SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from _____________ To _____________
Commission File Number 001-12505
CORE MOLDING TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1481870
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(State or other jurisdiction (I.R.S. Employer Identification No.)
incorporation or organization)
800 Manor Park Drive, P.O. Box 28183
Columbus, Ohio 43228-0183
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (614) 870-5000
N/A
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act).
Yes [ ] NO [X]
As of November 15, 2004, the latest practicable date, 9,778,680 shares of
the registrant's common stock were issued and outstanding.
PART 1 - FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
2004 2003
-------------- --------------
ASSETS
Cash and cash equivalents $ 557,007 $ 346,191
Accounts receivable (less allowance for doubtful accounts:
September 30, 2004 - $228,000; December 31, 2003 - $379,000) 18,236,704 12,830,356
Inventories:
Finished and work in process goods 2,015,129 2,028,702
Stores 4,074,046 2,823,243
-------------- --------------
Total inventories 6,089,175 4,851,945
Deferred tax asset 1,381,935 1,381,935
Foreign sales tax receivable 1,616,829 1,746,698
Prepaid expenses and other current assets 1,108,384 408,467
-------------- --------------
Total current assets 28,990,034 21,565,592
Property, plant and equipment 45,139,469 43,856,499
Accumulated depreciation (22,100,316) (20,647,567)
-------------- --------------
Property, plant and equipment - net 23,039,153 23,208,932
Deferred tax asset - net 8,764,544 9,888,287
Goodwill 1,097,433 1,097,433
Customer list 220,800 -
Other assets 351,169 391,279
-------------- --------------
TOTAL $ 62,463,133 $ 56,151,523
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Current liabilities
Current portion of long-term debt $ 1,930,716 $ 1,905,714
Line of credit 585,000 -
Current portion of deferred gain 453,555 453,555
Accounts payable 10,000,558 6,581,912
Accrued liabilities:
Compensation and related benefits 3,066,540 2,669,027
Taxes 496,342 361,215
Current portion of graduated lease payments 229,269 229,269
Other accrued liabilities 987,802 820,684
-------------- --------------
Total current liabilities 17,749,782 13,021,376
Long-term debt 11,807,140 12,999,286
Interest rate swaps 600,842 610,142
Graduated lease payments 543,663 715,616
Deferred long-term gain 761,442 1,101,607
Postretirement benefits liability 7,807,746 6,849,418
STOCKHOLDERS' EQUITY:
Preferred stock - $0.01 par value, authorized shares - 10,000,000;
Outstanding shares: September 30, 2004 and December 31, 2003 - 0 - -
Common stock - $0.01 par value, authorized shares - 20,000,000;
Outstanding shares: September 30, 2004 and December 31, 2003 -
9,778,680 shares 97,787 97,787
Paid-in capital 19,251,392 19,251,392
Accumulated other comprehensive loss, net of income tax effect (396,555) (402,694)
Retained earnings 4,239,894 1,907,593
-------------- --------------
Total stockholders' equity 23,192,518 20,854,078
-------------- --------------
TOTAL $ 62,463,133 $ 56,151,523
============== ==============
See notes to condensed consolidated financial statements
2
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- --------------------------------
2003 2003
(AS RESTATED, (AS RESTATED,
2004 SEE NOTE 7) 2004 SEE NOTE 7)
-------------- -------------- -------------- --------------
NET SALES
Products $ 24,923,582 $ 19,290,263 $ 75,318,864 $ 59,328,214
Tooling 1,004,072 44,542 1,456,871 10,690,813
-------------- -------------- -------------- --------------
Total Sales 25,927,654 19,334,805 76,775,735 70,019,027
-------------- -------------- -------------- --------------
Cost of sales 22,101,202 16,266,272 63,092,105 58,022,744
Postretirement benefits expense 460,818 363,841 1,261,605 1,087,279
-------------- -------------- -------------- --------------
Total cost of sales 22,562,020 16,630,113 64,353,710 59,110,023
-------------- -------------- -------------- --------------
GROSS MARGIN 3,365,634 2,704,692 12,422,025 10,909,004
-------------- -------------- -------------- --------------
Selling, general and administrative expense 2,354,693 2,213,283 7,785,464 6,916,493
Postretirement benefits expense 75,017 96,717 244,806 259,105
-------------- -------------- -------------- --------------
Total selling, general and administrative
expense 2,429,710 2,310,000 8,030,270 7,175,598
INCOME BEFORE INTEREST AND TAXES 935,924 394,692 4,391,755 3,733,406
Interest income 1,596 17,940 5,000 62,785
Interest expense (209,176) (429,681) (682,469) (1,365,488)
-------------- -------------- -------------- --------------
INCOME (LOSS) BEFORE INCOME TAXES 728,344 (17,049) 3,714,286 2,430,703
Income taxes:
Current 56,548 20,557 261,404 162,015
Deferred 194,097 (32,115) 1,120,581 789,448
-------------- -------------- -------------- --------------
Total income taxes 250,645 (11,558) 1,381,985 951,463
-------------- -------------- -------------- --------------
NET (LOSS) INCOME $ 477,699 $ (5,491) $ 2,332,301 $ 1,479,240
============== ============== ============== ==============
NET INCOME PER COMMON SHARE
Basic $ 0.05 $ (0.00) $ 0.24 $ 0.15
Diluted $ 0.05 $ (0.00) $ 0.24 $ 0.15
============== ============== ============== ==============
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 9,778,680 9,778,680 9,778,680 9,778,680
Diluted 9,789,175 9,778,680 9,837,825 9,778,680
============== ============== ============== ==============
See notes to condensed consolidated financial statements
3
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
ACCUMULATED
COMMON STOCK OTHER TOTAL
OUTSTANDING PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) EQUITY
--------- -------------- -------------- -------------- -------------- --------------
BALANCE AT JANUARY 1, 2004 9,778,680 $ 97,787 $ 19,251,392 $ 1,907,593 $ (402,694) $ 20,854,078
Net Income 2,332,301 2,332,301
Hedge accounting effect of the
interest rate swaps at September 30,
2004, net of deferred income tax
expense of $3,162 6,139 6,139
--------- -------------- -------------- -------------- -------------- --------------
BALANCE AT SEPTEMBER 30, 2004 9,778,680 $ 97,787 $ 19,251,392 $ 4,239,894 $ (396,555) $ 23,192,518
========= ============== ============== ============== ============== ==============
See notes to condensed consolidated financial statements.
