost benefit from Mexico-based operations • High barriers to entry • Double-digit average return on invested capital Core plants Autom
Slide 17: Disciplined Acquisition Strategy
Recent Successful Acquisition: • Acquired CPI Binani on 3/20/15 for $15 million • Adds existing programs with industry-leading customers in marine, automotive, packaging, and other industries • Expands thermoplastics capabilities with addition of direct long-fiber thermoplastics (D-LFT) products • F
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 18 Historical Net Sales (in millions) Historical EPS* 2016 Results Commentary: $1.11 $0.92 $1.28 $1.58 $0.97 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2012 2013 2014 2015 2016 $162.5 $144.1 $175.2 $199.1 $17
Slide 19: Consistent Profitability
CONSISTENT PROFITABILITY CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 19 Historical Gross Margins Historical EBITDA* Margins Recent Results Commentary: • Solid gross margin for 2016 despite decline in product sales • Operating costs predominantly variable, allowing management to scale ex
Slide 20: Significant Investment in Infrastructure
SIGNIFICANT INVESTMENT IN INFRASTRUCTURE • Over $37 million of capital additions over past five years • Significant infrastructure in place to support future business • Required infrastructure for the business creates a barrier to entry • Sustaining capex over past five years of approximately 1% of
Slide 21: Strong Financial Position
STRONG FINANCIAL POSITION Conservative Balance Sheet Five Year Total FCF = $40.3 million Debt to Equity Ratio of 10% Access to Capital Markets CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 21 • Pursue additional tuck-in and more transformative acquisitions • Reinvest in existing operation
Slide 22: Robust Long-Term Growth Outlook
ROBUST LONG-TERM GROWTH OUTLOOK • Truck builds expected to rebound after pause in 2016 to more than 298k class 8 units by 2020(1) • Increasing presence in non-truck markets • Composite industry growing faster than overall economy • Securing business with new and existing customers • Strategic M&A op
Slide 23: Long Term Strategic Objectives
LONG TERM STRATEGIC OBJECTIVES CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 23 • Continue diversification of industry and customer base to reduce effect of truck cycles • Increase process and material offerings in order to provide customers with a broad range of solutions • Best in class
Slide 24: Investment Highlights
INVESTMENT HIGHLIGHTS • Extensive process expertise in large & growing industry • A dominant supplier in principal end market • Multi-year programs and high barriers to entry • Wide range of service offerings providing customers with multiple alternatives • Multiple pathways to growth resulting from
Slide 25: Contact
CONTACT Company Representative Core Molding Technologies CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 25 Corporate Offices Core Molding Technologies 800 Manor Park Drive Columbus, OH 43228 Investor Relations Advisors The Equity Group Inc. Fred Buonocore, CFA Senior Vice President 212-836
Slide 26: Appendix
APPENDIX CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 26
Slide 27: Management Team
MANAGEMENT TEAM CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 27 Kevin Barnett – President & CEO – 20 Years with Core Molding Technologies • Joined Core in 1997 as CFO, Vice President, Secretary and Treasurer • Held Vice President Columbus Operations, Vice President Business Development a
Slide 28: Non-GAAP Measures and Last Truck Cycle Financial Metrics
CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 28 The Company believes that supplementing its financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP) with certain non-GAAP financial measures, as defined by the Securities and Exchange
Slide 29: EBITDA Reconciliation
EBITDA RECONCILIATION CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 29 ($000's) Twelve Months Ended 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 TTM 6/30/2017 Net Income $3,726 $5,643 $1,108 $2,433 $10,526 $8,190 $6,866 $9,634 $12,050 $7,411 $6
Slide 30: Free Cash Flows Reconciliation
FREE CASH FLOWS RECONCILIATION CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 30 ($000's) Twelve Months Ended 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 Operating Cash Flow $14,798 $6,917 $10,827 $18,615 $26,069 (-) Purchase of property, plant and equipment (8,258) (9,332) (10,679) (5,68
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