Core Molding Technologies (CMT) 15th Annual Midwest IDEAS Investor Conference summary

Business transformation and strategy

• Major transformation over recent years has improved profitability and diversified revenue streams.

• Focus on market leadership in fiber-reinforced plastics and composites, with high barriers to entry and proprietary, highly engineered products.

• 90% of revenues are recurring, with long-term programs and strong customer loyalty, especially in powersports and truck markets.

• Growth initiatives include expanding into golf cars, construction/agriculture, and consumer packaging, with in-house paint capabilities being added.

• Strategic focus on cross-selling, wallet share growth, and vertical-specific sales teams, with a new chief commercial officer to drive targeted growth.

Operational excellence and innovation

• Emphasis on execution, operational systems, and succession planning has driven the turnaround and current growth.

• Product innovation centers on design for manufacturability, combining thermoset and thermoplastic processes for unique customer solutions.

• Lightweighting and composite solutions offer significant installation and cost advantages over traditional materials in infrastructure and utilities.

• New federally mandated underbody protection for ATVs, UTVs, and golf carts launches next year, with prototypes completed and testing underway.

• Culture and low employee turnover (8.6% vs. 23.3% industry average) are seen as key competitive advantages.

Financial performance and capital allocation

• Sales peaked in 2022 due to COVID-driven demand, with normalization and economic slowdown leading to lower revenues in 2023 and 2024.

• Adjusted EBITDA at $36.7 million (11%), return on capital employed at 12.1%, and $37 million in cash available for redeployment.

• Capital allocation priorities: organic growth, targeted acquisitions (especially in the western US/Mexico), share buybacks, and maintaining a strong balance sheet with net zero debt.

• $7.5 million share buyback program initiated to offset equity compensation dilution.

• Long-term financial goals include reaching $500 million in revenue (via acquisitions), 7.8%-10% operating income, and 14%-16% return on capital employed.