Core Molding Technologies Releases Second Quarter 2019 Results

August 12 2019

Core Molding Technologies, Inc. declared results for the second quarter ended June 30, 2019. Strong sales growth continued in the second quarter of 2019. Net sales increased $12.6 million or 18.4% and $21.9 million or 16.6% for the second quarter and first half of 2019 compared to the same periods last year. Product sales, excluding tooling sales, increased 15.7% and 17.6% for the second quarter and first half of 2019 compared to the same periods in 2018.

The Company had net income of $0.2 million in the second quarter of 2019 and a net loss of $3.6 million in the first half of 2019 compared to net income of $0.4 million and $1.0 million for the second quarter and first half of 2018.

Second Quarter 2019 Compared to Second Quarter 2018:

• Net sales were $81.2 million compared to $68.6 million.
• Product sales were $75.4 million compared to $65.2 million.
• Gross margin was 10.5% compared to 11.5%.
• Selling, general and administrative expenses were $7.2 million compared to $6.5 million.
• Operating income was $1.3 million compared to $1.4 million.
• Net income was $0.2 million, or $0.03 per diluted share, compared to $0.4 million, or $0.06 per diluted share.

First Half 2019 Compared to First Half 2018:

• Net sales were $153.5 million compared to $131.6 million.
• Product sales were $146.9 million compared to $124.9 million.
• Gross margin was 7.6% compared to 12.0%.
• Selling, general and administrative expenses were $14.4 million compared to $13.2 million.
• Operating loss was $2.7 million compared to operating income of $2.5 million.
• Net loss was $3.6 million, or $0.47 per diluted share, compared with net income of $1.0 million, or $0.12 per diluted share.

Second quarter and first half 2019 gross margin were negatively affected by operational inefficiencies and higher costs compared to the same period in the prior year, but have improved compared to the first quarter of 2019. “The turnaround plan the Company is currently undertaking has improved profitability compared to the first quarter of 2019 and is moving us back toward prior year levels,” said John Zimmer, Chief Financial Officer. “The Company recorded much lower customer chargebacks in the second quarter of 2019 compared to the first quarter of 2019 which was a direct result of meeting customers’ demand. We also saw an improvement in manufacturing efficiency, although we expect more improvement from this area as the turnaround plan continues,” Zimmer concluded.

Selling, general and administrative expenses increased in the second quarter and first half of 2019 compared to the same periods of 2018 due to higher spending on labor, travel and insurance costs. For the first half of 2019 the Company also had higher professional fees compared to the same period in 2018 as the Company utilized third party technical resources to assist in stabilizing its business. The Company completed the use of the technical resources in the first quarter of 2019 and did not have similar costs in the second quarter of 2019.

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