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What changed in CORE MOLDING TECHNOLOGIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CORE MOLDING TECHNOLOGIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+178 added−175 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-12)

Top changes in CORE MOLDING TECHNOLOGIES INC's 2024 10-K

178 paragraphs added · 175 removed · 144 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have performance procedures that align with our organization’s strategic goals and support employee development. Employee engagement surveys are conducted to understand employee satisfaction and provide opportunities to create action plans to improve our workplace culture and employee retention. Total Rewards – Our total rewards package supports an environment where employees want to stay and build their career.
Biggest changeTalent Planning – The Company has developed people management processes that enable us to hire, retain and develop a high-performing workforce. We have performance procedures that align with our organization’s strategic goals and support employee development. Employee engagement surveys are conducted to understand employee satisfaction and provide opportunities to create action plans to improve our workplace culture and employee retention.
The North American truck market in which Navistar, Volvo, and PACCAR compete is highly competitive and the demand for medium and heavy-duty trucks is subject to considerable volatility as it moves in response to cycles in the overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled.
The North American truck market in which International, Volvo, and PACCAR compete is highly competitive and the demand for medium and heavy-duty trucks is subject to considerable volatility as it moves in response to cycles in the overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled.
Sales to these customers individually were all less than 10% of total sales for interim and annual reporting during 2023. 7 Table of Contents GEOGRAPHIC INFORMATION Substantially all of the Company's products are sold in U.S. dollars.
Sales to these customers individually were all less than 10% of total sales for interim and annual reporting during 2024, 2023, and 2022. 7 Table of Contents GEOGRAPHIC INFORMATION Substantially all of the Company's products are sold in U.S. dollars.
See below under "Item 1A Risk Factors - Legal, Insurance, Tax and Cybersecurity Risks - Changes in legal, regulatory, and social responses to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability ." The Company has Environmental Management Systems at all of its facilities and has obtained ISO 14001 certification at all facilities.
See below under "Item 1A Risk Factors - Legal, Insurance, Tax and Cybersecurity Risks - Changes in legal, regulatory, and social responses to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability ." 9 Table of Contents The Company has Environmental Management Systems at all of its facilities and has obtained ISO 14001 certification at all facilities.
As of December 31, 2023, the Company owned 82 molding presses including 19 in its Columbus, Ohio facility; 24 in its Matamoros, Mexico facility; 18 in its Cobourg, Canada facility; 10 in its Gaffney, South Carolina facility; 5 in its Winona, Minnesota facility; and 6 in its Escobedo, Mexico facility.
As of December 31, 2024, the Company owned 82 molding presses including 19 in its Columbus, Ohio facility; 24 in its Matamoros, Mexico facility; 18 in its Cobourg, Canada facility; 10 in its Gaffney, South Carolina facility; 5 in its Winona, Minnesota facility; and 6 in its Escobedo, Mexico facility.
During times when demand exceeds the standard five day, three -shift capacity, the Company will work weekends to create additional capacity, which can provide capacity utilization percentages greater than 100%. During 2023, the Company has used various methods from overtime to a weekend manpower crews to support the customers' production requirements.
During times when demand exceeds the standard five day, three -shift capacity, the Company will work weekends to create additional capacity, which can provide capacity utilization percentages greater than 100%. During 2024, the Company has used various methods from overtime to weekend manpower crews to support the customers' production requirements.
CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT Capital expenditures totaled approximately $9.1 million, $16.6 million, and $11.6 million in 2023, 2022, and 2021 respectively. These capital expenditures primarily consisted of building and equipment improvements and additional production equipment to manufacture parts. The Company continuously engages in product development.
CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT Capital expenditures totaled approximately $11.5 million, $9.1 million, and $16.6 million in 2024, 2023, and 2022 respectively. These capital expenditures primarily consisted of building and equipment improvements and additional production equipment to manufacture parts. The Company continuously engages in product development.
The Company measures facility capacity in terms of its large compression molding presses (2,000 tons or greater). The Company owned 28 large compression molding presses at its facilities at December 31, 2023. The capacity utilization in these production facilities was 83% and 89% for the years ended December 31, 2023 and 2022, respectively.
The Company measures facility capacity in terms of its large compression molding presses (2,000 tons or greater). The Company owned 28 large compression molding presses at its facilities at December 31, 2024. The capacity utilization in these production facilities was 73% and 83% for the years ended December 31, 2024 and 2023, respectively.
The Company measures facility capacity in terms of its large injection molding presses (750 tons or greater). The Company owned 12 large injection molding presses at its facilities at December 31, 2023. The capacity utilization in these production facilities was 64% and 79% for the years ended December 31, 2023 and 2022, respectively.
The Company measures facility capacity in terms of its large injection molding presses (750 tons or greater). The Company owned 12 large injection molding presses at its facilities at December 31, 2024. The capacity utilization in these production facilities was 52% and 64% for the years ended December 31, 2024 and 2023, respectively.
Four plant locations making up 67.3% of the workforce are covered by collective bargaining agreements.
Four plant locations making up 67.4% of the workforce are covered by collective bargaining agreements.
However, new requirements, more stringent application of existing requirements or the discovery of previously 9 Table of Contents unknown environmental conditions could result in material environmental related expenditures in the future.
However, new requirements, more stringent application of existing requirements or the discovery of previously unknown environmental conditions could result in material environmental related expenditures in the future.
Details on the collective bargaining agreements are as follows: Plant Location Union Name Expiration Date Employees Columbus, Ohio International Association of Machinists and Aerospace Workers ("IAM") August 9, 2025 321 Matamoros, Mexico Sindicato de Jorneleros y Obreros January 1, 2025 743 Cobourg, Canada United Food & Commercial Workers Canada ("UFCW") November 1, 2025 132 Escobedo, Mexico Sindicato de trabajadores de la industria metalica y del comercio del estado de Nuevo Leon Presidente Benito Juarez Garcia C.T.M.
Details on the collective bargaining agreements are as follows: Plant Location Union Name Expiration Date Employees Columbus, Ohio International Association of Machinists and Aerospace Workers ("IAM") August 9, 2025 212 Matamoros, Mexico Sindicato de Jorneleros y Obreros December 31, 2025 657 Cobourg, Canada United Food & Commercial Workers Canada ("UFCW") November 1, 2025 138 Escobedo, Mexico Sindicato de trabajadores de la industria metalica y del comercio del estado de Nuevo Leon Presidente Benito Juarez Garcia C.T.M.
The 8 Table of Contents ordered backlog of four weeks of expected shipments was approximately $25.3 million (100% of which the Company shipped during the first month of 2024) and $30.3 million at December 31, 2023 and 2022, respectively.
The 8 Table of Contents ordered backlog of four weeks of expected shipments was approximately $19.1 million (100 % of which the Company shipped during the first month of 2025) and $25.3 million at December 31, 2024 and 2023, respectively.
The following table presents sales to major customers as a percent of total sales for the years ended December 31: 2023 2022 2021 Supply Agreement Supply Agreement Expiration BRP 14% 14% 12% Yes July 31, 2024 Navistar 20% 17% 15% No N/A PACCAR 10% 10% 12% No N/A UFP 7% 9% 12% Yes March 10, 2027 Volvo 16% 14% 12% Yes December 31, 2027 BRP provides a portfolio of industry-leading products comprising of snowmobiles, watercraft, on and off-road vehicles, power sports propulsion systems as well as engines for karts, motorcycles and recreational aircraft.
The following table presents sales to major customers as a percent of total sales for the years ended December 31: 2024 2023 2022 Supply Agreement Supply Agreement Expiration BRP 10% 14% 14% Yes July 31, 2029 International 22% 20% 17% No N/A PACCAR 13% 10% 10% No N/A Yamaha 10% 9% 6% No N/A Volvo 14% 16% 14% Yes December 31, 2027 BRP provides a portfolio of industry-leading products comprising of snowmobiles, watercraft, on and off-road vehicles, power sports propulsion systems as well as engines for karts, motorcycles and recreational aircraft.
The following table provides information related to the Company's sales by country, based on the ship to location of customers' production facilities, for the years ended December 31 (in thousands): 2023 2022 2021 United States $ 234,504 $ 231,391 $ 191,667 Mexico 105,818 113,245 88,952 Canada 11,980 26,829 22,642 Other 5,436 5,911 4,222 Total $ 357,738 $ 377,376 $ 307,483 SEASONALITY & BUSINESS CYCLE The Company's business is affected annually by the production schedules of its customers.
The following table provides information related to the Company's sales by country, based on the ship to location of customers' production facilities, for the years ended December 31 (in thousands): 2024 2023 2022 United States $ 187,973 $ 234,504 $ 231,391 Mexico 97,896 105,818 113,245 Canada 11,145 11,980 26,829 Other 5,364 5,436 5,911 Total $ 302,378 $ 357,738 $ 377,376 SEASONALITY & BUSINESS CYCLE The Company's business is affected annually by the production schedules of its customers.
We provide fair and competitive compensation and benefits that promote physical, emotional and financial well-being. With a focus on the employee experience, our workplace fosters employee engagement, productivity and morale while encouraging effort, creativity and innovation.
Total Rewards – Our total rewards package supports an environment where employees want to stay and build their career. We provide fair and competitive compensation and benefits that promote physical, emotional and financial well-being. With a focus on the employee experience, our workplace fosters employee engagement, productivity and morale while encouraging effort, creativity and innovation.
Management has estimated that costs related to research and development were approximately $1.7 million, $1.6 million and $1.3 million in 2023, 2022, and 2021, respectively. MAJOR CUSTOMERS The Company had five major customers during the year ended December 31, 2023, BRP, Inc. (“BRP”), Navistar, Inc. (“Navistar”), PACCAR, Inc. (“PACCAR”), Universal Forest Products, Inc.
Management has estimated that costs related to research and development were approximately $1.9 million, $1.7 million and $1.6 million in 2024, 2023, and 2022, respectively. MAJOR CUSTOMERS The Company had five major customers during the years ended December 31, 2024, 2023, and 2022, BRP, Inc. ("BRP"), International Motors, LLC ("International"), PACCAR, Inc.
