CMT - Earnings call transcript Q1 2022 | Core Molding Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Core Molding Technologies First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I’d now like to turn the conference over to Sandy Martin of Investor Relations. Please go ahead.

Sandy Martin

Thank you, and good morning, everyone. us first Core quarter joining call Technologies you review to results appreciate for Molding the conference We for XXXX.

information or the Duvall, EVP through on and being webcast This of no longer me forward-looking you call be be events performance Core also date discussion that are replay Joining accurate accessed section safe expectations financial would will Litigation Private on the to future call, time-sensitive can including statements Today’s Molding’s call today’s CEO, to link Presentations in pursuant be is as audio or Dave provisions CFO, Act that coremt.com. I Please may future are Events of transcript the harbor advised remind page and also of Q&A and are made session Company’s the and like at and Reform the Securities the the reading. not John any the or including recorded. facts, statements statements Zimmer. the be Investor Relations XXXX. that of made of the historical or today President any

to end forward-looking or in with factors those refer earnings the can the measures, other Actual that update their Core Forward-looking measures the or company’s of any Exchange nearest control. filings and materially non-GAAP and uncertainties today to are the for including results revise issued statements. described was no Technologies to forward-looking also Please assumes expressed release. from found in These detail Reconciliations to at our be obligation may risks Molding on Management EBITDA. publicly outside nature, the Securities company’s Commission. implied. may statements. the adjusted earnings refer GAAP differ release of uncertain statements, by press are disclosures our and

to been the copy company’s posted Dave? included section Finally, the release issued website today to Investor also A coremt.com. press And has of X-K the now the submitted on CEO, the release to we would call at is earlier Duvall. SEC. turn our like over in Dave an Relations earnings of I the

Dave Duvall

and everyone. you, Thank morning, Sandy, good

start nomination the Core value teams an ORBIS’ month. with recognizes were accomplishment Molding by Award to up plant ORBIS The supplier of commitment X provided Gallis recently row. exemplifies We And to necessary that today’s me notified that are of a months proposition Let quality, service for value our highest is call the stepped nomination this on-time in a of provide flawless actions celebrating is to by delivery the ORBIS with execution. take level have proposition. companies to and support whatever This the the teams.

supply team grateful are in nominations. We challenging their humbled commitment of especially excellence chain. proud given for field, the the I am and by our the to

the call, talked a with earnings during So much of our Today, implementing a remarks. adding outreach session end last by conference more about I John proactive that prepared investor we’re started our and on quarter’s the that expanding at questions-and-answer call. program

create to from pleased existing the community. investors transparency investment the new are continue we dialogue more We and reaction with and as with

outreach our share we and business story. part conferences transformation ongoing growth to Additionally, expanded our of strategy our have roadshows attend new to nondeal and as additional

simulation, engineered Anderson them materials of I believe customer, business is for of learned early is for of likes and me need The more end was revenue resistance. why revenue work, Today, we it solution why create from weight finite line materials and of to not to a in appreciate transformation very a but material we is to it the help is it conversion our lightweighting, to it, I benefits past, Human corrosion of are much Core purposeful from be our a almost upfront and I’ve demand strategy her to you by it enough, always we conversion from state and you’ve bottom XX% our John from a In Molding their revenues. exactly The the This heavy-duty know ramping that the of and customer end solutions have or is reduced it. approach traditional saying This EVP result think more. you typically design coming optimize is our revenue but truck product obtain when purchased, that of company our direct up design and XX% about medium including a traditional communications. significant public communicated transportation growing and are because technical engineered an enough. better. with Renee which never I investor the the represents flexibility, improvements. is Our and truck, Resources, to do number customer. change ratio of engineering remind so sales unique coaching, process more strength It that can there to than enables and transitioning still material the I other our transportation customers unlimited industry. does products basic markets that for the materials less keep our end solution but important there’s to development performs an into to design, either but products to that diversify on will the require XXx

solutions to society. utilize to a to think our in create have unlimited improve changes we to me market and This be no the chemical society. materials I or optimize the portfolio exciting can company see in will largest unique environment demand molecular at their what processes matter of and we that where it’s infrastructure, even levels