4
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
2003
(AS RESTATED,
2004 SEE NOTE 7)
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,332,301 $ 1,479,240
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,537,972 1,601,695
Deferred income taxes 1,120,581 789,448
Loss on disposal of assets 16,600 27,298
Amortization of gain on sale/leaseback transactions (340,165) (340,166)
Change in operating assets and liabilities:
Accounts receivable (5,406,348) (2,503,724)
Inventories (1,093,080) (845,205)
Prepaid and other assets (530,011) (91,379)
Accounts payable 3,418,646 3,148,619
Accrued and other liabilities 527,805 208,354
Postretirement benefits liability 958,328 990,000
------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,542,629 4,464,180
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (1,135,929) (1,303,960)
Acquisition of Keystone Restyling assets (526,360) -
Proceeds from maturities of mortgage-backed security investment 1,032 4,420
------------- -------------
NET CASH USED IN INVESTING ACTIVITIES (1,661,257) (1,299,540)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit 585,000 -
Payments of principal on secured note payable (857,144) (1,860,862)
Payments of principal on industrial revenue bond (310,000) (290,000)
------------- -------------
NET CASH USED IN FINANCING ACTIVITIES (582,144) (2,150,862)
Effect of foreign currency on cash and cash equivalents (88,412) 89,378
------------- -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 210,816 1,103,156
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 346,191 8,976,059
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 557,007 $ 10,079,215
============= =============
Cash paid for:
Interest - net of capitalized interest of $0 and
$64,816 in 2004 and 2003, respectively $ 636,998 $ 988,123
============= =============
Income taxes (refund) $ 257,502 $ (173,907)
============= =============
See notes to condensed consolidated financial statements.
5
CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and include all
of the information and disclosures required by accounting principles generally
accepted in the United States of America for interim reporting, which are less
than those required for annual reporting. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements contain all
adjustments (all of which are normal and recurring in nature) necessary to
present fairly the financial position of Core Molding Technologies, Inc. and its
subsidiaries ("Core Molding Technologies") at September 30, 2004, and the
results of their operations and cash flows. The "Consolidated Notes to Financial
Statements", which are contained in the 2003 Annual Report to Shareholders,
should be read in conjunction with these condensed consolidated financial
statements.
Core Molding Technologies and its subsidiaries operate in the plastics
market in a family of products known as "reinforced plastics". Reinforced
plastics are combinations of resins and reinforcing fibers (typically glass or
carbon) that are molded to shape. The Columbus, Ohio and Gaffney, South Carolina
facilities produce reinforced plastics by compression molding sheet molding
compound ("SMC") in a closed mold process. The Matamoros, Mexico facility
produces reinforced plastic products by spray-up and hand-lay-up open mold
processes and vacuum assisted resin infused ("VRIM") closed mold process. In
September 2004, Core Molding Technologies acquired substantially all of the
assets of Keystone Restyling Products, Inc. (see Note 6).
STOCK BASED COMPENSATION - Core Molding Technologies accounts for its stock
option plans in accordance with Accounting Principles Board ("APB") Opinion No.
25, under which no compensation cost has been recognized. Had compensation cost
for all stock option plans been determined consistent with the requirements of
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock Based Compensation," Core Molding Technologies' net income and earnings
per common share would have resulted in the amounts as reported below:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Net income (loss) as reported $ 477,699 $ (5,491) $ 2,332,301 $ 1,479,240
Deduct: Total stock-based employee
compensation (expense) income
determined under fair value based
method for all awards, net of related
tax effects (40,848) 1,224,460 (1,124,783) 1,070,893
------------- ------------- ------------- -------------
Pro forma net income $ 436,851 $ 1,218,969 $ 1,207,518 $ 2,550,133
============= ============= ============= =============
Earnings per share:
Basic - as reported $ 0.05 $ 0.00 $ 0.24 $ 0.15
Basic - pro forma $ 0.04 $ 0.11 $ 0.12 $ 0.26
Diluted - as reported $ 0.05 $ 0.00 $ 0.24 $ 0.15
Diluted - pro forma $ 0.04 $ 0.11 $ 0.12 $ 0.26
On August 4, 2003, of the 1,171,500 stock options outstanding, 978,000
options were tendered for cancellation. Core Molding Technologies issued 855,950
options on February 9, 2004, at $3.21 per share.
6
2. EARNINGS PER COMMON SHARE
Basic earnings per common share is computed based on the weighted average
number of common shares outstanding during the period. Diluted earnings per
common share are computed similarly but include the effect of the assumed
exercise of dilutive stock options under the treasury stock method.