HUMAN CAPITAL MANAGEMENT As of December 31, 2023, the Company employed a total of 1,857 employees, which consisted of 698 employees in the United States, 985 employees in Mexico and 174 employees in Canada. The salary workforce consisted of 369 employees, while 1,488 employees were hourly.
HUMAN CAPITAL MANAGEMENT As of December 31, 2024, the Company employed a total of 1,570 employees, which consisted of 509 employees in the United States, 880 employees in Mexico and 181 employees in Canada. The salary workforce consisted of 335 employees, while 1,235 employees were hourly.
OTHER CUSTOMERS The Company also produces products for other customers and industries, including medium and heavy-duty trucks, power sports, building products, industrial and utilities and other commercial markets.
Truck demand also depends on general economic conditions and changes to emission regulations, among other factors. OTHER CUSTOMERS The Company also produces products for other customers and industries, including medium and heavy-duty trucks, power sports, building products, industrial and utilities and other commercial markets.
To support the Company’s long-term strategic plan, the Company is committed to being an employer of choice focusing on providing a safe place to work, organizational development opportunities, competitive total rewards packages while keeping diversity, equity and inclusion in the forefront.
February 14, 2026 51 To support the Company’s long-term strategic plan, the Company is committed to being an employer of choice focusing on providing a safe place to work, organizational development opportunities, talent planning and a competitive total rewards package. Safety – The safety of the Company's workforce is a top priority with continued improvement in the Company's safety record.
(“UFP”) and Volvo Group North America, LLC (“Volvo”). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales during any annual or interim reporting period in the current year. The loss of a significant portion of sales to these customers could have a material adverse effect on the business of the Company.
("PACCAR"), Volvo Group North America, LLC ("Volvo") and Yamaha Motor Corporation ("Yamaha"). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales during any annual or interim reporting period presented.
Organizational Development – The Company offers learning and development opportunities throughout the workforce, including a comprehensive leadership program for high-potential employees identified through our succession and talent planning process. Talent Planning – The Company has developed people management processes that enable us to hire, retain and develop a high-performing workforce.
The Company utilizes behavior-based safety programs at all global facilities as a proactive method of increasing safe behaviors. Organizational Development – The Company offers learning and development opportunities throughout the workforce, including a comprehensive leadership program for high-potential employees identified through our succession and talent planning process.
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Demand for these products is driven by consumer demand and general economic conditions.
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The loss of a significant portion of sales to these customers could have a material adverse effect on the business of the Company.
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Truck demand also depends on general economic conditions and changes to emission regulations, among other factors. UFP supplies products to three industry segments: retail, industrial, and construction. These are highly-competitive markets, with suppliers competing for a share of available shelf space at large “big box” retailers and independent contractors.
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Yamaha offers a diverse portfolio of products, including motorcycles, watercraft, outboard motors, ATVs, side-by-side vehicles, musical instruments, and audio solutions, all designed to deliver exceptional performance and innovation across land, water, and sound. Demand for these products is driven by consumer demand and general economic conditions.
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As a discretionary product category, suppliers must also strive continuously to differentiate their products with unique designs, colors, and features, in addition to maintaining a constant focus on cost reduction. Demand for these products is driven by residential and commercial construction and general economic conditions, among other influences.
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February 18, 2024 (1) 54 (1) The Company is currently negotiating an extension to the Escobedo, Mexico collective bargaining agreement.
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Safety – The safety of the Company's workforce is a top priority with continued improvement in the Company's safety record. The Company utilizes behavior-based safety programs at all global facilities as a proactive method of increasing safe behaviors.
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Diversity, Equity and Inclusion – The Company is committed to diversity, equity and inclusion, including a focus on continued diversity of our Board of Directors ("the Board") and leadership team. The Company has implemented initiatives to help maintain a workforce that represents diversity and inclusion.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, recent inflationary pressures have resulted in increased raw material, labor and logistics expenses, which, if they continue for a prolonged period, may adversely affect our results of operations. If our costs are subject to continuing significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.
Biggest changeIf our costs are subject to continuing significant inflationary pressures and/or imposition of tariffs, we may not be able to fully offset such higher costs through price increases. Our inability to do so could harm our results of operations and financial condition. Long-term fixed price customer contracts could adversely impact operating results in an inflationary economy.
Cybersecurity failures may be caused by employee error, malfeasance, system errors or vulnerabilities, including vulnerabilities of our vendors, suppliers, and their products. We have been subject to cybersecurity incidents in the past. Based on information known to date, past incidents have not had a material impact on our financial condition or results of operations.
Cybersecurity failures may be caused by employee error, malfeasance, system errors or vulnerabilities, including vulnerabilities of our customers, vendors, suppliers, and their products. We have been subject to cybersecurity incidents in the past. Based on information known to date, past incidents have not had a material impact on our financial condition or results of operations.
As a result, a significant portion of our business and operations is subject to the risk of changes in economic conditions, tax systems, consumer preferences, social conditions, safety and security conditions, and political conditions inherent in Mexico and Canada, including changes in the laws and policies that govern foreign investment, as well as changes in United States laws and regulations relating to foreign trade and investment.
As a result, a significant portion of our business and operations is subject to the risk of changes in economic conditions, tax systems, consumer preferences, social conditions, safety and security conditions, and political conditions inherent in Mexico and Canada, including changes in the laws and policies that govern foreign investment, as well as changes in United States laws, policies and regulations relating to foreign trade, investment and relations.
In addition, perceptions of the Company among customers, suppliers, lenders, investors, securities analysts, and others could also be adversely affected. Material weaknesses may arise in the future due to our failure to implement and maintain adequate internal control over financial reporting.
In addition, perceptions of the Company among customers, suppliers, lenders, regulators, investors, securities analysts, and others could also be adversely affected. Material weaknesses may arise in the future due to our failure to implement and maintain adequate internal control over financial reporting.
It is difficult to predict the future interpretations and developments of environmental and health and safety laws and regulations or their impact on our future results and cash flows. Continued compliance could result in significant increases in capital expenditures and operating costs.
It is difficult to predict the future interpretations and developments of environmental and health and safety laws, policies, and regulations or their impact on our future results and cash flows. Continued compliance could result in significant increases in capital expenditures and operating costs.
If any of our customers were to move or if nearby facilities are closed, that may impact our ability to remain competitive. Additionally, our competitors could build a facility that is closer to our customers' facilities which may provide them with a geographic advantage.
If any of our customers were to move or if nearby facilities are closed or impaired, that may impact our ability to remain competitive. Additionally, our competitors could build a facility that is closer to our customers' facilities which may provide them with a geographic advantage.
Although it is uncertain at this time precisely what actions various governmental bodies will take early to address the effects of climate change and to achieve goals in response to the potential effects of climate change, various proposed legislative or regulatory initiatives related to climate changes, such as cap-and-trade systems, increased limits on emissions of greenhouse gases and fuel efficiency standards, or other measures, could in the future have a material impact on us, our customers, or the markets we serve, thereby resulting 15 Table of Contents in a material adverse effect on our financial condition or results of operation.
Although it is uncertain at this time precisely what actions various governmental bodies will take early to address the effects of climate change and to achieve goals in response to the potential effects of climate change, various proposed legislative or regulatory initiatives related to climate changes, such as cap-and-trade systems, increased limits on emissions of greenhouse gases and fuel efficiency standards, or other measures, could in the future have a material impact on us, our customers, or the markets we serve, thereby resulting in a material adverse effect on our financial condition or results of operation.
A change in control occurs when (a) one Person (as defined in the employment agreement), or more than one Person acting as a group, acquires ownership of stock of the Company that, together with the stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, (b) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election, or (c) the sale of all or substantially all of the Company’s assets.
A change in control occurs when (a) one Person (as defined in the employment agreement), or more than 17 Table of Contents one Person acting as a group, acquires ownership of stock of the Company that, together with the stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, (b) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election, or (c) the sale of all or substantially all of the Company’s assets.
To the extent that the Company does not meet the quality standards or demands of quality improvement initiatives sought by OEMs, or does not match the quality of suppliers of comparable products, OEMs may choose to purchase from these alternative suppliers, and as a result the Company may lose existing or new business with OEMs.
To the extent that the Company does not meet the quality standards or demands of quality improvement initiatives sought by OEMs, or does not match the quality of suppliers of comparable products, OEMs may choose to purchase from these alternative suppliers, and as a result the Company may lose existing business or not qualify for new business with OEMs.
As a components supplier to OEMs, we face a business risk of exposure to product liability claims in the event that our products malfunction and result in personal injury or death. Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the award of damages.
As a components supplier to OEMs, we face a business risk of exposure to product liability claims in the event that our products malfunction and result in significant property damage, personal injury or death. Product liability claims could result in significant losses as a result of expenses incurred in defending claims or the award of damages.
Our operations, facilities, and personnel are subject to extensive and evolving laws and regulations pertaining to air emissions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes, health and safety, the investigation and remediation of contamination, and the protection of the environment and natural resources.
Our operations, facilities, and personnel are subject to extensive and evolving state and federal laws and regulations pertaining to air emissions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes, health and safety, the investigation and remediation of contamination, and the protection of the environment and natural resources.
Our provision for income taxes and cash flow related to taxes may be negatively impacted by: (1) changes in the mix of earnings taxable in jurisdictions with different statutory rates, (2) changes in tax laws and accounting principles, (3) changes in the valuation of our deferred tax assets and liabilities, (4) discovery of new information during the course of tax return preparation, (5) increases in nondeductible expenses, or (6) being subject to include foreign income in the United States as part of the GILTI tax provision.
Our provision for income taxes and cash flow related to taxes may be negatively impacted by: (1) changes in the mix of earnings taxable in jurisdictions with different statutory rates, (2) changes in tax laws and accounting principles, (3) changes in the valuation of our deferred tax assets and liabilities, (4) discovery of new information during the course of tax return preparation, (5) increases in nondeductible expenses, or (6) being subject to include foreign income in the United States as part of the Global Intangible Low-Taxed Income or the GILTI tax provision.
