Core Molding Technologies Inc · AMEX:CMT
Core Molding Technologies — EF Hutton Investor Conference May 2023
27 slides from Core Molding Technologies's conference presentation, May 4, 2023
Slide 1: EF Hutton Investor Conference May 2023
EF HUTTON INVESTOR CONFERENCE May 2023
Slide 2: Safe Harbor Statements and Non-GAAP Financial Measures
SAFE HARBOR STATEMENTS AND NON-GAAP FINANCIAL MEASURES 2 Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the federal securities laws, which are subject to the "safe harbor" created by Section 27A of the Securities Act of 1933, as amen
Slide 3: Core Molding Technologies
US 36% Canada 26% Mexico 38% CORE MOLDING TECHNOLOGIES The most reliable, innovative and responsive partner in engineered materials and manufacturing solutions: SOLUTION | INNOVATION | MANUFACTURING Diversified Portfolio with Long Term Customer Relationships Building Products Industrial & Utilities
Slide 4: Market Leadership Position
Market Leadership Position Innovative solutions - durable, light weight, corrosion-resistant & sustainable Broad North American footprint in United States, Mexico & Canada Few competitors, high barriers to entry Large Addressable Market Addressable market >$10B Expansion in diverse industries, custo
Slide 5: >$10B Addressable Market
> $10B ADDRESSABLE MARKET • Grow wallet share with large customers • Multiple industry channel expansion $2.6B Grow • Market leader in truck & powersports • Focus on higher value solutions Based on management estimates with current process portfolio. Industry Dynamics $2.3B Grow $1.9B Grow $1.9B Gro
Slide 6: Large North American Manufacturing Footprint
LARGE NORTH AMERICAN MANUFACTURING FOOTPRINT *Based on 2022 Product Sales 26% 31% 19% 11% 6% 7% Columbus, OH Matamoros, MX Cobourg, Ontario Winona, MN Gaffney, SC Monterrey, MX 80 presses >1.3M Square Feet Product Sales by Facility* 6
Slide 7: Industry and Customer Diversification
INDUSTRY AND CUSTOMER DIVERSIFICATION 44% Truck 24% Power Sports 11% Building Products 8% Industrial & Utilities 13% Other 2022 Net Product Sales By Industry Truck Powersport Building Products Industrial and UtilitiesLong-term relationships with blue-chip companies providing single-source manufactur
Slide 8: How We Diversify
HOW WE DIVERSIFY 8 Building Products Industrial & Utilities Power Sports Transportation Light Weighting | Durability | Cost Savings | Corrosion Resistance | Parts Consolidation | Recyclability
Slide 9: Industry Leader with Few Competitors
INDUSTRY LEADER WITH FEW COMPETITORS Thermoset ProcessesThermoplastic Processes Hand Layup Spray Up Primary competitors are single-plant facilities Core operations in Mexico due to heavy labor content SF/SW (Structural Foam or Web Molding) One large competitor & a few small single-facility competito
Slide 10: Four Strategic Growth Initiatives
Organic and Acquisition, New Industries, Deeper Penetration with Existing Customers Revenue Growth FOUR STRATEGIC GROWTH INITIATIVES 10 Unique, High Value Solutions = Higher Margins Technical Solution Sales Operational Excellence, Continuous Improvement Culture Profitability Improvements Reinvestmen
Slide 11: Macro Tailwinds from the Infrastructure Investment and Jobs Act
Water Systems $62B Investment Roads, Bridges & Major Projects MACRO TAILWINDS FROM THE INFRASTRUCTURE INVESTMENT AND JOBS ACT 11 Broadband $110B Investment $65B Investment
Slide 12: Sustainability
SUSTAINABILITY The Company is committed to sustainable operational excellence that drives long-term value creation, positive corporate citizenship and sustainable solutions for our customers Internal 30x30 environmental strategy – reduce energy, greenhouse gas emissions and waste 30% by 2030 Custome
Slide 13: Growth by Acquisition
• New Core Competencies or Materials • Press Capacity Expansion • Added Material Systems or Processes • Geographic Expansions GROWTH BY ACQUISITION • New Customers • New Industries Priorities Over 50% of 2022 revenues came from processes & materials acquired since 2015 From 2015 To 2022 100% Thermos