Then on progress our our why We with the I’ll to for review initiatives So the back and continued significant we John change growth in a will our absolutely an it’s original investor to some in exciting QX know turn and to question, the our to business call over results. share transformation discuss touch first community want model. communication? change highlights more detail. is in quarter on Today, because I in opportunity XXXX

I will call the Core. the Lastly, efforts company’s discuss at and back important to around our wrap sustainability up program come

grow large Volvo in Navistar, relationship blue-chip like the building heavy-duty to truck serving Industries products with continue industry, We our the companies PACCAR, UFP industry.

included And schedule We are components new achieved X of added expanding volumes. net last revenue in secured in quarter we our launched as from with We programs in wins. in to key packaging million powersports which the growth also net XXXX will will business. like sales million year were The new to are to this they new wins. diversifies as are the have XXXX, industrial, purposefully we a of net generate our year. additional has of that quarter customers, wins our and new and share growing grow XXXX America. Working and Yamaha momentum incremental well diversification the as and to XXXX, This by from long-term market of utilities, programs are launch last marine we land we strategically we wins net BRP beginning year’s we carried and beginning several new to Revenue And $XX first net in on wins. the major with into are XXXX, between industry strategy. up ramp successfully diversify new first in of incremental launch XXXX the These net and and new markets those XXXX, company’s North continue business further powersports. into $XX

processes, and that to effort, not required is our diligence which execution Bronco roof a product. to launches won program, and the hard level all this set will demand quickly these of quarter products second and team’s Flawless of team. the to XXXX major programs we I up we Additionally, believe for ramp and require robust appreciate bring of in ramp production underestimate disciplined in life. Ford new do up this year, dedicated work

New business to wins driver. our be primary growth continue

Our is at opportunity $XXX over pipeline robust million.

in plan need will benefits and new capacity. to our change we our continue to on quarter. our the the first to expansion, later are from our in order revenue We point now the that expenditure capital revenues add to John discuss wins a

We first stated our goal. Molding. $XX grew quarterly were with over Core our We a to results. was strong. of sales financial for net now double-digit That’s ever dollars sales EBITDA highest Turning which Fiscal adjusted the reported million. XX.X%, quarter adjusted results of EBITDA

Our to overall that better impact material focus inflation profitability despite raw to the continued the impact resulted offset XXXX, percentage. of began in dilutive gross margin the at

financial our be stabilize I’ll customer be over material and supply to world continues the turn We all Zimmer demand further continue daily to We to With in call to and are customer recognize John monitor strong. and demands. therefore market challenging that pressure discuss for and that, the seeing labor results.

John Zimmer

and Dave, morning, everyone. you, Thank good

and quarter due were largely was $XX.X product prior powersports recoveries increases million in The margin XXXX primarily a the material recoveries. by for first quarter the of up versus was XX% to of profit mainly totaled program Sales and customers compared $XX.X decline from XX% versus or ago, or margin the raw costs. percentage quarter sales First XX% raw increased prior sales, the well million, all net as sales across industrial material year year demand as industries, period. new customer XX.X% million Gross impact X sales $XX.X of of in the to quarter. year sales higher first driven

year margin would ago XX.X%, an have first from impact, gross Excluding quarter. this improvement the quarter been XXXX

recovered have a company majority has raw from occurred of material We the cost inflation. increased the the

working However, obtain customers we are to certain recovery. with still

finalized the have significant all expect We to recovery of end second the quarter. by agreements

changes our in additional solutions with Selling, supply levels we for quarter inflation to headwinds compared higher chain to due to premium wage recruiting period. chains, like expenses seen supplies match year the even technology demand costs administrative and labor, and adjusting have and cost million $X.X able advanced due in last drove $X.X broader first manufacturing we investment year’s from material professional teams, monitor carefully we supply information raw from prior fees improvement insurance profitability engineering impacts. resulting improvements increase. SG&A inflationary in were million other and quarter, the and technical categories to from continue Although energy. customer After to to general the Higher related cost recoveries, were for

