Slide 1: Creative • Reliable • Composites Investor Presentation April 2016
CREATIVE • RELIABLE • COMPOSITES INVESTOR PRESENTATION APRIL 2016
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 MKT: CMT • Headquarters: Columbus, OH • Over 1M square feet of manufacturing space in the US & Mexico • Incorporated: 1996 • Employees: ~ 1,500 • Market cap*: $87M • Shares outstanding: 7.6M • TTM (12/31/15) revenues of $199M, EBITDA of $24.5M, and net income of $12M • TTM P/
Slide 4: Strong Financial Metrics and Growth Potential
STRONG FINANCIAL METRICS AND GROWTH POTENTIAL RECORD SALES AND EPS in 2015 STABLE GROSS MARGINS across truck cycles NEW PROGRAMS starting in 2016 expected to partially offset anticipated downcycle in truck market March 2015 acquisition BROADENED PRODUCT OFFERING & MARKETS STRONG BALANCE SHEET WITH F
Slide 5: Composites - A Large and Growing Industry in the US
COMPOSITES - A LARGE AND GROWING INDUSTRY IN THE US FORECAST TO GROW AT 5.1% CAGR THROUGH 2021 CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 5 KEY INDUSTRY TRENDS: • Growth being driven by: 1. PERFORMANCE DEMANDS 2. COST REDUCTION 3. LIGHTWEIGHTING $7.5B INDUSTRY / 5.6% Growth in 2015 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
HIGH QUALITY, LONG-TERM CUSTOMER BASE CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 7 Largest industry concentration reduced from 91% to 78% Largest customer concentration reduced from 45% to 28% YEARS OF SERVICE 19 YEARS 19 YEARS 17 YEARS 15 YEARS 15 YEARS Navistar [VALUE] PACCAR [VALUE]
Slide 8: A Dominant Supplier to Heavy Truck Market
A DOMINANT SUPPLIER TO HEAVY TRUCK MARKET • 35% market share for heavy duty truck (1) • 7 truck brand customers • Long-standing customer relationships • Major programs extend for multiple years CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 8 Navistar [VALUE] Volvo [VALUE] PACCAR [VALUE] D
Slide 9: Truck Programs Provide Multi-Year Visibility
TRUCK PROGRAMS PROVIDE MULTI- YEAR VISIBILITY • Length of a program/platform generally extends 5-20 years • Programs are generally sole-sourced to one supplier due to cost of tooling • OEMs may make product modifications during the program lifecycle to meet new requirements • OEMs generally do not s
Slide 10: Content Across Broad Range of Truck Models
CONTENT ACROSS BROAD RANGE OF TRUCK MODELS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 10 11 Models 13 Models 5 Models 8 Models
Slide 11: Favorable Heavy Truck Market Dynamics
FAVORABLE HEAVY TRUCK MARKET DYNAMICS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 11 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 12: Management Team Experienced in Navigating the Cyclical Truck Market
MANAGEMENT TEAM EXPERIENCED IN NAVIGATING THE CYCLICAL TRUCK MARKET CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 12 • Experienced management team with deep understanding of truck cyclicality • Demonstrated capability of managing through truck cycles • Industry diversification has lessene
Slide 13: Core Meets Specialized Customer Requirements
CORE MEETS SPECIALIZED CUSTOMER REQUIREMENTS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 13 PERFORMANCE DEMANDS COST REDUCTION LIGHTWEIGHTING • Composites often less expensive than metal alternatives • Ability to form composites into geometric shapes that allow for part consolidation •
Slide 14: 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 // 14 Sleeper roofs Air deflectors Visors Hoods Fender
Slide 15: 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 16: 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 17: 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 return on invested capital Core plants Automotive cu
Slide 18: Transaction Overview
TRANSACTION OVERVIEW • Acquired CPI Binani, Inc. 3/20/15 • Cash consideration of $15 million; financed through a new senior secured 5-year term loan • Integration complete • $0.10 EPS accretion in 2015 LATEST ACQUISITION EXPANDS CAPABILITIES STRATEGIC BENEFITS • Expands thermoplastics capabilities w
Slide 19: Investment Overview
INVESTMENT OVERVIEW • New programs launched in the third quarter of 2015 • Investment of $2.2 million in injection metering system and clamp presses • Several programs awarded by multiple customers with a combined annual revenue of $10 million • Full annual effect of programs expected by 2017 RECENT
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 20 Historical Net Sales Historical EPS* Recent Results Commentary: $1.11 $0.92 $1.28 $1.58 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2012 2013 2014 2015 $162.5 $144.1 $175.2 $199.1 $0.0 $50.0 $100.0 $150.0 $
Slide 21: Consistent Profitability
CONSISTENT PROFITABILITY CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 21 Historical Gross Margins Historical EBITDA Margins Recent Results Commentary: • Solid gross margin for 2015 in the higher end of the historical range • Operating costs predominantly variable, allowing management to
Slide 22: Significant Investment in Infrastructure
SIGNIFICANT INVESTMENT IN INFRASTRUCTURE • Majority of capital additions relate to additional capacity • Significant infrastructure in place to support future business • Required infrastructure for the business creates a barrier to entry • Sustaining capex consistently less than 1% of revenues • Ear
Slide 23: Strong Financial Position
STRONG FINANCIAL POSITION Conservative Balance Sheet Low Financial Leverage Strong Liquidity Position Access to Capital Markets CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 23 • Pursue additional tuck-in and more transformative acquisitions • Reinvest in existing operations Financial Fle
Slide 24: Robust Long-Term Growth Outlook
ROBUST LONG-TERM GROWTH OUTLOOK • Truck builds expected to rebound after pause in 2016 to more than 325k class 8 units by 2020(1) • Increasing presence in non-truck markets • Securing business with new customers in the automotive, marine, construction, industrial, and agricultural equipment segments
Slide 25: Long Term Strategic Objectives
LONG TERM STRATEGIC OBJECTIVES CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 25 • 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 26: Investment Highlights
INVESTMENT HIGHLIGHTS • Extensive process expertise in large & growing industry; latest acquisition expands capabilities • 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 • Mu
Slide 27: Contact
CONTACT Company Representative Core Molding Technologies CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 27 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 28: Appendix
APPENDIX CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 28
Slide 29: Management Team
MANAGEMENT TEAM CORE MOLDING TECHNOLOGIES, INC. INVESTOR PRESENTATION // 29 Kevin Barnett – President & CEO – 19 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 30: EBITDA Reconciliation
EBITDA 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 Net Income $ 8,190 $ 6,866 $ 9,634 $ 12,050 Interest expense, net 334 214 122 330 Income tax expense 3,966 3,034 4,891 6,118 Depreciation and amortizatio