CMT - Earnings call transcript Q1 2024 | Core Molding Technologies, Inc.

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Operator

Good morning, everyone. Welcome to the Core Molding Technologies First Quarter Fiscal 2024 Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the call over to Sandy Martin, Three Part Advisers. Please go ahead.

Sandra Martin

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

and me via EVP facts or today are made CEO, no By you Joining are I webcast and control. from the of that This call company's accessed in and pursuant being statements link the Gap] and forward-looking through statements on be be harbor including Reform to also the time Events President future the coremt.com call, call safe are is forward-looking of Dave of expectations uncertain Act of audio statements including session CFO, may will of made the and conference historical discussion sensitive as the Presentations any the that Litigation differ and their materially statements Today's can nature, John recorded. Please results an future Zimmer. be Securities may outside page. or and financial to Duvall; reading. advised the on Investor the any Relations transcript be accurate replay longer information Q&A Private or date would performance the events XXXX. remind that [Audio provisions today's not are like Actual are company's or

David Duvall

Sea-Doo and Switch. for suppliers the personal Sea-Doo Key watercraft the

improvements our of accomplishment of what high-quality our in products gold several and past and culmination can awarded we've been a proud be has business the the a transformation am the processes this prestigious logistics recognition and team over of that seen excellence, been manufacturing accomplished customer executing the Our recognized communicating metrics. is in Core's I service. and for team superior basic this has supplier magnitude years. as tremendous Being complete and

by safety, than better two the average. the and industry incident reduced our last in For are we XX% rate years much

will development, annual development We've improve development customer certification salary focus training we've which last Employee two we years. by and continually engagement XX.X% quality, organizational in an be Core last now last delivery, annualized. and low career and programs, delivery are and the in delivery. area now for focus programs, is reflected development a the our reduced on always members XX% at our our organizational key improved with years implemented by XX% turnover of XX% leadership PPM individual employee initiatives. technical in molding. In and the along on-time four XX% is years our many other team in In people, For programs, and we than less two incredible on-time

through have capacity by rates, necessary which existing to market continue between reduced $XXX first operations with financial improve levels. improved million service which pricing back XX%. We levels, increase in to and provides enabled production in assets capacity customer service necessary We customer our facility and the efficiencies, total to us support over $XXX capacity improvements, sales. annual to our line in prices which investments plans to scrap automation, over costs increased our to by and rework XX% million strategic our made current increased We to the make bring our significantly and changes then resources with to our

condition in company in a operating As best business believe company, we're I overall history. the

through demand that organizational programs that and new opportunities operational has business service and industry. levels the are acquisition robust throughout revenue systems our am levels sustainable we stability transformation. the Our programs, company has focus been confident in The have capability, drive highest some of as existing improvements and to the financial in infrastructure the I on place rebound. implementing growth

our also share core of invest second something for that for our from of the We last which for solid providing we structure Also Molding a talk ourselves systems all report, Win driving Must reduces we're instrumental is sustainability published against our by sustainability of be the year. business and view progress And to This Battle an to a will our our ready. is commitments. which important website Core for I and better provides at progress both engine stakeholders change organization Sustainability and stated, and and into showed sustainability support about stewardship. published growth is a excited organization our now is invest [Audio bigger on that strategy costs. risk established now Core's or to is The embedded growth. prepared enterprise with growth have in have overview our that Gap] offers goals later. I'm values allow comprehensive organizational report than part environmental phase

XX.X% Our by sequentially details $XX on XX% to market reduce intend fourth company quarter quarter We to accomplishments XX XXXX waste increased the prior fourth operational to XXX and second was will the leverage. and the years compared the cost more progress and and XXXX energy XXXX. down [Audio lower XXXX quarter in XX annual lost offset quarter to quickly first reacted over the from important first we to past of up of on moment. When made greenhouse year Anticipating compared we of XXXX, consumption, basis at improvements [ by the Gross the several due sales, quarter in fixed sales leaned report end first X.X%. margin emissions look XX.X% for challenging gas that XX.X% sales in sales Gap] targets. ] a landfill our by by company's comparisons discuss headwinds million, in our XXXX and the XX% for points the of