The computation of basic and diluted earnings per common share is as
follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net income (loss) $ 477,699 $ (5,491) $ 2,332,301 $ 1,479,240
Weighted average common
shares outstanding 9,778,680 9,778,680 9,778,680 9,778,680
Plus: dilutive options assumed exercised 121,500 0 871,885 0
Less: shares assumed repurchased with
proceeds from exercise (111,005) 0 (812,740) 0
----------- ----------- ----------- -----------
Weighted average common and potentially
issuable common shares outstanding 9,789,175 9,778,680 9,837,825 9,778,680
Basic earnings per common share $ 0.05 $ 0.00 $ 0.24 $ 0.15
Diluted earnings per common share $ 0.05 $ 0.00 $ 0.24 $ 0.15
For the three and nine months ended September 30, 2004, there were 894,800
and 20,000 antidilutive options, respectively. For the three and nine months
ended September 30, 2003 there were 1,170,000 antidilutive options.
3. MAJOR CUSTOMERS
Core Molding Technologies currently has three major customers,
International Truck & Engine Corporation ("International"), Freightliner, LLC
("Freightliner") and Yamaha Motor Corporation ("Yamaha"). The following table
presents net sales for the above-mentioned customers for the three and nine
months ended September 30, 2004 and September 30, 2003:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
International $14,123,020 $10,018,394 $40,948,665 $39,887,015
Freightliner 4,191,227 2,463,959 10,206,119 6,886,719
Yamaha 1,962,415 2,601,340 9,878,162 10,235,319
----------- ----------- ----------- -----------
Subtotal 20,276,662 15,083,693 61,032,946 57,009,053
Other 5,650,992 4,251,112 15,742,789 13,009,974
----------- ----------- ----------- -----------
Total $25,927,654 $19,334,805 $76,775,735 $70,019,027
=========== =========== =========== ===========
7
4. COMPREHENSIVE INCOME
Comprehensive income represents net income plus the results of certain
non-shareholders' equity changes not reflected in the Statement of Operation.
The components of comprehensive income, net of tax, are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net income (loss) $ 477,699 $ (5,491) $2,332,301 $1,479,240
Hedge accounting effect of interest
rate swaps, net of tax benefit of $58,771
and expense of $45,207 for the three
months ended September 30, respectively;
and tax expense of $3,162 and $23,632
for the nine months ended September 30,
respectively (114,085) 87,754 6,139 45,874
---------- ---------- ---------- ----------
Comprehensive income $ 363,614 $ 82,263 $2,338,440 $1,525,114
========== ========== ========== ==========
5. POSTRETIREMENT BENEFITS
The components of expense for all of Core Molding Technologies'
postretirement benefits plans for the three and nine months ended September 30,
2004 and 2003 are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Pension Expense:
Interest cost $ 4,000 $ 4,000 $ 12,000 $ 12,000
Defined contribution plan
Contributions 115,000 56,000 222,000 171,000
Multi-employer plan
Contributions 77,000 70,000 217,000 172,000
---------- ---------- ---------- ----------
Total pension expense 196,000 130,000 451,000 355,000
---------- ---------- ---------- ----------
Health and Life Insurance:
Service cost 165,000 146,000 482,000 438,000
Interest cost 105,000 160,000 451,000 480,000
Amortization of net loss 70,000 24,000 122,000 72,000
---------- ---------- ---------- ----------
Net periodic benefit cost 340,000 330,000 1,055,000 990,000
---------- ---------- ---------- ----------
Total postretirement benefits
expense $ 536,000 $ 460,000 $1,506,000 $1,345,000
========== ========== ========== ==========
Core Molding Technologies expects to make approximately $68,000 of pension
payments through the remainder of 2004.
In May 2004, the Financial Accounting Standards Board ("FASB") staff issued
FASB Staff Position 106-2, "Accounting and Disclosure Requirements Related
to the Medicare Prescription Drug, Improvement and Modernization Act of 2003"
(the "Act"). Core Molding Technologies adopted the provisions of the Act in the
third quarter of 2004. The adoption of the provisions of the Act increased net
income for the three and nine months ended September 30, 2004 by $39,300 and
$117,900, respectively.
8
6. ACQUISITIONS
In September 2004, Core Molding Technologies purchased substantially all of
the assets consisting primarily of inventory and equipment, of Keystone
Restyling Products, Inc. for $526,360. Core Molding Technologies may be required
to pay contingent cash payments based on certain earnings threshold of the
acquired business during the three-year period beginning January 1, 2005, and
continuing through December 31, 2007. Such additional costs will be recorded as
an intangible asset.
The acquisition was recorded using the purchase method of accounting.
Accordingly, the purchase price has been allocated to tangible and identified
intangible assets acquired based on a preliminary estimate of the fair values at
the date of acquisition. Upon completion of the appraisals the recorded values
could be adjusted. If the acquisition had occurred at January 1, 2004, the
operating results of Keystone Restyling Products, Inc. would not have been
significant to the Company.
The following table presents the allocation of the purchase price:
Inventory $ 145,110
Property and equipment 160,450
Customer list 220,800
-----------
Total purchase price $ 526,360
===========
Core Molding Technologies will amortize the customer list on a
straight-line basis over sixty months. Amortization expense is expected to be
$11,040 in 2004, $44,160 in 2005 through 2008 and $33,120 in 2009.