Slide 14: Technical Solution Sales
TECHNICAL SOLUTION SALES Conversion Expertise for Railway Data Transmission Trough Concrete Parts Consolidation for Truck Sideboard (step rail) DLFT Hull DLFT + Structural FoamSMC Hull Integrated Material Development & Advanced Manufacturing Engineering for PWCs Structural Foam 48 pcs 1 pc Customer
Slide 15: Manufacturing Excellence
Excellence drives long term targets in range of 17-19% gross margins MANUFACTURING EXCELLENCE 15 Continuous Improvement in All PlantsImprovements in Underperforming Plants Must Win Battle Major productivity improvements Quality improvements / Scrap reductions New product launch improvements Employee
Slide 16: Leveraging Existing Strengths
LEVERAGING EXISTING STRENGTHS 16 Deep Expertise Diverse Products & Processes Strategic Footprint • 40 years of leadership in structural plastics manufacturing • 20 years manufacturing in Mexico • Long standing customers and relationships • Large press expertise • Sole-source provider • Most diverse
Slide 17: Vision-Driven, Experienced Management Team
VISION-DRIVEN, EXPERIENCED MANAGEMENT TEAM 17 Chris Highfield Executive VP of Sales Past Companies American Trim Renee Anderson Executive VP of Human Resources Past Companies Draxlmaier, Danfoss Eric Palomaki Executive VP of Operations, R&D Past Companies Acuity Brands, North American, Lighting TRW
Slide 18: Financials
FINANCIALS 18
Slide 19: Long Term Financial Goals
LONG TERM FINANCIAL GOALS Revenues Operating Income Return on Capital Employed Current 3 – 5 Years $377MM 4.8% 12.7% >$500MM • Organic growth • Acquisitions • Further industry diversification 8%-10% • Operational improvements • Value selling • Leverage fixed costs 14%-16% • Brick and mortar addition
Slide 20: Selected Financial Information
SELECTED FINANCIAL INFORMATION 20 Trailing two years of new record sales Margin impacted by inflation and raw material recoveries starting in 2021 Margins building in 2022 as Company recovers raw material costs 2022 net income includes ~ $2.4m of tax NOL benefit, $0.28 per share Two-year CAGR of 18.
Slide 21: Selected Financial Information
SELECTED FINANCIAL INFORMATION 21 • 2023 focus to improve profitability • Sales growth from new customers, existing customers and price increases • EBITDA % of sales improvement steady at ~ 8.5% • Return on Capital Employed (ROCE) improvement in excess of 400bps – efficient use of capital 222 308 37
Slide 22: Capitalization
CAPITALIZATION 22 $25.0 Revolver $25.0 Term Loan $25.0 Capex Facility Debt Facility (in millions) • Term Loan Interest rate fixed at 4.95% • Minimal annual debt service requirements (~$1.2mm in 2023) • $25 million Capital expenditure facility for future expansion projects
Slide 23: Cash Flows and Reinvestment
CASH FLOWS AND REINVESTMENT 23 Three Year Summary in millions Operating Cash Flows Sustaining Capex Growth Capex Free Cash Flows Free Cash Flows Excluding Growth Capex 2020 28.2$ 1.3$ 2.4$ 24.5$ 26.9$ 2021 12.5$ 6.3$ 5.1$ 1.1$ 6.2$ 2022 19.0$ 7.8$ 8.8$ 2.4$ 11.2$ Total 59.7$ 15.4$ 16.3$ 28.0$ 44.3$
Slide 24: Contacts
CONTACTS 24 Company Contact John Zimmer Chief Financial Officer 614.870.5604 Investor Contact Sandy Martin / Steven Hooser Three Part Advisors 214.616.2207
Slide 25: Appendix
APPENDIX 25
Slide 26: Net Income (Loss) to Adjusted EBITDA Reconciliation
NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION (1) Reflects Cincinnati facility closing. Reconciliation of GAAP to Non-GAAP Financial Measures * Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (
Slide 27: Year-End and Return on Capital Employed Reconciliation
in thousands 2022 2021 2020 EBIT 18,003$ 11,068$ 10,390$ Plant Closure Costs(1) - 2,581 - Adjusted EBIT 18,003$ 13,649$ 10,390$ Shareholders' Equity 116,125$ 100,095$ 93,932$ Debt Short Term portion of Term Debt 1,208 3,943 2,535 Long Term portion of Term Debt 22,986 21,251 25,198 Revolver 1,864 4,4
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