We may not realize the operating results that we anticipate from these acquisitions or from acquisitions we may make in the future, and we may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such businesses.
We may not realize the operating results that we anticipate from these acquisitions or from acquisitions or business exits we may make in the future, and we may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such businesses.
Failure to comply with future regulations may subject us to penalties or other enforcement actions. Our ability to anticipate changes in these areas will be a significant factor in our ability to remain competitive.
Failure to comply with future regulations and policies may subject us to penalties or other enforcement actions. Our ability to anticipate changes in these areas will be a significant factor in our ability to remain competitive.
Our primary exchange rate exposure is with the Canadian dollar and the Mexican peso against the U.S. dollar. We may experience losses from foreign currency exchange rate fluctuations, and such losses could adversely affect our sales, earnings, cash flow, liquidity, or financial condition. Our stock price can be volatile.
Our primary exchange rate exposure is with the Canadian dollar and the Mexican peso against the U.S. dollar. We may experience losses from foreign currency exchange rate fluctuations, and such losses could adversely affect our sales, earnings, cash flow, liquidity, results of operations or financial condition. Our stock price can be volatile.
Furthermore, these customers may not continue to do business with us as they have in the past and we may not be able to supply these customers or any of our other customers at current levels. 10 Table of Contents Our business is affected by the cyclical and overall nature of the industries and markets that we serve.
Furthermore, these customers may not continue to do business with us as they have in the past and we may not be able to supply these customers or any of our other customers at current levels. Our business is affected by the cyclical and overall nature of the industries and markets that we serve.
Our common stock also has a low average daily trading volume, which limits a person's ability to quickly accumulate or quickly divest themselves of large blocks of our stock. In 14 Table of Contents addition, a low average trading volume can lead to significant price swings even when a relatively few number of shares are being traded.
Our common stock also has a low average daily trading volume, which limits a person's ability to quickly accumulate or quickly divest themselves of large blocks of our stock. In addition, a low average trading volume can lead to significant price swings even when a relatively few number of shares are being traded.
Beginning in the second half of 2024 and continuing through 2026, our business with Volvo, a significant customer accounting for approximately 16% of our 2023 total sales, will begin transitioning from existing production programs that the Company currently supplies to new programs that the Company does not support.
Beginning in the second half of 2024 and continuing through 2026, our business with Volvo, a significant customer accounting for approximately 14% of our 2024 total sales, will begin transitioning from existing production programs that the Company currently supplies to new programs that the Company does not support.
Price increases in raw materials (including price increases due to prolonged inflation) and availability of raw materials, including disruptions in supply chain, could adversely affect our operating results and financial condition. We purchase resins and fiberglass for use in production as well as hardware and other components for product assembly.
Price increases in raw materials (including price increases due to prolonged inflation or imposition of tariffs) and availability of raw materials, including disruptions in supply chain, could adversely affect our operating results and financial condition. We purchase resins and fiberglass for use in production as well as hardware and other components for product assembly.
Such warranty claims may result in costly product recalls, significant repair costs, and damage to our reputation, all of which would adversely affect our results of operations. Our insurance coverage may be inadequate to protect against the potential hazards to our business.
Such warranty claims may result in costly product recalls, significant repair costs, and damage to our reputation, all of which would adversely affect our business, results of operations or financial condition. Our insurance coverage may be inadequate to protect against the potential hazards to our business.
In addition, tightening of credit markets may have an adverse impact on our customers' ability to finance the sale of new trucks or our suppliers' ability to provide us with raw materials, either of which could adversely affect our business and results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, tightening of credit markets may have an adverse impact on our customers' ability to finance the sale of their products or our suppliers' ability to provide us with raw materials, either of which could adversely affect our business and results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The 17 Table of Contents occurrence of such events could have a material adverse effect on our business financial condition and results of operations. Risks Related to Economic Conditions Economic conditions and disruptions in the financial markets could have an adverse effect on our business, financial condition, and results of operations.
The occurrence of such events could have a material adverse effect on our business, financial condition or results of operations. 18 Table of Contents Risks Related to Economic Conditions Economic conditions and disruptions in the financial markets could have an adverse effect on our business, financial condition, and results of operations.
In addition, if any of our customers or suppliers experience a material work stoppage, that customer may halt or limit the purchase of our products or that supplier may interrupt supply of our necessary production components.
In addition, if any of our customers, vendors or suppliers experience a material work stoppage, that customer may halt or limit the purchase of our products or that supplier or vendor may interrupt supply or services of our necessary production components.
Any of these events might require us to move closer to our customers, build new facilities, or shift production between our current facilities to meet our customers' needs, resulting in additional cost and expense. Our products may be rendered obsolete or less attractive if there are changes in technology, regulatory requirements, or competitive processes.
Any of these events might require us to move closer to our customers, build new facilities, or shift production between our current facilities to meet our customers' needs, resulting in additional cost and expense. 14 Table of Contents Our products may be rendered obsolete or less attractive if there are changes in technology, regulatory requirements, governmental policies or competitive processes.
Although the Company maintains property and business interruption insurance, damage from a weather event, natural disaster, or disruption in the supply chain or customer demand may not be fully covered by our insurance and could cause a material adverse impact on our business.
Although the Company maintains property 16 Table of Contents and business interruption insurance, damage from a weather event, natural disaster, or disruption in the supply chain or customer demand may not be fully covered by our insurance and could cause a material adverse impact on our business.
If we were to incur a significant liability for which we were not fully insured or that our insurers disputed, it could have a material adverse effect on our financial position.
If we were to incur a significant liability for which we were not fully insured or that our insurers disputed, it could have a material adverse effect on our financial position or results of operations.
The loss of any significant portion of sales to any of our significant customers could have a material adverse effect on our business, results of operations, and financial condition. Accounts receivable balances with five customers accounted for 67% of accounts receivable at December 31, 2023.
The loss of any significant portion of sales to any of our significant customers could have a material adverse effect on our business, results of operations, and financial condition. Accounts receivable balances with five customers accounted for 71% of accounts receivable at December 31, 2024.
If we are unable to hire and retain employees capable of performing at a high level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, have unintended negative effects, our business could be adversely affected.
If we are unable to hire and retain skilled employees capable of performing at a high level, or if mitigation measures we may take to respond to a decrease in the availability of skilled laborers, such as overtime and third-party outsourcing, have unintended negative effects, then our business could be adversely affected.
This could cause 12 Table of Contents us to shut down production facilities relating to these products, which could have a material adverse effect on our business, results of operations, or financial condition. Our foreign operations in Mexico and Canada subject us to risks that could negatively affect our business.
This could cause us to shut down, partially or completely, production facilities relating to these products, which could have a material adverse effect on our business, results of operations, or financial condition. Our foreign operations in Mexico and Canada subject us to risks that could negatively affect our business.
Risks Relating to our Business Our business has concentration risks associated with significant customers. Sales to five customers constituted approximately 68% of our 2023 total sales. No other customer accounted for more than 10% of our total sales for this period.
Risks Relating to our Business Our business has concentration risks associated with significant customers. Sales to five customers constituted approximately 69% of our 2024 total sales. No other customer accounted for more than 10% of our total sales for this period.
The North American heavy and medium-duty truck industry, on which the demand of our products is largely dependent, is highly cyclical. In 2023, approximately 52% of our product sales was in this industry.
The North American heavy and medium-duty truck industry, on which the demand of our products is largely dependent, is highly cyclical. In 2024, approximately 56% of our product sales was in this industry.
Legal, Insurance, Tax and Cybersecurity Risks Changes in the legal, regulatory, and social responses to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability.
Legal, Insurance, Tax and Cybersecurity Risks Changes in the legal, regulatory, and social responses, including those of stockholder activist organizations, to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability.
Factors that could result in our inability to meet customer demands include a failure by one or more of our suppliers to supply us with the raw materials and other resources that we need to operate our business effectively and an unforeseen spike in demand for our products, which would create capacity constraints, among other factors.
Factors that could result in our inability to meet customer demands include a failure by one or more of our suppliers to supply us with the raw materials and other resources that we need to operate our business effectively, potential quality issues could materialize forcing us to halt, delay or materially adjust deliveries, and an unforeseen spike in demand for our products, which would create capacity constraints, among other factors.
Any direct or indirect supply chain disruptions, including from the effects of any pandemics or epidemics, economic slowdowns, recessions, geopolitical events, inflation or rising interest rates, may have an adverse impact on our business, financial condition, results of operations or cash flows.
Any direct or indirect supply chain disruptions, including from the effects of any imposition of tariffs or retaliatory trade measures, pandemics or epidemics, economic slowdowns, recessions, geopolitical events, natural disasters or similar catastrophes, inflation or rising interest rates, may have an adverse impact on our business, financial condition, results of operations or cash flows.
Our ability to maintain effective internal control over financial reporting may be insufficient to allow us to accurately report our financial results or prevent fraud, and this could cause our financial statements to become materially misleading and adversely affect the trading price of our common stock.
Any such charges could materially adversely affect our financial results in the periods in which they are recorded. 15 Table of Contents Our ability to maintain effective internal control over financial reporting may be insufficient to allow us to accurately report our financial results or prevent fraud, and this could cause our financial statements to become materially misleading and adversely affect the trading price of our common stock.
The market for this industry fluctuates in response to factors that are beyond our control, such as general economic conditions, interest rates, federal and state regulations (including engine emissions regulations, tariffs, import regulations, and other taxes), consumer spending, fuel costs, supply chain constraints, our customers' inventory levels and production rates, and the overall strength of the economy.
The market for this industry fluctuates in response to factors that are beyond our control, such as: general economic conditions; interest rates; federal 10 Table of Contents and state regulations, including engine emissions regulations, import regulations, tariffs (for example, on products imported into or exported from the U.S., including under U.S. or other trade laws or measures, or other key markets); and other taxes, consumer spending, fuel costs, supply chain constraints, our customers' inventory levels and production rates, and the overall strength of the economy.