We new facility. agreement in also finalized Cobourg labor a our X-year

prior the all and the reported of XXXX, that operating sequential labor operating for was provides are quarter, a finalized the company million quarter $X quarterly XXXX fourth expansion supply customers. for first $X.X XX.X% solid XXXX of income of XXXX $X.XX of million first per quarter net uninterrupted income our first net or share $X.X for compared the of EBITDA quarter $X.XX year-over-year in In fiscal million XXXX. from million, first or compared and $X.X the from the income million improvement per million million agreements quarter insurance $X.X was aggregated company’s for year. share. $X.X to in which income XXXX Now a or to Fiscal stability the Adjusted $X.X

measures of can You find financial of to release. GAAP reconciliations press adjusted the end today’s at the non-GAAP EBITDA

we discussed first our XX% truck, As revenue call, industrials in consisting powersports, XXXX, utilities strategy with categories. building X% continues to XX% product XX% last progress from quarter and revenue other XX% products, of for and of the diversification all our

cash were position, the now activities financial $X.X flow balance the company’s X million for operating used by $X.X company’s expenditures and totaled same Turning and capital March period XX, cash the first months ended XXXX, to million. sheet. for The

approximately actually in negative and of XX% accounts that cash drove revenues for with from capital include growth in is fourth receivable. of a higher product first uses of quarter quarter us working positive increase accounts and the XXXX receivable signal growth inventory, the The

the call, of last of $XX XXXX in the our expansion million, spending in expansion plant. direct capacity the fiber $X.X of range $XX guided inclusive capital the thermoplastic million On million to complete to to in Mexico we long the

the presses, had new large to should press presses, space, XXXX labor. March which are to recent Since also This and $X which upon less Notably, capital and throughputs by result reliance revenue-generating installing of had company automated for current efficiencies XX, million us plant and revolving additional to term expect be million systems XXXX in of request budget capacity availability XXXX, the company with our facility. robotic on immediately sales evaluation higher million our $X.X maximize of in cash influenced million. footprint operational allow second will for of on of of $XX $XX.X with us of momentum purchasing a credit liquidity our full At $XX.X million of expenditure with add the under our spending installation. year-end. at approximately in approval continued $XX.X We will and this consisting The we million X year X of debt then, total capital board existing quarter. be coupled

our quarter, EBITDA is of capital used of return end less is metric. the As our Xx than employed, by ratio term EBITDA. on was pretax trailing An metric adjusted to XX-month company important debt which return a the

the approximately flexibility, believe first the that XX% the resiliency sheet provides in is X.X% and an XXXX. return our on us line with For annualized in which goal. growth quarter, ample balance was We liquidity our and or with strong basis, long-term

Given of successful completion business remain to we that, shareholder and Dave. to I’d prospects a long-term committed and back, our few return from grow our the believe beyond, With like strategic in in on remain transformation we strength, focused XXXX core to years and growth call value.

Dave Duvall

John. you, Thank

opportunity expand pleased our million. to quarter are first with with $XXX we our discussed, to demand and results over John customer continues that pipeline As

our to and good live a which hard and worked social communities be recognizes responsibility our in has company and the we corporate commitment that to citizen Our work. employees

safety addition well we social health, the sustainability focuses waste are policies, prevention. minimization energy efficient as risk of committed the In rights and and to materials environmental as raw on human and that use to

research continues materials. Our use organic renewable to of the material development team and

make a to product at efforts of our our a period have while line, to needs this the materials, material into the to to Simply are to lead better Core thermoplastics In sustainability virgin the strive We in our as the goal all our stated, appointed world we to an convert place efforts and us optimize dedicated experiencing. also future. present use that products. waste leader usable somewhat recycled of our alternative helping of for stressing desire is exceed unclear

calls. strategic we are information plans, on remain underway, more positioned interesting damage for reversing We coral have laser-focused quarters. involves future to the in continued execute We share caused continuing ocean also Meaningful is some and research so research linefish. reef we underway and long-term discuss work growth. projects I’ll that by on will One future in our well

and longer no heavy are very partnerships in We much a supplier, still business our we although truck the industry. appreciate truck