we and translating solid improve profitability. work XXXX, adjusted to second reported consistency efficiencies stability, million foundation allowed more and all and in line or of us plants. XX.X% stable of initiative, much cash and summary, improvement with We margins our positive the operate continuous more and Battle are a in sales to also for EBITDA operational product Win generated Must That the completed $X.X improved for results free flows. In we

intense Battle year, fundamentals this Our remain is Win strong. Must or on and focus business sales our

business on it diversifying and in and our to work I'd new pipeline. With into that, landing to to more opportunity financials the over detail. continue We cover John turn to like increasing

John Zimmer

you, everyone. Dave, Thank good and morning,

net X.X% for that ago. earlier, Seasonality Dave quarter in $XX.X allows sales shifts fourth recent compared our performance the $XX.X our QX, customer million. growth first produced comparison mix net year the from As quarter's believe us million, sequential we to sequentially, sales and changes of total a by And were mentioned explain down sales XX.X% improved from demand. including to up and

prior and quarter levels. QX first comparisons, rebalancing and truck months sales XX% of expected, reflected and first to sales heavy-duty in XX% notable shifted from of inventory shifts XXXX. sales sports customer from three XX% mix year of power to year, the of tough last As year XX% this XXXX medium sales in shifted

industrial other products and continue soft addition, building industries, produce including In sales. utilities to

in to and we of cost XX.X% operational first lower approximately lost year fixed versus gross operating impacted portion negatively quarter. was The improvements a sales XXX $XX.X prior million With compared year, points. was quarter able in leverage. margin sales our offset the Due to the basis or fixed the quarter of significant were pricing changes, ago by the to first XX% cost leverage

in volume more margin. gross Before our shifts [Audio improvements, operational mix Gap] and decreases historically volatility created

$X.X in interest expense was quarter the costs year tax interim of from our Gap] was XXXX was fixed now Operating jurisdictions, which plants, operate. However, $X.X have across and primarily profitability our cash in for better down balances. the [Audio the foreign first effective million where $XX,XXX year, XX.X%, we cost to X.X% period. comprising the compared tax million the Net prior lower The of weighted is in the income and $XXX,XXX quarter. $XXX,XXX from translation. efficiencies we which quarter interest in prior X.X% the all in costs and us income three due bonuses, allows or quarterly offset first Netted ago the favorable $X.X net to to labor expense interest operational $XX,XXX the benefit currency year rate million or from tax quarter, accumulated in

$X.X diluted $X.XX or income to million of the $X.XX net compared in EPS or Our diluted EPS comparable period. million totaled of $X.X year

million EBITDA year XX.X% quarter. of $X.X prior in Our or $XX.X first the compared million sales sales of or adjusted to XX.X% quarter was

tables to You to the at GAAP release. refer can reconciliation end non-GAAP are of our our press

quarter quarter, first million in Turning position. the We and to of The company's with ended favorably million the quarter. for activities $XX.X equivalents. the to the by provided was $X.X XXXX operating company's $X.X which compared the cash cash financial cash million first

to For the first from prior XXXX months, capital were flows the were million $X.X $X.X be free in million, and $XX cash $X.X million expect year. expenditures capital year. currently improvement the expenditures approximately for an We the million three

The capital end the which than million, $XX.X the was liquidity $XX company's outstanding was was total available and million cash trailing ratio XXXX, EBITDA of $XX.X and XX, lines. Xx. million to term revolver the at under less March of XX debt debt months our As includes and quarter, credit

working continues on XXXX. Our XX, well March to to $XX and capital managed be netted million

return basis. capital on XX-month pretax employed, on return trailing a Our XX% was metric a

prior includes repayment share strategy of and buybacks, allocation capital Our debt. acquisitions in guidance remains consistent and with investments growth, organic