7. RESTATEMENT
Subsequent to the issuance of Core Molding Technologies' condensed
consolidated financial statements for the period ended September 30, 2003, Core
Molding Technologies determined that inventory was overstated as a result of
incorrect accounting entries in connection with the results of prior physical
inventory observations at Core Molding Technologies' Gaffney, South Carolina
facility. Accordingly, the condensed consolidated financial statements for the
three and nine months ended September 30, 2003 have been restated from amounts
previously reported.
A summary of significant effects of the restatement are as follows:
For the three months ended For the nine months ended
September 30, 2003 September 30, 2003
------------------------------ -----------------------------
As previously As previously
reported As restated reported As restated
------------- ------------- ------------- -------------
INCOME STATEMENT DATA:
Cost of sales $ 16,167,272 $ 16,266,272 $ 57,669,744 $ 58,022,744
Total cost of sales 16,531,113 16,630,113 58,757,023 59,110,023
Gross margin 2,803,692 2,704,692 11,262,004 10,909,004
Income before interest
and taxes 493,692 394,692 4,086,406 3,733,406
Income (loss) before taxes 81,951 (17,049) 2,783,703 2,430,703
Current income taxes 57,979 20,557 295,449 162,015
Total income tax (benefit) 25,864 (11,558) 1,084,897 951,463
Net income (loss) 56,087 (5,491) 1,698,806 1,479,240
Basic and diluted earnings
(loss) per common share $ 0.01 $ (0.00) $ 0.17 $ 0.15
9
PART I - FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
As discussed in Note 7 to Core Molding Technologies' condensed consolidated
financial statements, Core Molding Technologies' financial statements for the
quarter and year to date ended September 30, 2003 have been restated. This
Management's Discussion and Analysis of Financial Condition and Results of
Operations gives effect to the restatement.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements within the meaning of
the federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives or performance as opposed to
historical items and include statements of anticipated events or trends and
expectations and beliefs relating to matters not historical in nature. Such
forward-looking statements involve known and unknown risks and are subject to
uncertainties and factors relating to Core Molding Technologies' operations and
business environment, all of which are difficult to predict and many of which
are beyond Core Molding Technologies' control. These uncertainties and factors
could cause Core Molding Technologies' actual results to differ materially from
those matters expressed in or implied by such forward-looking statements.
Core Molding Technologies believes that the following factors, among
others, could affect its future performance and cause actual results to differ
materially from those expressed or implied by forward-looking statements made in
this report: business conditions in the plastics, transportation, watercraft and
commercial product industries; general economic conditions in the markets in
which Core Molding Technologies operates; dependence upon three major customers
as the primary source of Core Molding Technologies' sales revenues; recent
efforts of Core Molding Technologies to expand its customer base; failure of
Core Molding Technologies' suppliers to perform their contractual obligations;
the availability of raw materials; inflationary pressures; new technologies;
competitive and regulatory matters; labor relations; the loss or inability of
Core Molding Technologies to attract key personnel; the availability of capital;
the ability of Core Molding Technologies to provide on-time delivery to
customers, which may require additional shipping expenses to ensure on-time
delivery or otherwise result in late fees; risk of cancellation or rescheduling
of orders; and management's decision to pursue new products or businesses which
involve additional costs, risks or capital expenditures.
OVERVIEW
Core Molding Technologies is a compounder of sheet molding composite
("SMC") and molder of fiberglass reinforced plastics. Core Molding Technologies
produces high quality fiberglass reinforced molded products and SMC materials
for varied markets, including light, medium and heavy-duty trucks, automobiles
and automotive aftermarkets, personal watercraft and other commercial products.
The demand for Core Molding Technologies' products is affected by economic
conditions in the United States, Canada and Mexico. Core Molding Technologies'
manufacturing operations have a significant fixed cost component. Accordingly,
during periods of changing demands, the profitability of Core Molding
Technologies' operations may change proportionately more than revenues from
operations.
On December 31, 1996, Core Molding Technologies acquired substantially all
of the assets and assumed certain liabilities of Columbus Plastics, a wholly
owned operating unit of International Truck & Engine Corporation's
("International") truck manufacturing division since its formation in late 1980.
Columbus Plastics, located in Columbus, Ohio, was a compounder and compression
molder of SMC. In 1998, Core Molding Technologies began compression molding
operations at its second facility in Gaffney, South Carolina, and in October
2001, Core Molding Technologies acquired certain assets of Airshield
Corporation. As a result of this acquisition, Core Molding Technologies expanded
its fiberglass molding capabilities to include the spray up, hand-lay-up and
vacuum assisted resin infusion molding processes. In September 2004, Core
Molding Technologies acquired substantially all the operating assets of Keystone
Restyling Products, Inc. a privately held manufacturer and distributor of
fiberglass reinforced products for the automotive-aftermarket industry.
10
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2004, AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2003
Net sales for the three months ended September 30, 2004 totaled
$25,928,000, representing an approximate 34% increase from the $19,335,000
reported for the three months ended September 30, 2003. The primary reason for
the increase in sales is due to the positive impact general economic conditions
have had on the demand for medium and heavy-duty trucks as well as an increase
in tooling revenue. Revenue from tooling projects totaled $1,004,000 for the
three months ended September 30, 2004. Tooling project revenues for the three
months ended September 30, 2003, totaled $45,000. Tooling project revenues are
sporadic in nature and do not represent a recurring trend. Total product sales
revenue, excluding tooling project revenue, was higher by approximately 29% for
the three months ended September 30, 2004, as compared to September 30, 2003.
