Core Molding Technologies Inc · AMEX:CMT
Core Molding Technologies — Roth Conference 2024
27 slides from Core Molding Technologies's conference presentation, Mar 15, 2024
Slide 1: Roth Conference March 2024
ROTH CONFERENCE March 2024
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 44% Canada 16% Mexico 40% 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: Investment Highlights
✓ Market Leadership Position ✓ Few competitors, high barriers to entry ✓ Large Addressable Market ✓ Long-term relationships with blue-chip companies ✓ Proprietary, Highly-Engineered Products ✓ Single source, technical solutions of structural systems ✓ Product innovation expertise with product design
Slide 5: Over $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 16.0% 33.0% 23.0% 15.0% 6.0% 7.0% Columbus, OH Matamoros, MX Cobourg, Ontario Winona, MN Gaffney, SC Monterrey, MX 82 presses >1.3M Square Feet Product Sales by Facility* *Based on 2023 Product Sales 6
Slide 7: Industry and Customer Diversification
INDUSTRY AND CUSTOMER DIVERSIFICATION 52% Truck 24% Power Sports 8% Building Products 16% Industrial, Utilities & Other 2023 Net Product Sales By Industry Truck Powersport Building Products Industrial and UtilitiesLong-term relationships with blue-chip companies providing single-source manufacturing
Slide 8: Thermoset and Thermoplastic Processes and Competitors
8 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 competitors Material blending and large pres
Slide 9: How We Diversify
HOW WE DIVERSIFY 9 Building Products Industrial & Utilities Power Sports Transportation Light Weighting | Durability | Cost Savings | Corrosion Resistance | Parts Consolidation | Recyclability
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 Infrastructure (Roads, Bridges) MACRO TAILWINDS FROM THE INFRASTRUCTURE INVESTMENT AND JOBS ACT 11 Broadband $110B Investment $65B Investment
Slide 12: Integrated Materials and Processes from One Supplier
INTEGRATED MATERIALS AND PROCESSES FROM ONE SUPPLIER 12 High Strength to Weight • High performance vs cost = Value • Durability and corrosion resistance Innovative Material & Process Development • Large format / One-piece design • Design Flexibility • Value Added Features Lightweight = Lower Total C
Slide 13: Light Weighting
LIGHT WEIGHTING 13 Multiple Benefits from Lightweight Parts: ✓ Easier installation ✓ Reduced Labor ✓ Improved Employee Safety / Reduced Injuries / OSHA ✓ On site modifications ✓ Reduced need for onsite installation equipment ✓ Saves 80% CO2 emissions vs concrete equivalent ✓ Lower overall cost Polym
Slide 14: Part Consolidation / Solutions
PART CONSOLIDATION / SOLUTIONS 14 Multiple Benefits from a Solution with Part Consolidation: ✓ Unique Solutions creating an optimized design ✓ Simplified assembly / Reduced Labor for the customer ✓ Integrated with the customer development (Early in the development process) ✓ Unique capability to cre
Slide 15: Growth by Acquisition
Footprint Expansion Added Material Systems or Processes GROWTH BY ACQUISITION New Customers and Industries Priorities Transitioned Company to new industries, customers, processes and materials From 2015 To 2023 100% Thermosets 65% Thermosets and 35% Thermoplastics 4 processes 6 processes, plus autom
Slide 16: Manufacturing Excellence
Operational excellence drives long term targets in range of 17-19% gross margins MANUFACTURING EXCELLENCE 16 Continuous Improvement in All PlantsOngoing Improvements Labor productivity improvements Overhead cost reductions Quality improvements / Scrap reductions New product launch improvements Emplo
Slide 17: Financials
17 FINANCIALS
Slide 18: Selected Financial Information
SELECTED FINANCIAL INFORMATION 18 Increasing EBITDA provides catalyst for free cash flow growth Record 2023 net income and EPS Diverse industries and customers with long-term sales growth potential Margin improvement resulting from operational improvements and portfolio optimization Controlled fixed
Slide 19: Selected Financial Information
SELECTED FINANCIAL INFORMATION 19 • Sales since reopening from COVID increased 61% • Company focus on operational improvements and portfolio profitability driving higher earnings • Adjusted EBITDA as % of sales increased to 11.8% • Disciplined capital deployment approach resulting in increased ROCE
Slide 20: Cash Flows and Reinvestment
in millions Operating Cash Flows Sustaining Capex Growth Capex Free Cash Flows Free Cash Flows Excluding Growth Capex 2021 12.5$ 6.3$ 5.1$ 1.1$ 6.2$ 2022 19.0$ 7.8$ 8.8$ 2.4$ 11.2$ 2023 34.8$ 6.1$ 3.0$ 25.7$ 28.7$ Total 66.3$ 20.2$ 16.9$ 29.2$ 46.1$ 3 Year Avg. 22.1$ 6.7$ 5.6$ 9.7$ 15.4$ CASH FLOWS
Slide 21: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY 21 Organic Growth • Capital investments meeting Company’s return requirements • Projected capital spend in 2024 of $13mm • R&D spending M&A • Tuck in acquisitions • Valuations of $10 - $40 million • One to two acquisitions a year • Disciplined evaluation process to identi
Slide 22: Long Term Financial Goals
LONG TERM FINANCIAL GOALS Revenues Operating Income Return on Capital Employed December 2023 3 – 5 Years $358MM 7.4% 16.4% >$500MM • Organic growth • Acquisitions • Further industry diversification 8%-10% • Operational improvements • Value selling • Leverage fixed costs 14%-16% • Investment in capac
Slide 23: Contacts
CONTACTS 23 Company Contact John Zimmer Chief Financial Officer jzimmer@coremt.com Investor Contact Sandy Martin / Steven Hooser Three Part Advisors 214.616.2207
Slide 24: Appendix
APPENDIX 24
Slide 25: Net Income to Adjusted EBITDA Reconciliation
NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION (1) Includes net interest expense, non-cash periodic post retirement costs and loss on extinguishment of debt. (2) Reflects Cincinnati facility closing. Reconciliation of GAAP to Non-GAAP Financial Measures * Adjusted EBITDA represents net income b
Slide 26: Year-End and ROCE Reconciliation
YEAR-END AND RETURN ON CAPITAL EMPLOYED (“ROCE”) RECONCILIATION 26 . Reconciliation of GAAP to Non-GAAP Financial Measures * Return on Capital Employed represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) restructu
Slide 27: Capitalization
in millions As of Dec 31, 2023 Equity 139.0$ Total Debt 23.0$ Capital Deployed 162.0$ Cash on Hand 24.1$ Lines of Credit Availability 50.0$ 74.1$ Debt Leverage Ratio 0.54 CAPITALIZATION 27 $25.0 Revolver $25.0 Term Loan $25.0 Capex Facility Debt Facility (in millions) • Term Loan Interest rate fixed