'XX. outlook. expect provide net will an our ago, to to Nothing be changed to down comments weeks update sales has a compared few XX% we our XXXX on we annual sales materially Now XXXX and from XX%

returns inventory be like as longer. which leveling Our normal are impacted more markets end truck, consumer may sports, sales rates higher Fed power seasonality. inventories certain down staying as to customer environment outlook includes a in cyclical demand that demand slowdown by stabilizing well for Customer in

new XXXX. Core half is and is transitioning continue a of XXXX reminder, a the Volvo its As that in existing model through not one of truck to part from second beginning

secure have current are We the programs believe good and positioned to relationship bids. Volvo with We we outside active programs. a

for With product I'd to We profitability improvements Dave plans our Dave. turn to it year. Dave? back initiatives, on continuous like all across additional will further and let lines. I'll the focusing outlook on continue discuss working that,

David Duvall

John. you, Thank

market focused programs. truck We end headwinds, are end-of-life highly offsetting and certain cyclicality on the

John to and markets. Even and are for rebalancing we have industrial the pre-pandemic levels. return inventories seeing so, down we As mentioned, sports power utilities seen a

lead sales have be and organic with ramped I'll resources, agency, supporting week, streamlining growth. our up and Actually, are business team We sales processes aggressively maximize our to added by we partnering at end generation so marketing results a sales that our trade professional are [ this presence of the up today and show ramped to Orlando at quote We over most a through our start show in the ] beyond. know delivering display in likely our 'XX is XXXX to through going cash industry, in XXXX. efforts a NPE quote-to-cash year,

our the our demand the truck currently to in are We foundational XXXX reduced for increase emission we business is ACT as levels. prepared prepare our with continuous customers lower a in on costs or Truck to sole-source driven though Americas and serve is focused XXXX products are long-term improvement XXXX positioned also Commercial are which growth Research overall demand customers We by customers' forecasted plans. well higher blue-chip that regulations. Even period, and for remain

technical our been for our from Our sales solution ], approach, position extensive better and customers needs, of presses their highly serve. and benefit solutions specialized in industry we portfolio [ a have processes to never provides unique

allow from Build and XXXX in Buy Our America And [ projects engineered sustainable on BABA that America products. opportunities ] solutions friendly we the us Act. including environmentally Molding by suited new to bill work the is well provide, infrastructure to Core or are driven seeing

a for of long-term value. and our built resilient have We the creation strategy positioned supports shareholder growth, well organization

driving that want and are Win our and is growth, Must dedicated for in Our Molding is team. what thank We Core I we Battle XXXX to today. invest appreciate,

competitive team is Gap] advantage Our our [Audio

Operator

Instructions] MKM. ] comes Roth question from Chip with Moore And first today's [Operator [

Unknown Analyst

growth, if comments, engines maybe around that I your year? the on investing inorganic efforts after wanted this expand going just the there, some you Dave, in for of ready start and ask to you're can growth, organic

David Duvall

as done Yes. in looked already leads past. maybe far the to drive at a the all that lot that system in had really we had the the we've optimization business lead We've as

the ATV, customers or the transfer So molding UTV, truck, looking longer-term a in personal working more more at we're are on with or phase. lot immediate on design as on well side watercraft, short-term the molding. When contract as generation lead those customers

partnering those in already we're So with products. customers

Some in products the of on with areas of the those be part [ already our a to them and industrial new $XX utilities more would packaging driving either growing to lead that and being and million we've utilities able transfer lot in on ] then on continuing really for won and can side we the developing and develop where generation working products conversions, molds. and the that areas. ability There's and currently those still industrial

Unknown Analyst

quarter you some this the versus quite And And in the pipeline seeing areas? we the a composition Growth when of with maybe pipeline, are talked that what some about that you're maybe in end opportunities? that shifted seeing of the boosted recently, markets talk has opportunity just now? newer changes bit fairly then of right the

David Duvall

still Yes. automotive side far work. some type seeing opportunities We're the tailgate as as in and underbodies

at looking We're side. automotive that. we're still on So working the

of those of do we're a the looking Some sports. Also 'XX. the have longer in probably in it programs starting of about power newer that and area. utilities truck We are little 'XX, XX% at and industrial some