Sales to International for the three months ended September 30, 2004 were
$14,123,000, as compared to the three months ended September 30, 2003 of
$10,018,000. The primary reason for the increase is the same as stated above.
Sales to Freightliner increased by $1,727,000 for the three months ended
September 30, 2004 compared to the same time period a year ago. The primary
reasons for this increase were due to the recognition of tooling revenues of
$684,000 and increased order volumes. Sales to Yamaha decreased by approximately
$639,000 for the three months ended September 30, 2004, compared to the same
time a year ago. The primary reason for this decrease was due to an extended
shutdown period by Yamaha in July and August 2004 compared to the same period in
2003.
Sales to other customers for the three months ended September 30, 2004,
increased approximately 33% to $5,651,000 from $4,251,000 for the three months
ended September 30, 2003. The increase in sales was primarily due to the
positive impact general economic conditions have had on the demand for medium
and heavy-duty trucks, as well as the addition of new customers at Core Molding
Technologies' Matamoros facility.
Gross margin was approximately 13.0% of sales for the three months ended
September 30, 2004, compared with 14.0% for the three months ended September 30,
2003. Increases in production volumes in the third quarter of 2004 compared to
2003 has allowed Core Molding Technologies to better absorb its fixed costs
associated with capacity. The benefit gained by the increase in capacity has
been offset by additional costs incurred as a result of a nine day strike at
Core Molding Technologies' Columbus plant, inefficiencies related to material
usage and increases in raw material costs, primarily due to price increases for
resin which is a significant component of SMC. Due to the cost of crude oil and
natural gas, resin prices have increased and are expected to continue to rise
into 2005.
Selling, general and administrative expenses ("SG&A") totaled $2,430,000
for the three months ended September 30, 2004 increasing from the $2,310,000
reported for the three months ended September 30, 2003. The primary reasons for
this increase were due to increases in professional and outside services of
$211,000. These increases were partially offset by decreases in accruals for
certain employee benefits.
Interest expense totaled $209,000 for the three months ended September 30,
2004, decreasing from $430,000 for the three months ended September 30, 2003.
The primary reason for the decrease was due to the refinancing of Core Molding
Technologies' long-term debt with International Truck and Engine Corporation in
December 2003. Interest rates experienced by Core Molding Technologies with
respect to its long-term borrowings were favorable; however, due to the interest
rate swaps Core Molding Technologies entered into, the interest rate is
essentially fixed for these debt instruments.
Income taxes for the three months ended September 30, 2004, are estimated
to be approximately 34% of total earnings before taxes. Actual tax payments will
be lower than the recorded expenses as Core Molding Technologies has substantial
federal tax loss carryforwards. These loss carryforwards were recorded as a
deferred tax asset. As the tax loss carryforwards are utilized to offset federal
income tax payments, Core Molding Technologies reduces the deferred tax asset as
opposed to recording a reduction in income tax expense.
Net income for the three months ended September 30, 2004 was $478,000, or
$.05 per basic and diluted share, representing an increase of $483,000 over the
net loss for the three months ended September 30, 2003, of $5,000, or $0.00 per
basic and diluted share.
11
NINE MONTHS ENDED SEPTEMBER 30, 2004, AS COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2003
Net sales for the nine months ended September 30, 2004 totaled $76,776,000,
representing an approximate 10% increase from the $70,019,000 reported for the
nine months ended September 30, 2003. Revenue from tooling projects totaled
$1,457,000 for the nine months ended September 30, 2004. Tooling project
revenues for the nine months ended September 30, 2003, totaled $10,690,000.
Tooling project revenues are sporadic in nature and do not represent a recurring
trend. Total product sales revenue, excluding tooling project revenue, was
higher by approximately 27% for the nine months ended September 30, 2004, as
compared to September 30, 2003. The primary reason for this increase was due to
the positive impact general economic conditions have had on the demand for
medium and heavy-duty trucks. Sales to International for the nine months ended
September 30, 2004 were $40,949,000, as compared to the nine months ended
September 30, 2003 of $39,887,000. Total product sales revenue, excluding
tooling project revenues, to International was higher by approximately 38% for
the nine months ended September 30, 2004, as compared to September 30, 2003.
Sales to Freightliner increased by $3,319,000 for the nine months ended
September 30, 2004 compared to the same time period a year ago. The primary
reason for this increase was due to the reason noted above and having the full
impact for the nine months of products that went into production in the first
and second quarter of 2003.
Sales to other customers for the nine months ended September 30, 2004,
increased approximately 21% to $15,743,000 from $13,010,000 for the nine months
ended September 30, 2003. The increase in sales was primarily due to the
positive impact general economic conditions have had on the demand for medium
and heavy-duty trucks, as well as the addition of new customers at Core Molding
Technologies' Matamoros facility.
Gross margin was approximately 16.2% of sales for the nine months ended
September 30, 2004, compared with 15.6% for the nine months ended September 30,
2003. The increase in gross margin, as a percentage of sales from the prior
year, was due to a combination of many factors. The primary reason for the
increase was the dilutive effect of tooling project revenue on the prior
period's gross margin. Historically, Core Molding Technologies has not achieved
margins on tooling projects similar to margins on its sales of SMC and molded
products. Increases in production volumes added to the increased gross margin
for the current period, as Core Molding Technologies was better able to absorb
its fixed cost of production. The benefit gained by the increase in capacity has
been partially offset by additional costs incurred as a result of a nine day
strike at Core Molding Technologies' Columbus plant, inefficiencies related to
material usage and increases in raw material costs, primarily due to price
increases for resin which is a significant component of SMC. Due to the cost of
crude oil and natural gas, resin prices have increased and are expected to
continue to rise into 2005.