If this occurs, we may be required to incur additional shipping expenses to ensure on-time delivery or otherwise be required to pay late fees, which could have a material adverse effect on our business, results of operations, or financial condition. Increasing competition for highly skilled and talented workers, as well as labor shortages, could adversely affect our business.
If this occurs, we may be required to incur additional shipping expenses to ensure on-time delivery or otherwise be required to pay late fees, which could have a material adverse effect on our business, results of operations, or financial condition.
We expect such acquisitions will produce operating results consistent with our other operations; however, any such acquisition could fail to produce the expected operating results. 13 Table of Contents Any acquisitions, may present significant challenges for our management due to the increased time and resources required to properly integrate management, employees, information systems, accounting controls, personnel, and administrative functions of the acquired business with those of ours and to manage the combined company on a going forward basis.
Any acquisitions may present significant challenges for our management due to the increased time and resources required to properly integrate management, employees, information systems, accounting controls, personnel, and administrative functions of the acquired business with those of ours and to manage the combined company on a going forward basis.
All costs may not be accurately identified during the Company's quoting process and the expected level of manufacturing efficiency may not be achieved. As a result, we may not realize the anticipated operating results related to new business awards. We will continue to pursue, and may be awarded, new business from existing or new customers.
As a result, we may not realize the anticipated operating results related to new business awards. We will continue to pursue, and may be awarded, new business from existing or new customers.
In addition, we may be exposed to obligations or involved from time to time in 16 Table of Contents administrative or legal proceedings relating to environmental, health and safety or other regulatory matters, and may incur financial and other obligations relating to such matters.
In addition, we may be exposed to obligations or involved from time to time in administrative or legal proceedings relating to environmental, health and safety or other regulatory matters, and may incur financial and other obligations relating to such matters that could have an adverse impact on our business, results of operations, or financial condition.
If we are unsuccessful in developing ways to mitigate these raw material increases or are unable to offset the increase through price increases to our customers, our results of operations could be materially adversely impacted. We rely upon a global supply chain to deliver the raw materials, components, systems and parts that we need to manufacture and service our products.
If we are unsuccessful in developing ways to mitigate the adverse effects of these raw material price increases or are unable to offset the increase through price increases to our customers, our results of operations could be materially adversely impacted.
We, or third parties who provide material services to us, may experience such incidents in the future, potentially with more frequency or sophistication. In the conduct of our business, we collect, use, transmit and store data on information systems, which are vulnerable to disruption and an increasing threat of continually evolving cybersecurity risks.
In the conduct of our business, we collect, use, transmit and store data on information systems, which are vulnerable to disruption and an increasing threat of continually evolving cybersecurity risks.
Work stoppages or other labor issues at our facilities or at our customers' facilities could adversely affect our operations. As of December 31, 2023, unions at our Columbus, Ohio, Matamoros and Escobedo, Mexico, and Cobourg, Canada facilities represented approximately 67.3% of our entire workforce. As a result, we are subject to the risk of work stoppages and other labor-relations matters.
Work stoppages or other labor issues at our facilities or at our customers' facilities, or those of our supplies or vendors, could adversely affect our business, results of operations or financial condition. As of December 31, 2024, unions at our Columbus, Ohio, Matamoros and Escobedo, Mexico, and Cobourg, Canada facilities represented approximately 67.4% of our entire workforce.
OEMs may also seek to save costs by purchasing components from suppliers that are geographically closer to their production facilities or relocating production to locations with lower cost structures and purchasing components from suppliers with lower production costs.
OEMs may also seek to save costs by purchasing components from suppliers that are geographically closer to their production facilities or relocating production to locations with lower cost structures and purchasing components from suppliers with lower production costs. 11 Table of Contents These decisions by OEMs could require us to shift production between our facilities, move production lines between our facilities, or open new facilities to remain competitive.
Any failure by us to reach a new agreement upon expiration of such union contracts may have a material adverse effect on our business, results of operations, or financial condition. The Company is currently negotiating an extension to the Escobedo, Mexico collective bargaining agreement.
Any prolonged work stoppage or strike at our unionized facilities could have a material adverse effect on our business, results of operations, or financial condition. Any failure by us to reach a new agreement upon expiration of such union contracts may have a material adverse effect on our business, results of operations, or financial condition.
Additionally, OEMs have generally required component suppliers to provide more design engineering input at earlier 11 Table of Contents stages of the product development process, the costs of which have, in some cases, been absorbed by the suppliers.
Shifting production, moving production lines, or opening new locations could result in significant costs required for capital investment, transfer expenses, and operating costs. Additionally, OEMs have generally required component suppliers to provide more design engineering input at earlier stages of the product development process, the costs of which have, in some cases, been absorbed by the suppliers.
Such assessment and determination involves significant judgments to estimate the fair value of our reporting unit including estimating future cash flows, near term and long term revenue growth, and determining appropriate discount rates, among other assumptions. If operating earnings fall below forecasted operating earnings, we would perform an interim or annual goodwill impairment analysis.
Such assessment and determination involves significant judgments to estimate the fair value of our reporting unit including estimating future cash flows, near term and long term revenue growth, and determining appropriate discount rates, among other assumptions. As of December 31, 2024, goodwill and indefinite lived intangibles were $21,806,000, or 10.4% of our total assets.
Changes in laws and regulations related to foreign trade and investment may have an adverse effect on our results of operations, financial condition, or cash flows. Our business is subject to risks associated with manufacturing equipment and infrastructure. We convert raw materials into molded products through a manufacturing process at each production facility.
Our business is subject to risks associated with manufacturing equipment and infrastructure. We convert raw materials into molded products through a manufacturing process at each production facility.
Our success largely depends on the efforts and abilities of our key personnel and our continuing ability to attract and retain highly qualified personnel. Their skills, experience, and industry contacts significantly benefit us. A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels and government regulations.
Increasing competition for highly skilled and talented workers, as well as labor shortages, could adversely affect our business. Our success largely depends on the efforts and abilities of our key personnel and our continuing ability to attract and retain highly qualified personnel. Their skills, experience, and industry contacts significantly benefit us.
We explore opportunities to acquire businesses that we believe are related to our core competencies, some of which may be material to us.
We explore opportunities to acquire businesses that we believe are related to our core competencies, some of which may be material to us. We expect such acquisitions will produce operating results consistent with our other operations; however, any such acquisition could fail to produce the expected operating results.
Expected future sales from business awards may not materialize. We may not realize the sales or operating results that we anticipate from new business awards, and we may experience difficulties in meeting the production demands of new business awards.
We may not realize the sales or operating results that we anticipate from new business awards, and we may experience difficulties in meeting the production demands of new business awards. 13 Table of Contents The success of our business relies on our ability to produce products which meet the quality, performance, and price expectations of our customers.
The success of our business relies on our ability to produce products which meet the quality, performance, and price expectations of our customers. Our ability to recognize profit is largely dependent upon accurately identifying the costs associated with the manufacturing of our products and executing the manufacturing process in a cost-effective manner.
Our ability to recognize profit is largely dependent upon accurately identifying the costs associated with the manufacturing of our products and executing the manufacturing process in a cost-effective manner. All costs may not be accurately identified during the Company's quoting process and the expected level of manufacturing efficiency may not be achieved.
Our inability to do so could harm our results of operation. Long-term fixed price customer contracts could adversely impact operating results in an inflationary economy. In order to obtain new business in a competitive environment, the Company enters into long-term contracts that fix the customer product price and requires the Company to accept all product orders.
In order to obtain new business in a competitive environment, the Company enters into long-term contracts that fix the customer product price and requires the Company to accept all product orders pursuant to such contracts. These fixed price customer contracts allow for certain price increases but may not provide for recovery of all of the Company's cost increases.
To date we have experienced an increasingly competitive labor market. The increasing competition for highly skilled and talented employees has resulted, and could in the future result, in higher compensation costs and could result in difficulties in maintaining a capable workforce.
A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels and government regulations or policies. The increasing competition for highly skilled and talented employees has resulted, and could in the future result, in higher compensation costs resulting in difficulties in maintaining a capable workforce.
Should that analysis conclude that the reporting unit’s fair value were to be below carrying value a goodwill impairment charge would be necessary. Any such charges could materially adversely affect our financial results in the periods in which they are recorded.
If operating earnings fall below forecasted operating earnings, we would perform an interim or annual goodwill impairment analysis. Should that analysis conclude that the reporting unit’s fair value were to be below carrying value a goodwill impairment charge would be necessary.
The current Columbus, Ohio, Matamoros, Mexico, Cobourg, Canada, and Escobedo, Mexico union contracts extend through August 9, 2025, January 1, 2024, November 1, 2025 and February 18, 2024, respectively. Any prolonged work stoppage or strike at our unionized facilities could have a material adverse effect on our business, results of operations, or financial condition.
As a result, we are subject to the risk of work 12 Table of Contents stoppages and other labor-relations matters. The current Columbus, Ohio, Matamoros, Mexico, Cobourg, Canada, and Escobedo, Mexico union contracts extend through August 9, 2025, December 31, 2025, November 1, 2025 and February 14, 2026, respectively.
Removed
These fixed price customer contracts allow for certain price increases but may not provide for recovery of all of the Company's cost increases.
Added
In particular, the continuing adoption or expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs and prices, our customers, our suppliers, and the economy, which in turn could have a material adverse effect on our business, operating results, and financial condition.
Removed
These decisions by OEMs could require us to shift production between our facilities, move production lines between our facilities, or open new facilities to remain competitive. Shifting production, moving production lines, or opening new locations could result in significant costs required for capital investment, transfer expenses, and operating costs.
Added
We rely upon a global supply chain to deliver the raw materials, components, systems and parts that we need to manufacture and service our products.
Added
In addition, recent inflationary pressures have resulted in increased raw material, labor and logistics expenses and evolving trade policies could continue to make sourcing products from foreign countries difficult and costly, including the imposition of tariffs and related retaliatory measures, which may force us to face higher costs that could require us to raise prices for our products, which, may adversely affect our results of operations.