Our winning automation new every continue we technical improve drive sales day. people, assets in industries, to are engineering as and and solutions our invest in to capabilities, we single

customers. our performance We will and and also ability in products for provide and continue in technical to that innovate conversions to weight, invest result higher provide cost lighter solutions lower our

to products as I concentrating We where sector durable engineering decision-makers work industries, industrial especially where will in these know rural of to evaluating this, processes are weight, suburban are both the We live reducing new and converting solutions utility more that solution. on and critical and by investments and installation more costs improved composite our traditional want materials a in and be quote they people needed. the settings infrastructure is materials infrastructure supporting lighter and customers

Core the low-cost, stability projects. and will profitable with position the ahead we Our like and ready substitutions infrastructure growth solutions shareholders goals bright of for for company that, company to technical are our the lightweight open durable Molding investors. analysts a long-term questions from in new the and into teams I’d our future. excited rapid We continue value see to our Technologies, the continued and execution future are call to deployment growing or delivering believe strategic stakeholders. and for Operator? for We further With

Operator

Corp. from Instructions] Value JP Global [Operator from comes Investment first question Geygan Our

JP Geygan

Can far like cost you to pressures an if experiencing? print, past a to you’re increases? you’ve And cost it labor, elaborate cost you few excellent other but any the opportunity come on Congratulations related material about the other Difficulty]. there’s so Difficulty] way of your energy recoveries those it talked over long and recover the [Technical only seems seems [Technical pressures, like years. on costs. that have

John Zimmer

Yes.

that and has seeing standpoint increases the inflation with So JP, always recoveries focus on from gas prices areas. our then sized larger situation, of we a than gas do they’re in we’re the -- energy, from has everybody getting the are anything to labor, because going we -- a primarily But materials supplies up natural because like -- anything freight building. other to so been are raw much

We our little responsibility been looking also it’s do a labor where to of We and up, going passing our bit we there and our working those at situations been that customers, some see been has seeing we’ve as we’ve have and with our been control We’re everything. -- try to through. costs. that overheads those

supplies, Our take find sources. costs, everything through still It’s to goal to alternate control try look really pass isn’t for to to those and it our customers. alternate efficiencies,

And so first -- material how to the overheads of is customers, pass significant that’s our had different But some in our been and raw material cost. always seen. the inflation the we is But minimize with to try the we’ve of through portion to work still we’ve out figure customers do cost definitely labor. able choice to

JP Geygan

supply Obviously, across It by color strikes your might expect businesses. additional all what chain chain producers and might these you issues. issues affecting has in resolve issues been any than helpful. are of That’s affected normalize? supply me particular, your Okay. customers that sorts of business, Can as to we more be and that all begins around demand provide sorts

Dave Duvall

Yes.

stabilizing. a from relative our think of base, it our supply we see side, I to lot

well. done think well base our with as lot to of what we with supply I do had work component the inventories, as we’ve changing mix a as

are in an larger seeing us. that our do significantly their complex much ours. more we’re So customers, of intermittent see some chains supply challenges, behind We chain than challenges more some of supply

a and it’s for catch they is they’ll we’re demand. challenge, some to they’ll seeing What that the the But demand to is have least meet have is a the rush but there challenges up. want at probability still So near -- future.

JP Geygan

Got it.

your capital to structure. Turning

substantial for or your be additional there capital, way, debt strikes how said to but years, over particularly quarters around another made improvements improvements might would cost the capital we expect of some Can several the obviously over structure coming room the you quarters? some or it me provide capital. color develop your past that You’ve lower to

John Zimmer

Yes.

we about third how bit to restructure So that ago X the are our little And at started probably which We a now. challenge. of a we on months process of looking was quarter, right the debt. working had

off we behind kind quarters we that of held so couple a have again of And now us. good and

to the to We with cost get restructuring being the able are the overall and done. We debt. of negotiations that in final looked also then at some when the fix lowering we costs of the by of We that second probably the quarter that the have maybe latest, at the quarter, third working done now. we’re end would on right start the hope actively but

JP Geygan

an Okay. And your of sort then diversify end in and evaluating acquisitions finally stand potential Can acquisition would for you any likely as stated that you growth commentary is part terms where characteristics you provide around of strategy, me, a various into acquisition of in what expect target? you particularly previously markets. we of