Selling, general and administrative expenses ("SG&A") totaled $8,030,000
for the nine months ended September 30, 2004, increasing from $7,176,000 for the
nine months ended September 30, 2003. The primary reasons for this increase were
increases in professional fees and outside services of $790,000.
Interest expense totaled $682,000 for the nine months ended September 30,
2004, decreasing from $1,365,000 for the nine months ended September 30, 2003.
The primary reason for the decrease was due to the refinancing of Core Molding
Technologies' long-term debt with International Truck and Engine Corporation in
December 2003. Interest rates experienced by Core Molding Technologies with
respect to its long-term borrowings were favorable; however, due to the interest
rate swaps Core Molding Technologies entered into, the interest rate is
essentially fixed for these debt instruments.
Income taxes for the nine months ended September 30, 2004, are estimated to
be approximately 37% of total earnings before taxes. Actual tax payments will be
lower than the recorded expenses as Core Molding Technologies has substantial
federal tax loss carryforwards. These loss carryforwards were recorded as a
deferred tax asset. As the tax loss carryforwards are utilized to offset federal
income tax payments, Core Molding Technologies reduces the deferred tax asset as
opposed to recording a reduction in income tax expense.
Net income for the nine months ended September 30, 2004, was $2,332,000, or
$.24 per basic diluted share, representing an increase of $853,000 over the net
income for the nine months ended September 30, 2003, of $1,479,000, or $.15 per
basic and diluted share.
12
LIQUIDITY AND CAPITAL RESOURCES
Core Molding Technologies' primary cash requirements are for operating
expenses and capital expenditures. These cash requirements have historically
been met through a combination of cash flow from operations, equipment leasing,
issuance of Industrial Revenue Bonds and bank lines of credit.
Cash provided by operating activities for the nine months ended September
30, 2004, totaled $2,543,000. Net income increased operating cash flows by
$2,332,000. Non-cash deductions of depreciation and amortization added
$1,538,000 to positive cash flow. Also adding to positive cash flow was an
increase in accounts payable of $3,419,000 due to timing differences. In
addition, the increase in the postretirement healthcare benefits liability of
$958,000 is not a current cash obligation, and this item will not be a cash
obligation until retirees begin to utilize their retirement medical benefits. A
decrease in deferred income taxes also had a positive impact on operating cash
flows of $1,121,000, which is a result of Core Molding Technologies' net
operating loss carryforwards reducing current year tax obligations. Partially
offsetting the above mentioned increases in operating cash flows were increases
in accounts receivable of $5,406,000, which is primarily related to increased
sales volume, and inventories of $1,093,000, which is a result of increased
production to meet current sales volume.
Cash used for investing activities was $1,661,000 for the nine months ended
September 30, 2004. Capital expenditures totaled $1,136,000, which was primarily
related to the acquisition of machinery and equipment. Core Molding Technologies
anticipates spending an additional $500,000 for the remainder of 2004 for
capital projects. Investing cash flows were also used for the purchase of
substantially all of the assets of Keystone Restyling Products, Inc. for
$526,000 (see Note 6 to the condensed consolidated financial statements).
Financing activities reduced cash flow by $582,000 due to regularly
scheduled payments on the secured note payable of $857,000 and on the Industrial
Revenue Bond of $310,000. These payments were partially offset by borrowings on
the line of credit of $585,000.
At September 30, 2004, Core Molding Technologies had cash on hand of
$557,000 and an available line of credit of $7,500,000, which is scheduled to
mature on April 30, 2005. At September 30, 2004, Core Molding Technologies had
outstanding borrowing on the line of credit of $585,000. Management expects
these resources to be adequate to meet Core Molding Technologies' liquidity
needs. As of September 30, 2004, Core Molding Technologies was in compliance
with its two financial debt covenants for the Line of Credit and letter of
credit securing the Industrial Revenue Bond and certain equipment leases. The
covenants relate to maintaining certain financial ratios. Management expects
Core Molding Technologies to meet these covenants for the year 2004. However, if
a material adverse change in the financial position of Core Molding Technologies
should occur, Core Molding Technologies' liquidity and ability to obtain further
financing to fund future operating and capital requirements could be negatively
impacted.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses Core Molding Technologies' condensed consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these condensed
consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. On an on-going basis, management evaluates its estimates
and judgments, including those related to accounts receivable, inventories, post
retirement benefits, and income taxes. Management bases its estimates and
judgments on historical experience and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
Management believes the following critical accounting policies, among
others, affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements:
13
Accounts receivable allowances:
Management maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If the
financial condition of Core Molding Technologies' customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required. Core Molding Technologies had recorded an allowance
for doubtful accounts of $228,000 at September 30, 2004, and $379,000 at
December 31, 2003. Management also records estimates for customer returns,
discounts offered to customers, and for price adjustments. Should customer
returns, discounts and price adjustments fluctuate from the estimated amounts,
additional allowances may be required. Core Molding Technologies had recorded an
allowance for chargebacks of $758,000 at September 30, 2004, and $851,000 at
December 31, 2003.
Inventories:
Inventories, which include material, labor and manufacturing overhead,
are valued at the lower of cost or market. The inventories are accounted for
using the first-in, first-out (FIFO) method of determining inventory costs.