Added
Additionally, our customers may halt or delay their production for the same reason if one of their other suppliers fails to deliver necessary components. This may cause our customers to suspend their orders or instruct us to suspend delivery of our products, which may adversely affect our business, results of operations, or financial condition.
Added
Changes in laws, policies and regulations related to foreign trade, investment and relations may have an adverse effect on our results of operations, financial condition, or cash flows.
Added
Similarly, the potential imposition of tariffs, especially in Mexico, may lead to further challenges that may negatively affect our business if there is a resulting reduction in demand for our products, result in the loss of customers and harm our competitive position in key markets.
Added
Changes in U.S. trade policy, including the imposition of new or increased tariffs and the resulting consequences, could have an adverse effect on our business, operating results, and financial condition.
Added
Evolving trade policies could make sourcing and selling products between foreign countries difficult and costly, as the Company and its customers sell foreign produced products into the United States and the Company sources a portion of its raw materials used in production from outside of the U.S.
Added
For example, in early 2025, the current U.S. administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico and Canada, all of which were subsequently postponed for 30 days prior to becoming effective.
Added
We cannot predict the extent to which the U.S. or other countries will impose new or additional quotas, duties, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict the outcome of negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
Added
The continuing adoption or expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs and prices, our customers, our suppliers, and the economy, which in turn could have a material adverse effect on our business, operating results, and financial condition.
Added
Expected future sales from business awards may not materialize.
Added
The need for additional capital may necessitate that the Company incur further indebtedness or issue additional stock in the equity markets in order to raise needed capital.
Added
On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. Repurchases of shares of common stock under the stock repurchase program are made in the open market.
Added
The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company’s discretion. Company stock repurchases under the program may result in common stock price and volume fluctuations.
Added
During the year ended December 31, 2024, the Company repurchased 172,043 common shares under the stock repurchase program and had a remaining repurchase authorization of $4,561,000 as of December 31, 2024.
Added
Additionally, if our controls are not effective in timely identifying the occurrence of material cybersecurity incidents involving our information systems or data, then we may not comply with SEC’s cybersecurity disclosure regulations, which could lead to regulatory action, fines, penalties, inquiries or reprimands that adversely impact our business, as well as lead to a decline in customer engagement or confidence, negative publicity, and possibly an increase in our operating costs to improve monitoring and compliance features relating to cybersecurity.
Added
The rapid evolution and increased adoption of artificial intelligence technologies may intensify these risks. We, or third parties who provide material services to us, may experience such incidents in the future, potentially with more frequency or sophistication.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed10 unchanged
Biggest changeThe senior executive team provides an in-depth annual report and quarterly updates on our enterprise risks, including cybersecurity risks, to present to the full Board. Board oversight While management is responsible for the day-to-day management of cybersecurity risks, our Board maintains principal oversight responsibility for our enterprise risk management, including cybersecurity.
Biggest changeBoard oversight 19 Table of Contents While management is responsible for the day-to-day management of cybersecurity risks, our Board maintains principal oversight responsibility for our enterprise risk management, including cybersecurity.
Please refer to the risk factor titled "Cybersecurity attacks may threaten our confidential information, disrupt operations and result in harm to our reputation and adversely impact our business and financial performance." See Part I, Item 1A for further information regarding cybersecurity risks and potential impacts on our business and results of operations.
Please refer to the risk factor titled "Cybersecurity incidents may threaten our confidential information, disrupt operations and result in harm to our reputation and adversely impact our business and financial performance." See Part I, Item 1A for further information regarding cybersecurity risks and potential impacts on our business and results of operations.
The senior executive team is informed about and oversees the prevention, detection, mitigation, and remediation of cybersecurity incidents through their management of, and participation in, our cybersecurity risk management and strategy 18 Table of Contents processes.
The senior executive team is informed about and oversees the prevention, detection, mitigation, and remediation of cybersecurity incidents through their management of, and participation in, our cybersecurity risk management and strategy processes. The senior executive team provides an in-depth annual report and quarterly updates on our enterprise risks, including cybersecurity risks, to present to the full Board.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeMINE SAFETY DISCLOSURE None. 19 Table of Contents PART II
Biggest changeMINE SAFETY DISCLOSURE None. 20 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+3 added−1 removed0 unchanged
Biggest changePeriod Total number of shares purchased Average price paid per share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number that May Yet be Purchased Under the Plans or Programs October 1 to 31, 2023 — $ — — — November 1 to 30, 2023 — — — — December 1 to 31, 2023 — — — — Total — $ — — — ITEM 6. [RESERVED] 20 Table of Contents
Biggest changePeriod Total number of shares purchased Average price paid per share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Amount that May Yet be Purchased Under the Plans or Programs (1) October 1 to 31, 2024 — $ — — $ 5,136,000 November 1 to 30, 2024 — — — 5,136,000 December 1 to 31, 2024 36,170 15.95 36,170 4,561,000 Total 36,170 $ 15.95 36,170 — 1.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES The Company's common stock is traded on the NYSE American LLC under the symbol “CMT”. The Company's common stock was held by 306 holders of record on March 11, 2024.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is traded on the NYSE American LLC under the symbol “CMT”. The Company's common stock was held by 293 holders of record on March 10, 2025.
Removed
We repurchased 125,701 shares of our common stock during the year ended December 31, 2023. All stock was purchased to satisfy tax withholding obligations upon vesting and exercising of stock awards. There were no repurchases of our common stock during the three months ended December 31, 2023.
Added
We repurchased 244,701 shares of our common stock during the year ended December 31, 2024. The following table provides information with respect to repurchases of common stock by us and our “affiliated purchasers” (as defined by Rule 10b-18(a)(3) under the Exchange Act) during the three months ended December 31, 2024.
Added
On March 11, 2024, the Company announced that its Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $7,500,000 of its outstanding shares of common stock. Repurchases of shares of common stock under the stock repurchase program are made in the open market and in accordance with applicable securities laws.
Added
The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company’s discretion. ITEM 6. [RESERVED] 21 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [RESERVED] 20 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 29 Item 8. Financial Statements and Supplementary Data (PCAOB 173) 30 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 58 Item 9A. Controls and Procedures 59
Biggest changeItem 6. [RESERVED] 21 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30 Item 8. Financial Statements and Supplementary Data (PCAOB 173) 31 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 60 Item 9A. Controls and Procedures 61 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+10 added−21 removed48 unchanged
Biggest changeThe effect of a change in healthcare costs is described in Note 12 - Post Retirement Benefits . Core Molding Technologies had a liability for post retirement healthcare benefits based on actuarially computed estimates of $3,116,000 at December 31, 2023 and $6,625,000 at December 31, 2022.
Biggest changeThe Company had a liability for post-retirement healthcare benefits based on actuarial computed estimates of $3,298,000 at December 31, 2024 and $3,116,000 at December 31, 2023. Revenue Recognition The Company historically has recognized revenue from two streams, product revenue and tooling revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products.
As a result, the Company recorded one-time losses of $1,234,000 from writing off outstanding deferred loan costs and $348,000 from prepayment fees associated with the repayment of the FGI Term Loan. Interest expense totaled $1,011,000 for the year ended December 31, 2023, compared to interest expense of $1,960,000 for the year ended December 31, 2022.
As a result, the Company recorded one-time losses of $1,234,000 from writing off outstanding deferred loan costs and $348,000 from prepayment fees associated with the repayment of the FGI Term Loan. Net interest expense totaled $1,011,000 for the year ended December 31, 2023, compared to interest expense of $1,960,000 for the year ended December 31, 2022.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DESCRIPTION OF THE COMPANY Core Molding Technologies and its subsidiaries operate in the engineered materials market as one operating segment as a molder of thermoplastic and thermoset structural products. During the year ended December 31, 2023 the Company's operating segment consisted of one component reporting unit.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DESCRIPTION OF THE COMPANY Core Molding Technologies and its subsidiaries operate in the engineered materials market as one operating segment as a molder of thermoplastic and thermoset structural products. During the year ended December 31, 2024 the Company's operating segment consisted of one component reporting unit.
The Huntington Credit Agreement contains certain customary representations and warranties, conditions, affirmative and negative covenants and events of default. The Company is in compliance with such covenants as of December 31, 2023. Voluntary prepayments of amounts outstanding under the Huntington Loans are permitted at any time without premium or penalty.
The Huntington Credit Agreement contains certain customary representations and warranties, conditions, affirmative and negative covenants and events of default. The Company is in compliance with such covenants as of December 31, 2024. Voluntary prepayments of amounts outstanding under the Huntington Loans are permitted at any time without premium or penalty.
The Company believes that the deferred tax assets associated with the Mexican tax jurisdictions are more-likely-than-not to be realizable based on estimates of future taxable income. Management recognizes the financial statement effects of a tax position when it is more likely than not the position will be sustained upon examination.
The Company believes that the deferred tax assets associated with the Mexican and Canadian tax jurisdictions are more-likely-than-not to be realizable based on estimates of future taxable income. Management recognizes the financial statement effects of a tax position when it is more likely than not the position will be sustained upon examination.
Huntington Revolving Loan Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of December 31, 2023.
Huntington Revolving Loan Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company a revolving loan commitment (the “Huntington Revolving Loan”) of $25,000,000 ($13,689,000 of which was advanced to the Company on July 22, 2022). The Company has $25,000,000 of available revolving loans of which none is outstanding as of December 31, 2024.
There was no impairment of the Company's long-lived assets for the years ended December 31, 2023, 2022, and 2021. Goodwill The purchase consideration of acquired businesses have been allocated to the assets and liabilities acquired based on the estimated fair values on the respective acquisition dates.
There was no impairment of the Company's long-lived assets for the years ended December 31, 2024, 2023, and 2022. Goodwill The purchase consideration of acquired businesses have been allocated to the assets and liabilities acquired based on the estimated fair values on the respective acquisition dates.