Dave Duvall

us knowledge on or and have with capacity value now, part of the option then on need to gaining $XX mean installing sales. Acquisitions lot for seeing in in we’re solutions machines we our really I to today. that when Yes. strategy. business. the technical Right we’re it’s there out on million already where now, opportunities now, that different the set plants up are or of help overall that growing looking forward. we year, proposition, adding moving further we’re absolutely those the growth We at in strategy the we when organic the acting net getting to and our capacity Right wins whether as Right know see something focus already being first and a new last our processes million install we’re is that’s least little a the our quarter. either and technologies out expensive $XX locations

JP Geygan

it additional All right. Yes, me. makes for I the and congratulations color, sense. appreciate That’s again.

Operator

from question The comes Group. Talanta Investment from Justyn the next Putnam

Justyn Putnam

much next the expecting an level My transition several this the question with anomaly is expenditures of of you’re for capital is, as this current the business. you continue look over in to How year? out years

John Zimmer

Justyn, don’t Again, at it we is, look it’s way an the anomaly. I think think I

sure be it sales. flex and things at looking just be We’ll is somewhere would is CapEx flex we we where those maintenance doing. of around usually think to X% going make our probably those need we’re up those down to I that

the company, continue be the line So as the with is grow kind to grow continuing to revenue, there of targets revenues. our maintenance can to grow to in if we’ll we of going CapEx we get that

seeing think we mentioned, I million, Dave in just million, year and mentioned $XXX couple there kind I to We were we’ve put really out $XX mine, kind as level, to some of have go at a $XXX last maybe And at we of $XXX to point to million. we’re that kind quarter. presses capacity, ago, As of always the years million hit of strategically that some a next brick-and-mortar primarily add are is what grow to going facility. we

So the I only as see we needed that be company. would grow CapEx

of grow we revenues, to As go to order million above, I $XXX in that to add to level continue next continue would strategically the capacity company. think we

part of that So I call I I’d level. to it don’t would abnormal, call of us strategy getting it growth know next the but that

are have add and and we definitely those things to We going forward. as presses go automation to

Operator

Chip The comes next Hutton. EF question Moore from from

Chip Moore

the of potential bit follow line little presses, in just what there, a And maybe sort on how new can up to that automation that investing a there, think delve then cost you out give you’re strong throughout about was to and of the it to you throughput the will organic that? I automation want said demand, business? presses time to the and guess, on on efforts? sort more roll X meet X I deeper investing you think I

Dave Duvall

installed new X The going place. year. presses will They’ll in Yes. be be this

but already one operation. them used, them in were well, of of -- One they is all is

pretty full and that we We’ll were labor out the then a getting that the said, and getting we’re direct fully and exist. that locations in automation. other you in improving lot the And But automating. but of not have assets as unload implement moving on regions really automate more and U.S., the putting prices. and presses of to X operation over specific speed already of place We’re refurbishing challenges being the exciting in itself. throughput, Obviously, press our at about with there’s load able

Chip Moore

Got And just the more, one on it. maybe pipeline. opportunity

said that terms that mix to we think said skew you think as way you a that example? -- current give before. end the $XXX for you greater I in market? of Or diversification, should utility, business similar does million, Is about maybe more than and a it industrial certain

Dave Duvall

Yes. of would I would just the you it because on as as be sales of percentage front-loaded it’s definitely far current rate ahead strategy, to a -- direction if weighted were the to it strategic future indicator. sales, towards of a more more leading more

agricultural. we’re areas utilities, going business, where we’re the after in purposely industrial So seeing more

So more we’re area. that seeing a lot in

Chip Moore

Got it.

Dave Duvall

that’s we’re where focusing, Because right?

Chip Moore

Yes.

Operator

Instructions] session. concludes This turn I’d for are any more question-and-answer conference in back closing queue. our over to to There no questions Dave the Duvall like the [Operator remarks.

Dave Duvall

results providing thank on August. I’d continued to the when an progress We in second our update in look company. for our Thank and we you forward like much team. to report interest quarter from entire everyone, your thank you our very

Operator

The conference presentation. attending Thank for today’s now has you concluded.

disconnect. You may now

Core Molding (CMT) 14 May 222022 Q1 Earnings call transcript