Inventory quantities on-hand are regularly reviewed, and where necessary,
provisions for excess and obsolete inventory are recorded based on
historical usage.
Goodwill and Long-Lived Assets
Management evaluates whether impairment exists for goodwill and long-lived
assets. Should actual results differ from the assumptions used to determine
impairment, additional provisions may be required. In particular, decreases in
future cash flows from operating activities below the assumptions could have an
adverse affect on Core Molding Technologies' ability to recover its long-lived
assets. Core Molding Technologies has not recorded any impairment to goodwill or
long-lived assets for the nine months ended September 30, 2004 or the year ended
December 31, 2003.
Postretirement benefits:
Management records an accrual for postretirement costs associated with the
health care plan sponsored by Core Molding Technologies. 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 Core Molding Technologies'
operations. The effect of a change in healthcare costs is described in Note 11
of the Consolidated Notes to Financial Statements, which are contained in the
2003 Annual Report to Shareholders. Core Molding Technologies recorded a
liability for postretirement healthcare benefits based on actuarially computed
estimates of $7,808,000 at September 30, 2004, and $6,849,000 at December 31,
2003.
In May 2004, the Financial Accounting Standards Board ("FASB") staff issued
FASB Staff Position 106-2, "Accounting and Disclosure Requirements Related
to the Medicare Prescription Drug, Improvement and Modernization Act of 2003"
(the "Act"). Core Molding Technologies adopted the provisions of the Act in the
third quarter of 2004. The adoption of the provisions of the Act increased net
income for the three and nine months ended September 30, 2004 by $39,300 and
$117,900, respectively.
Income taxes:
Management records a valuation allowance to reduce its deferred tax assets
to the amount that it believes is more likely than not to be realized. Core
Molding Technologies has considered future taxable income in assessing the need
for the valuation allowance and the amount of the valuation allowance recorded.
The valuation allowance will be adjusted as Core Molding Technologies determines
the actual amount of deferred tax assets that will be realized. Core Molding
Technologies recorded a valuation allowance of $1,425,000 at September 30, 2004
and December 31, 2003.
14
PART I - FINANCIAL INFORMATION
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Core Molding Technologies' primary market risk results from fluctuations in
interest rates. Core Molding Technologies is also exposed to changes in the
price of commodities used in its manufacturing operations and foreign currency
fluctuations associated with the Mexican peso. Core Molding Technologies does
not hold any material market risk sensitive instruments for trading purposes.
Core Molding Technologies has the following five items that are sensitive
to market risks: (1) Industrial Revenue Bond ("IRB") with a variable interest
rate. Core Molding Technologies has an interest rate swap to fix the interest
rate at 4.89%; (2) revolving line of credit, which bears a variable interest
rate; (3) bank note payable with a variable interest rate. Core Molding
Technologies entered into a swap agreement effective January 1, 2004, to fix the
interest rate at 5.75%; (4) foreign currency purchases in which Core Molding
Technologies purchases Mexican pesos with United States dollars to meet certain
obligations that arise due to the facility located in Mexico; and (5) raw
material purchases in which Core Molding Technologies purchases various resins
for use in the manufacturing of SMC. The prices of these resins are affected by
the prices of crude oil and natural gas as well as processing capacity verse
demand.
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.
Assuming a hypothetical 10% change in short-term interest rates in both the
nine month periods ended September 30, 2004, and 2003, interest expense would
not change significantly, as the interest rate swap agreement would generally
offset the impact and the use of Core Molding Technologies' revolving line of
credit was not material during the nine month period ended September 30, 2004.
15
PART I - FINANCIAL INFORMATION
ITEM 4
CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q
Core Molding Technologies carried out an evaluation, under the supervision and
with the participation of Core Molding Technologies' management, including Core
Molding Technologies' Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of Core Molding Technologies'
disclosure controls and procedures (as defined in rules 13a-15(e) and
15(d)-15(e) of the Securities Exchange Act of 1934, (as amended the "Exchange
Act")). Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that Core Molding Technologies' disclosure controls
and procedures are effective in timely alerting them to material information
required to be included in this Quarterly Report on Form 10-Q.
No changes were made to Core Molding Technologies' system of internal
controls over financial reporting (as such term is defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter, that
has materially affected, or is reasonable likely to materially affect, Core
Molding Technologies' internal control over financial reporting.
16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No submission of matters to a vote of security holders occurred for
the three months ended September 30, 2004.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits:
See Index to Exhibits
REPORTS ON FORM 8-K:
On August 10, 2004, Core Molding Technologies, Inc. filed a Form 8-K
with the Securities and Exchange Commission announcing that a strike
had been called by Scioto Lodge No. 1471 of Machinist and Aerospace
Workers ("IAM") at its Columbus, Ohio manufacturing facility.
On August 17, 2004, Core Molding Technologies, Inc. filed a Form 8-K
with the Securities and Exchange Commission announcing that a new
labor agreement has been reached with Scioto Lodge No. 1471 of the
International Association of Machinists and Aerospace Workers ("IAM")
at its Columbus, Ohio manufacturing facility.
On August 17, 2004, Core Molding Technologies, Inc. filed a Form 8-K
with the Securities and Exchange Commission regarding its results for
the quarter ended June 30, 2004.
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORE MOLDING TECHNOLOGIES, INC.
Date: November 15, 2004 By: /s/ James L. Simonton
------------------------
James L. Simonton
President, Chief Executive Officer
and Director
Date: November 15, 2004 By: /s/ Herman F. Dick, Jr.