Huntington Capex Loan Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured Capex loan (the “Huntington Capex Loan”) in the maximum aggregate principal amount of $25,000,000 (none of which was advanced to the Company on July 22, 2022 and through December 31, 2023).
Huntington Capex Loan Pursuant to the terms of the Huntington Credit Agreement, Huntington made available to the Company secured Capex loan (the “Huntington Capex Loan”) in the maximum aggregate principal amount of $25,000,000 (none of which was advanced to the Company on July 22, 2022 and through December 31, 2024).
Under a qualitative and quantitative approach, the impairment test for goodwill consists of an assessment of whether it is more-likely-than-not that the reporting unit’s fair value is less than its carrying amount. As part of the qualitative assessment, the Company considers relevant events and circumstances that affect the fair value or carrying amount of the 27 Table of Contents Company.
Under a qualitative and quantitative approach, the impairment test for goodwill consists of an assessment of whether it is more-likely-than-not that the reporting unit’s fair value is less than its carrying amount. As part of the qualitative assessment, the Company considers relevant events and circumstances that affect the fair value or carrying amount of the Company.
Shelf Registration On December 22, 2023 the Company filed a universal shelf Registration Statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended, which became effective on January 8, 2024. The Registration Statement replaces an existing shelf Registration Statement which expired on December 16, 2023.
Shelf Registration On December 22, 2023 the Company filed a universal shelf Registration Statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended, which became effective on January 8, 2024. The Registration Statement replaces an existing shelf Registration Statement which expired on December 16, 26 Table of Contents 2023.
Daily Simple SOFR means, for any day (a “SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, the “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S.
Daily Simple SOFR means, for any day (a “SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, the “SOFR Determination Date”) that is five (5) U.S. 25 Table of Contents Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S.
The Company's largest market, North American truck, which is highly cyclical, accounted for 52%, 45%, and 41% of the Company’s product revenue for the years ended December 31, 2023, 2022, and 2021, respectively. Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs.
The Company's largest market, North American truck, which is highly cyclical, accounted for 56%, 52%, and 45% of the Company’s product revenue for the years ended December 31, 2024, 2023, and 2022, respectively. Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs.
The interest rate for the Huntington Term Loan was 7.11% as of December 31, 2023. Interest Rate Swap Agreement The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July 2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term Loan.
The interest rate for the Huntington Term Loan was 6.11% as of December 31, 2024. Interest Rate Swap Agreement The Company entered into an interest rate swap agreement that became effective July 22, 2022 and continues through July 2027, which was designed as a cash flow hedge for an initial aggregate amount of $25,000,000 of the Huntington Term Loan.
Management also records estimates for customer returns and deductions, discounts offered to customers, and for price adjustments. Should customer returns and deductions, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company had an allowance for estimated chargebacks of $138,000 at December 31, 2023 and $502,000 at December 31, 2022.
Management also records estimates for customer returns and deductions, discounts offered to customers, and for price adjustments. Should customer returns and deductions, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company had an allowance for estimated chargebacks of $227,000 at December 31, 2024 and $138,000 at December 31, 2023.
As of December 31, 2023, the Company had a valuation allowance of $1,530,000 against the deferred tax asset related to local tax positions in the United States, due to cumulative losses over the last three years and uncertainty related to the Company’s ability to realize the deferred assets.
As of December 31, 2024, the Company had a valuation allowance of $1,265,000 against the deferred tax asset related to local tax positions in the United States, due to cumulative losses over the last three years and uncertainty related to the Company’s ability to realize the deferred assets.
Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $524,000 at December 31, 2023.
Under this agreement, the Company will pay a fixed SOFR rate of 2.95% to the swap counterparty in exchange for the Term Loans daily variable SOFR. The fair value of the interest rate swap was an asset of $491,000 at December 31, 2024.
If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company determined that no allowance for doubtful accounts was needed at December 31, 2023 or December 31, 2022, respectively.
If the financial condition of the Company’s customers were to deteriorate, resulting in an 27 Table of Contents impairment of their ability to make payments, additional allowances may be required. The Company determined that no allowance for doubtful accounts was needed at December 31, 2024 or December 31, 2023, respectively.
In connection with the credit agreement, the Company incurred debt origination fees of $402,000 related to the Huntington Credit Agreement, which is being amortized over the life of the Credit Agreement. The aggregate unamortized deferred financing fees as of December 31, 2023 totaled $291,000.
In connection with the credit agreement, the Company incurred debt origination fees of $402,000 related to the Huntington Credit Agreement, which is being amortized over the life of the Credit Agreement. The aggregate unamortized deferred financing fees as of December 31, 2024 totaled $210,000.
Labor markets have also stabilized, although at higher cost levels over the past several years. The Company does not anticipate challenges in hiring hourly labor, although management believes wage pressure will continue, especially in Mexico. 2023 compared to 2022 Net sales for the years ended December 31, 2023 and 2022 totaled $357,738,000 and $377,376,000, respectively.
Labor markets have also stabilized, although at higher cost levels over the past several years. The Company does not anticipate challenges in hiring hourly labor, although management believes wage pressure will continue, especially in Mexico. 2024 compared to 2023 Net sales for the years ended December 31, 2024 and 2023 totaled $302,378,000 and $357,738,000, respectively.
As of December 31, 2023 and 2022, the Company had no significant off-balance sheet arrangements. 26 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
As of December 31, 2024 and 2023, the Company had no significant off-balance sheet arrangements. CRITICAL ACCOUNTING ESTIMATES Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The interest rate for the Huntington Revolving Loan was 7.11% as of December 31, 2023. The Huntington Credit Agreement makes available to the Company a revolving commitment in the maximum amount of $25,000,000 at the Company’s option at any time during the five-year period following the closing.
The interest rate for the Huntington Revolving Loan was 6.33% as of December 31, 2024. The Huntington Credit Agreement makes available to the Company a revolving commitment in the maximum amount of $25,000,000 at the Company’s option at any time during the five-year period following the closing.
The Company has recorded an allowance for slow moving and obsolete inventory of $671,000 at December 31, 2023 and $433,000 at December 31, 2022. Long-Lived Assets Long-lived assets consist primarily of property, plant and equipment and finite-lived intangibles.
The Company has recorded an allowance for slow moving and obsolete inventory of $1,392,000 at December 31, 2024 and $671,000 at December 31, 2023. Long-Lived Assets Long-lived assets consist primarily of property, plant and equipment and finite-lived intangibles.
Huntington Credit Agreement On July 22, 2022, the Company entered into a credit agreement (the “Huntington Credit Agreement”) with The Huntington National Bank (“Huntington”), as the sole lender, administrative agent, lead arranger and book runner, and the lenders from time to time thereto.
Huntington Credit Agreement On July 22, 2022, the Company entered into a credit agreement and on March 7, 2024, entered into the First Amendment to the credit agreement (as amended, the “Huntington Credit Agreement”) with The Huntington National Bank (“Huntington”), as the sole lender, administrative agent, lead arranger and book runner, and the lenders from time to time thereto.
An increase in working capital of $3,812,000 resulted in a decrease in cash. The decrease in cash from working capital was primarily related to net changes in prepaid assets and accounts payable, offset by net changes in other accrued expenses, accounts receivable and inventory.
A decrease in working capital of $4,064,000 resulted in an increase in cash. The increase in cash from working capital was primarily related to net changes in accounts receivable, inventory and other prepaid assets, offset by net changes in accounts payable and other accrued liabilities.
Cash used in investing activities totaled $9,100,000 for the year ended December 31, 2023, primarily related to purchases of property, plant and equipment for additional capacity, automation, new programs and equipment improvements at the Company’s production facilities.
Cash used in investing activities totaled $11,525,000 for the year ended December 31, 2024, related to purchases of property, plant and equipment for additional capacity, automation, new programs and equipment improvements at the Company’s production facilities.
The Company anticipates spending approximately $13,000,000 on property, plant and equipment purchases for all of the Company's operations for the year ended December 31, 2024. The Company plans on using cash on hand and cash from operations to finance capital expenditures. At December 31, 2023, purchase commitments for capital expenditures in progress were approximately $1,100,000.
The Company anticipates spending approximately $10,000,000 to $12,000,000 on property, plant and equipment purchases for all of the Company's operations for the year ended December 31, 2025. The Company plans on using cash on hand and cash from operations to finance capital expenditures. At December 31, 2024, purchase commitments for capital expenditures in progress were approximately $2,802,000.
At December 31, 2023, the Company had $24,104,000 of cash on hand, an available revolving line of credit of $25,000,000 and capex line of credit of $25,000,000.
At December 31, 2024, the Company had $41,803,000 of cash on hand, an available revolving line of credit of $25,000,000 and capex line of credit of $25,000,000.
ABR is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50% per annum and (c) Daily Simple SOFR for such day (taking into account any floor set forth in the definition of “Daily Simple SOFR”) plus 1.00% per annum; provided, that if the ABR shall be less than 0.00%, then ABR shall be deemed to be 0.00%. 24 Table of Contents SOFR Loans bear interest at a per annum rate equal to Daily Simple SOFR plus a margin of 180 to 230 basis points determined based on the Company’s leverage ratio.
ABR is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50% per annum and (c) Daily Simple SOFR for such day (taking into account any floor set forth in the definition of “Daily Simple SOFR”) plus 1.00% per annum; provided, that if the ABR shall be less than 0.00%, then ABR shall be deemed to be 0.00%.
As of December 31, 2023, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $9,195,000 and $23,229,000, respectively. At December 31, 2022, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $13,851,000 and $24,479,000, respectively.
As of December 31, 2024, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $29,668,000 and $21,719,000, respectively. At December 31, 2023, the Company had outstanding foreign exchange contracts and interest rate swaps with notional amounts totaling $9,195,000 and $23,229,000, respectively.
Included in total sales were tooling project sales of $18,675,000 and $23,458,000 for the years ended December 31, 2022 and 2021, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis.
Included in total sales were tooling project sales of $11,286,000 and $10,363,000 for the years ended December 31, 2024 and 2023, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis.