------------------------
Herman F. Dick, Jr.
Treasurer and Chief Financial Officer
18
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
2(a)(1) Asset Purchase Agreement Dated as of September 12, 1996, As Incorporated by reference to
amended October 31, 1996, between Navistar International Exhibit 2-A to Registration
Transportation Corporation and RYMAC Mortgage Investment Statement on Form S-4
Corporation(1) (Registration No. 333-15809)
2(a)(2) Second Amendment to Asset Purchase Agreement dated December Incorporated by reference to
16, 1996(1) Exhibit 2(a)(2) to Annual
Report on Form 10-K for the
year-ended December 31, 2001
2(b)(1) Agreement and Plan of Merger dated as of November 1, 1996, Incorporated by reference to
between Core Molding Technologies, Inc. and RYMAC Mortgage Exhibit 2-B to Registration
Investment Corporation Statement on Form S-4
(Registration No. 333-15809)
2(b)(2) First Amendment to Agreement and Plan of Merger dated as of Incorporated by reference to
December 27, 1996 Between Core Molding Technologies, Inc. Exhibit 2(b)(2) to Annual
and RYMAC Mortgage Investment Corporation Report on Form 10-K for the
year ended December 31, 2002
2(c)(1) Asset Purchase Agreement dated as of October 10, 2001, Incorporated by reference to
between Core Molding Technologies, Inc. and Airshield Exhibit 1 to Form 8K filed
Corporation October 31, 2001
3(a)(1) Certificate of Incorporation of Core Molding Technologies, Incorporated by reference to
Inc. As filed with the Secretary of State of Delaware on Exhibit 4(a) to Registration
October 8, 1996 Statement on Form S-8
(Registration No. 333-29203)
3(a)(2) Certificate of Amendment of Certificate of Incorporation of Incorporated by reference to
Core Molding Technologies, Inc. as filed with the Secretary Exhibit 4(b) to Registration
of State of Delaware on November 6, 1996 Statement on Form S-8
(Registration No. 333-29203)
3(a)(3) Certificate of Incorporation of Core Molding Technologies, Incorporated by reference to
Inc., reflecting Amendments through November 6, 1996 [for Exhibit 4(c) to Registration
purposes of compliance with Securities and Exchange Statement on Form S-8
Commission filing requirements only] (Registration No. 333-29203)
3(a)(4) Certificate of Amendment of Certificate of Incorporation as Incorporated by reference to
filed with the Secretary of State of Delaware on August 28, Exhibit 3(a)(4) to Quarterly
2002 Report on Form 10-Q for the
quarter ended September 30,
2002
19
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
3(b) By-Laws of Core Molding Technologies, Inc. Incorporated by reference to
Exhibit 3-C to Registration
Statement on Form S-4
(Registration No. 333-15809)
4(a)(1) Certificate of Incorporation of Core Molding Technologies, Incorporated by reference to
Inc. as filed with the Secretary of State of Delaware on Exhibit 4(a) to Registration
October 8, 1996 Statement on Form S-8
(Registration No. 333-29203)
4(a)(2) Certificate of Amendment of Certificate of Incorporation of Incorporated by reference to
Core Materials Corporation as filed with the Secretary of Exhibit 4(b) to Registration
State of Delaware on November 6, 1996 Statement on Form S-8
(Registration No. 333-29203)
4(a)(3) Certificate of Incorporation of Core Materials Corporation, Incorporated by reference to
reflecting amendments through November 6, 1996 [for Exhibit 4(c) to Registration
purposes of compliance with Securities and Exchange Statement on Form S-8
Commission filing requirements only] (Registration No. 333-29203)
4(a)(4) Certificate of Amendment of Certificate of Incorporation as Incorporated by reference to
filed with the Secretary of State of Delaware on August 28, Exhibit 3(a)(4) to Quarterly
2002 Report on Form 10-Q for the
quarter ended September 30,
2002
4(b) By-Laws of Core Molding Technologies, Inc. Incorporated by reference to
Exhibit 3-C to Registration
Statement on Form S-4
(Registration No. 333-15809)
11 Computation of Net Income per Share Exhibit 11 omitted because
the required information is
Included in Notes to
Financial Statement
31(a) Certification by James L. Simonton pursuant to Rule Filed Herein
13a-14(a) and 15d-14(a), as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31(b) Certification by Herman F. Dick, Jr. pursuant to Rule Filed Herein
13a-14(a) and 15d-14(a), as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
20
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
32(a) Certification of James L. Simonton, Chief Executive Officer Filed Herein
of Core Molding Technologies, Inc., dated November 15, 2004,
pursuant to 18 U.S.C. Section 1350
32(b) Certification of Herman F. Dick, Jr., Chief Financial Filed Herein
Officer of Core Molding Technologies, Inc., dated November
15, 2004, pursuant to 18 U.S.C. Section 1350
(1) The Asset Purchase Agreement, as filed with the Securities and Exchange
Commission at Exhibit 2-A to Registration Statement on Form S-4 (Registration
No. 333-15809), omits the exhibits (including, the Buyer Note, Special Warranty
Deed, Supply Agreement, Registration Rights Agreement and Transition Services
Agreement, identified in the Asset Purchase Agreement) and schedules (including,
those identified in Sections 1, 3, 4, 5, 6, 8 and 30 of the Asset Purchase
Agreement, Core Molding Technologies, Inc. will provide any omitted exhibit or
schedule to the Securities and Exchange Commission upon request.
21