Notwithstanding this transition and the completion of existing programs with Volvo, the Company continues to actively bid for new Volvo business, which we believe we will continue to secure outside of the current programs.
Notwithstanding this transition and the completion of existing programs with Volvo, the Company continues to actively bid for new Volvo business, which we believe we will continue to secure outside of the current programs. Going forward we remain focused on continuing to replace phased out business from existing programs with new programs from Volvo or other customers.
The Company performed a qualitative analysis for the years end December 31, 2023, 2022 and 2021, and determined there was no impairment of the Company’s goodwill.
The Company performed its annual impairment test for the years end December 31, 2024 and 2023, and determined there was no impairment of the Company’s goodwill.
As of December 31, 2023 the Company had a net deferred tax asset of $370,000 consisting of net deferred tax asset of $1,595,000 related to tax positions in Mexico, offset by deferred tax liabilities of $1,182,000 and $43,000 related to tax positions in the United States and Canada.
As of December 31, 2024 the Company had a net deferred tax asset of $1,454,000 and $183,000 related to tax positions in Mexico and Canada and deferred tax liabilities of $1,219,000 related to tax positions in the United States.
Management reviews all available evidence, both positive and negative, to assess the long-term earnings potential of the Company using a number of alternatives to evaluate financial results in economic cycles at various industry volume conditions.
Management reviews all available evidence, both positive and negative, to assess the long-term earnings potential of the Company using a number of alternatives to evaluate financial results in economic cycles at various industry volume conditions. The projected availability of taxable income to realize the tax benefits from the reversal of temporary differences before expiration of these benefits are also considered.
Leaf Capital Funding On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment.
Leaf Capital Funding On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The parties agreed to a fixed interest rate of 5.50% and a term of 60 months.
The gross margin percentage increase was due to net changes in selling price and raw material cost of 2.5% and higher fixed cost leverage of 0.8% offset by unfavorable product mix and production inefficiencies of 2.8%. Selling, general and administrative expense ("SG&A") totaled $34,399,000 for the year ended December 31, 2022, compared to $30,276,000 in 2021.
The gross margin percentage decrease was due to lower fixed cost leverage of 1.4% and unfavorable product mix and production inefficiencies of 1.3% offset by net changes in selling price and raw material cost of 2.3%. Selling, general and administrative expense ("SG&A") totaled $36,565,000 for the year ended December 31, 2024, which included severance expense of $1,294,000.
The Company has recorded an estimated liability for self-insured medical, dental and vision claims incurred but not reported and worker’s compensation claims incurred but not reported at December 31, 2023 and December 31, 2022 of $988,000 and $889,000, respectively, included within the Other Current Liabilities on the Company's Consolidated Balance Sheets.
The Company has recorded an estimated liability for self-insured medical, dental and vision claims incurred but not reported and worker’s compensation claims incurred but not reported at December 31, 2024 and December 31, 2023 of $1,087,000 and $988,000, respectively, included within the Other Current Liabilities on the Company's Consolidated Balance Sheets. 28 Table of Contents Post-Retirement Benefits Management records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain retirees.
Cash provided by operating activities totaled $34,842,000 for the year ended December 31, 2023. Net income of $20,324,000 positively impacted operating cash flows. Non-cash deductions included in net income from depreciation and amortization, share based compensation, and deferred incomes taxes amounted to $12,912,000, $2,923,000 and $2,473,000 respectively, positively impacted cash flows.
Cash provided by operating activities totaled $35,151,000 for the year ended December 31, 2024. Net income of $13,299,000 positively impacted operating cash flows. Cash flows were positively impact by non-cash deductions in net income from depreciation and amortization, share based compensation and deferred income taxes of $13,399,000, $2,495,000 and $473,000, respectively.
Post-Retirement Benefits Management records an accrual for post retirement costs associated with the health care plan sponsored by the Company for certain retirees. Should actual results differ from the assumptions used to determine the reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on the Company's operations.
Should actual results differ from the assumptions used to determine the reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on the Company's operations. The effect of a change in healthcare costs is described in Note 14 - Post Retirement Benefits .
Beginning in the second half of 2024 and continuing through 2026, the Company’s business with Volvo will begin transitioning from existing programs that the Company currently supplies to new programs that the Company does not support.
The Company also expects a change in mix in 2025 as compared to 2024 between product revenues and tooling revenues as new programs launch during 2025. During the second half of 2024 and continuing through 2026, the Company’s business with Volvo is transitioning from existing programs that the Company currently supplies to new programs that the Company does not support.
When the Company does not have an enforceable right to payment, the Company recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools. Certain tooling programs include an enforceable right to payment.
In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools. Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation.
The projected availability of taxable income to realize the tax benefits from the reversal of temporary differences before expiration of 28 Table of Contents these benefits are also considered. The Company evaluates provisions and deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available evidence.
The Company evaluates provisions and deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available evidence.
The increase was primarily related to an increase in net income of $7,532,000 and a net increase in post retirement benefit plan adjustments of $1,732,000. 23 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flow The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties.
Comprehensive income totaled $22,572,000 in 2023, compared with comprehensive income of $14,181,000 in 2022. The increase was primarily related to an increase in net income of $8,121,000. 24 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flow The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties.
Business Outlook Looking forward, based on industry analyst projections, customer forecasts, anticipated price changes, as well as anticipated new program launches, offset by current programs that we expect to begin to ramp down in the second half of 2024 as further described below, the Company expects revenues for calendar year 2024 to decrease by approximately 10 to 15 percent as compared to 2023.
Business Outlook Looking forward, based on industry analyst projections, customer forecasts, cyclical demand, and customer programs ramping down throughout 2025, offset by anticipated program launches and price changes, the Company expects revenues for first half of the calendar year 2025 to decrease by approximately 5 to 10 percent as compared to 2024, but remain flat for the full year 2025 as compared to 2024.
Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over time.
Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer. Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product.
In certain circumstances, the Company recognizes revenue from product sales when products are produced and the customer takes control at our production facility. Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer.
Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. In certain circumstances, the Company recognizes revenue from product sales when products are produced and the customer takes control at our production facility.
The following table provides aggregated information about the maturities of contractual obligations and other long-term liabilities as of December 31, 2023: 2024 2025 2026 2027 2028 and after Total Long-term debt $ 1,549,000 $ 1,885,000 $ 2,135,000 $ 17,709,000 $ — $ 23,278,000 Interest (A) 1,066,000 980,000 891,000 596,000 — 3,533,000 Operating lease obligations 2,137,000 1,122,000 594,000 189,000 — 4,042,000 Contractual commitments for capital expenditures 1,100,000 — — — — 1,100,000 Post retirement benefits 156,000 152,000 159,000 144,000 2,505,000 3,116,000 Total $ 6,008,000 $ 4,139,000 $ 3,779,000 $ 18,638,000 $ 2,505,000 $ 35,069,000 (A) Estimated future interest payments based on the effective interest rate as of December 31, 2023.
The following table provides aggregated information about the maturities of contractual obligations and other long-term liabilities as of December 31, 2024: 2025 2026 2027 2028 2029 and after Total Long-term debt $ 1,886,000 $ 2,136,000 $ 17,708,000 $ — $ — $ 21,730,000 Interest (A) 980,000 891,000 596,000 — — 2,467,000 Operating lease obligations 1,267,000 773,000 262,000 — — 2,302,000 Contractual commitments for capital expenditures $ 2,802,000 — — — — 2,802,000 Post retirement benefits 146,000 164,000 180,000 189,000 2,619,000 3,298,000 Total $ 7,081,000 $ 3,964,000 $ 18,746,000 $ 189,000 $ 2,619,000 $ 32,599,000 (A) Estimated future interest payments based on the effective interest rate as of December 31, 2024.
Cash used in financing activities totaled $5,821,000 for the year ended December 31, 2023. Cash activity primarily consisted of the purchase of treasury stock of $2,669,000 in exchange for payment of taxes related to net share settlements of equity awards, net repayments of revolving loans of $1,864,000 and repayments of principal on outstanding term loans of $1,288,000.
Cash activity primarily consisted of the purchase of treasury stock related to the Company's stock buy back plan of $2,939,000, purchase of treasury stock of $1,440,000 in exchange for payment of taxes related to net share settlements of equity awards and repayments of long-term debt of $1,548,000.
Comprehensive income totaled $22,572,000 in 2023, compared with comprehensive income of $14,181,000 in 2022. The increase was primarily related to an increase in net income of $8,121,000. 22 Table of Contents 2022 Compared to 2021 Net sales for the years ended December 31, 2022 and 2021 totaled $377,376,000 and $307,483,000, respectively.
The decrease was primarily related to decreases in net income of $7,025,000, foreign currency hedges of $2,674,000, and post retirement benefit plan adjustments of $2,747,000. 23 Table of Contents 2023 Compared to 2022 Net sales for the years ended December 31, 2023 and 2022 totaled $357,738,000 and $377,376,000, respectively.
The Company's product sales for the year ended December 31, 2022 compared to the same period of 2021 by market are as follows (in thousands): 2022 2021 Medium and heavy-duty truck $ 158,649 $ 114,805 Power sports 84,727 60,230 Building products 41,038 44,981 Industrial and utilities 27,988 27,227 All other 46,299 36,782 Net product revenue $ 358,701 $ 284,025 Gross margin was approximately 13.9% of sales for the year ended December 31, 2022, compared with 13.4% for the year ended December 31, 2021.
The Company's product sales for the year ended December 31, 2024 compared to the same period of 2023 by market are as follows (in thousands): 2024 2023 Medium and heavy-duty truck $ 163,915 181,376 Power sports $ 68,445 84,688 Building products $ 17,011 28,743 Industrial and utilities $ 18,829 23,658 All other $ 22,892 28,910 Net product revenue $ 291,092 $ 347,375 Gross margin was approximately 17.6% of sales for the year ended December 31, 2024, compared with 18.0% for the year ended December 31, 2023.
Going forward we remain focused on continuing to replace phased out business from existing programs with new programs from Volvo or other customers. 21 Table of Contents The Company’s raw material supply chains remain stable, and the Company anticipates raw material pricing in 2024 to remain flat or slightly higher as compared to 2023.
The Company’s raw material supply chains remain stable, and the Company anticipates raw material pricing in 2025 to remain flat or slightly higher as compared to 2024; however, if tariffs are implemented in North America, the Company 22 Table of Contents anticipates raw material cost to increase in 2025 as compared to 2024.
Product sales, excluding tooling project sales, for the year ended December 31, 2022 were $358,701,000 compared to $284,025,000 for the same period in 2021. The increase in sales is primarily the result of higher demand from the heavy-duty truck and power sports industries, price increases related to the recoupment of raw material inflation costs, and launch of new programs.
Product sales, excluding tooling project sales, for the year ended December 31, 2024 were $291,092,000 compared to $347,375,000 for the same period in 2023. The decrease in sales is primarily the result of lower demand from customers in all of the Company's significant markets.
The decrease in interest expense was primarily due to lower interest rates resulting from the Company refinancing its credit facility during 2022, when compared to 2021. Income tax expense was approximately $2,382,000, or 16.3% of total income before income taxes for the year ended December 31, 2022.
Income tax expense was approximately $4,182,000, or 23.9% of total income before income taxes for the year ended December 31, 2024. Income tax expense was approximately $5,422,000, or 21.3% of total income before income taxes for the year ended December 31, 2023.
Removed
Additional factors contributing to our anticipated 2024 revenue outlook include an expected cyclical demand slowdown, decreased customer inventory builds due to stabilizing inventory levels as well as a consumer demand environment that is more consistent with pre-pandemic levels.
Added
Excluding severance expense, SG&A cost for the year ended December 31, 2024 totaled $35,271,000 compared to $37,983,000 in 2023. Decreased SG&A expenses resulted primarily from lower bonus, labor and benefits of $2,380,000 and lower stock compensation of $426,000, offset by higher foreign currency translation of $1,336,000.
Removed
Included in selling, general and administrative (“SG&A”) for the year ended December 31, 2021 are closure costs of $2,027,000 related to the manufacturing facility in Batavia, Ohio. Excluding closing costs, remaining SG&A costs for the year ended December 31, 2021 totaled $28,249,000.
Added
Net interest income totaled $193,000 for the year ended December 31, 2024, compared to net interest expense of $1,011,000 for the year ended December 31, 2023. The Company recognized interest income of $1,443,000 from investment of the Company's accumulated cash balances during the year ended December 31, 2024 compared to $357,000 in 2023.
Removed
The increase in SG&A expense primarily resulted from higher labor and benefit costs of $2,112,000, higher bonus of $1,096,000, higher professional fees of $1,296,000 and higher travel costs of $374,000. During the year ended December 31, 2022, the Company refinanced its existing credit facility.
Added
The increase in tax expense percentage year-over-year was due to increase in foreign taxes and permanent compensation differences, offset by foreign direct investment tax deduction. The Company recorded net income for 2024 of $13,299,000 or $1.51 per diluted share, compared with net income of $20,324,000 or $2.31 per diluted share for 2023.
Removed
As a result, the Company recorded one-time losses of $1,234,000 from writing off outstanding deferred loan costs and $348,000 from prepayment fees associated with the repayment of the FGI Term Loan. Interest expense totaled $1,960,000 for the year ended December 31, 2022, compared to interest expense of $2,311,000 for the year ended December 31, 2021.
Added
Comprehensive income totaled $10,290,000 in 2024, compared with comprehensive income of $22,572,000 in 2023.
Removed
The Company’s income tax expense for the year ended December 31, 2022 includes statutory foreign tax expense from foreign taxable income offset by tax benefits from tax losses in the United States.
Added
Cash used in financing activities totaled $5,927,000 for the year ended December 31, 2024.
Removed
Income tax expense for the year ended December 31, 2022, also includes a valuation allowance reversal of $2,363,000 related to deferred tax assets related to the federal jurisdiction in the United States.
Added
SOFR Loans bear interest at a per annum rate equal to Daily Simple SOFR plus a margin of 180 to 230 basis points determined based on the Company’s leverage ratio.
Removed
Income tax expense for the year ended December 31, 2021 was $4,248,000 and includes statutory foreign tax expense from foreign taxable income offset by tax benefits, net of valuation allowances, for tax losses in the United States.
Added
Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company recognizes tooling revenue at a point in time.
Removed
The Company recorded net income for 2022 of $12,203,000 or $1.44 per basic and diluted share, compared with net income of $4,671,000 or $0.55 per basic and diluted share for 2021. Comprehensive income totaled $14,181,000 in 2022, compared with comprehensive income of $4,371,000 in 2021.
Added
Deferred tax assets are included in "Other non-current assets" on the Consolidated Balance Sheets and deferred tax liabilities are included in "Other non-current liabilities" on the Consolidated Balance Sheets.
Removed
The initial proceeds from the Huntington Credit Agreement were used in part to (i) repay all existing outstanding indebtedness of the Company owing to Wells Fargo Bank, National Association, and FGI Equipment Finance LLC (“FGI”) and (ii) pay certain fees and expenses associated with entering the Huntington Credit Agreement.
Added
Recent Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional 29 Table of Contents information on income taxes paid.
Removed
The parties agreed to a fixed interest rate of 5.50% and a term of 60 months. 25 Table of Contents Wells Fargo Loan On December 31, 2021, the Company had term loans (the "WF Term Loans") and a revolving loan (the "WF Revolving loan") with Wells Fargo Bank, National Association, with balances of $13,992,000 and $4,424,000, respectively.
Added
The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. As this accounting standard only impacts disclosure, it will not have a material impact on the Company's Consolidated Financial Statements.
Removed
The Company’s term and revolving loans had variable interest rates on December 31, 2021 of 3.77% and 4.25%, respectively. On July 22, 2022, all existing outstanding indebtedness of the Company owed to Wells Fargo Bank, National Association was repaid in full as part of the Huntington Credit Agreement.
Removed
FGI Equipment Finance LLC Term Loan On December 31, 2021, the Company had a term loan (the "FGI Term Loan"), evidenced by a promissory note (the "FGI Note") with FGI, with a balance of $12,561,000. The Company’s term loan had a fixed interest rate of 8.25% at December 31, 2021.
Removed
On July 22, 2022, all existing outstanding indebtedness of the Company owed to FGI was repaid in full as part of the Huntington Credit Agreement. At December 31, 2022, the company recorded losses of $1,234,000 from writing off outstanding deferred loan costs and approximately $348,000 from prepayment fees associated with the FGI Term Loan.
Removed
Revenue Recognition The Company historically has recognized revenue from two streams, product revenue and tooling revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products. Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment.
Removed
In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation.
Removed
Recent Accounting Pronouncements Current expected credit loss (CECL) In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments.
Removed
For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and generally will result in the earlier recognition of allowances for losses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssuming a hypothetical 10% change in short-term interest rates, interest paid on the Company’s Revolving Loan and Term Loan would impact the interest paid by the Company, as the interest rate on these loans is based upon SOFR; however, it would not have a material effect on earnings before taxes.
Biggest changeThe prices and availability of these materials are affected by the prices of crude oil, natural gas and other feedstocks, tariffs, as well as processing capacity versus demand. Assuming a hypothetical 10% change in short-term interest rates, interest paid on the Term Loan would be impacted, as the interest rate on these loans is based upon SOFR.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Core Molding Technologies’ primary market risk results from changes in the price of commodities used in its manufacturing operations. Core Molding Technologies is also exposed to fluctuations in interest rates and foreign currency fluctuations associated with the Mexican Peso and Canadian Dollar.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's primary market risk results from changes in the price of commodities used in its manufacturing operations. Core Molding Technologies is also exposed to fluctuations in interest rates and foreign currency fluctuations associated with the Mexican Peso and Canadian Dollar.
Assuming a hypothetical 10% decrease in the United States dollar to Mexican Peso or Canadian Dollar exchange rates, the Company would be impacted by an increase in operating costs, which would have an adverse effect on operating margins.
Assuming a hypothetical 10% decrease in the United States Dollar to Mexican Peso and Canadian Dollar exchange rate, the Company would be impacted by an increase in operating costs, which would have an adverse effect on operating margins.
Assuming a hypothetical 10% increase in raw material costs, Core Molding Technologies would be impacted, which would have an adverse effect on operating margins. 29 Table of Contents
Assuming a hypothetical 10% increase in commodity prices, Core Molding Technologies would be impacted by an increase in raw material costs, which would have an adverse effect on operating margins. 30 Table of Contents
Core Molding Technologies has the following three items that are sensitive to market risks at December 31, 2023: (1) Term Loans and Revolving Loan which bear a variable interest rate; (2) foreign currency purchases in which the Company purchases Mexican Pesos or Canadian Dollars with United States dollars to meet certain obligations that arise due to operations at the facilities located in Mexico or Canada; and (3) raw material purchases in which Core Molding Technologies purchases various resins and fiberglass for use in production.
The Company has the following three items that are sensitive to market risks: (1) non-hedged loans under the Huntington Credit Agreement, all of which bear a variable interest rate; (2) non-hedged foreign currency purchases in which the Company purchases Mexican Pesos and Canadian Dollars with United States Dollars to meet certain obligations; and (3) raw material purchases in which the Company purchases various resins, fiberglass, and metal components for use in production.
Core Molding Technologies does not hold any material market risk sensitive instruments for trading purposes.
The Company does not hold any material market risk sensitive instruments for trading purposes. The Company uses derivative financial instruments to hedge exposure to fluctuations in foreign exchange rates and interest rates.
Removed
The prices and availability of these materials are affected by the prices certain feedstocks, transportation costs, as well as processing capacity versus demand.
Added
It would not, however, have a material effect on earnings before tax as the Company has entered into a hedge to offset changes in SOFR.

Other CMT 10-K year-over-year comparisons