Unknown Analyst

of And forward truck just already your regulations? drivers on one it business. that? terms see market, expand on you when those And seeing the from sizable demand? you of that some pull to of 'XX might some [ it's through trickle of the or ] Maybe heavy-duty given right, in Can piece a emissions you're

David Duvall

are No, as in that's well customers talking with with that to our question. starting we the a as see And them really and ACT. good

volume last ] 'XX, the XXX,XXX was from Class XXX,XXX XXX,XXX ] [ X, year So [ was year, it [ about ]. increased to this

Next peak of year year, XXX,XXX [ about XXX,XXX ] ] [ to at XXX,XXX we're is and 'XX [ then the ]. looking

as we're 'XX [ come the the what in, is emissions a costly ] seeing So are that emissions one.

slots, and doing they're And for them companies what customers increase. earlier getting about. And talk filling when are 'XX with time 'XX, and start what prior So the then into to cost come preordering prepared frame. build that's to going earlier they now in seeing start we're the you start 'XX

Unknown Analyst

just And one-off it maybe one, the XX% to XX% any Maybe quarterly you on end? us then there, year. in assume? here mind assumptions sort towards and just to for talk what margin other higher John, the impacts. Is seasonality dynamics volume for about of of some I last the gross dependent, the with remind you, that maybe side, keep baseline the And range gets

John Zimmer

Yes.

year has probably holidays is seasonality the in got some QX probably guys and as hurt and the seasonality better us to of So going not mix it's much always We'll in as challenging. QX QX. see most this so it and changed. else, always everything has

at my we're would bit higher than expectation QX what is today. little be QX a So and

the about guys utility One away, the of anything at of the is, of to XX% pieces wasn't a big kind [indiscernible] from March us. lot think for to it year-end, XX% that we ordering -- in drive we year-end, the us and talked how at gone I really the -- had

to So fixed we a those more volume little getting at bit from back in leverage cost guys, won't that. be order any all do adding

a And see XX%. see so of bit should margins side, the we sales towards a can really the that we just little pickup head in

year. second in we rebound little the And get real go key the so of half the a of as revenues is that's a into the bit we

Operator

The next question comes Dezellem Bill from with Tieton [ ] Capital.

Unknown Analyst

year? QX the Building impacts of the Products of increase versus drove the to the last versus QX the talk and Specific category, about 'XX then what you would

John Zimmer

Yes.

couple our for So customers. retailers. not we it's customers, a through are building sales UFP so lot UFP From down. us of know year, last big-box products is and of primarily different sales a

start a types ] is comes standpoint, little And an March period it start and to so products things box billing have us put selling we as for and in and products. for the are this projects and know QX, April bit building really less, last. From in been so people May. they're to stores lattice quarterization April actual expect building to QX QX in year doing program a slow March big who of as usually they stronger they've to retailers, people or those [ that's with through we something versus with do changes to do ordering and that eventually and

in of And so primarily a year-over-year, our And that think difference that's seasonality. their just that's UFP normally business end sales to have I But they just down. their mix kind with customers. is a

Unknown Analyst

about you acquisitions relative and you are would how please thinking then And to talk pipeline about the now? acquisitions,

David Duvall

Yes.

So $XX million looking diversification $XX development. Really, acquisition anywhere to channel and we right at million an we're acquisition. at would customer sales or about footprint, now between look industry

when or that [ injection in large really molding. is processes also U.S. some the BABA in I the structural look part really think at infrastructure we focused foam, the of ] need we DLFT

the technical channels, and at look sales thing look we be think when part, footprint, or we a I small big a not everything to us at for has large parts.

So really, industry we're looking the sales channel big driver what is specific processes. is at and footprint, with diversification development

John Zimmer

Yes.

on different probably I in in and that of are we is cost this get, X% the medical We've One lot gone this like way of normal it area to know work that to I the with met of compare doing resin-based in a hearing for We're what deal, for X% about -- haven't up, really financing that. XX questions multiples not we the changed though of been sell even are the much. kind seeing bankers also industry housing specialty something products. valuations. we've a industry, that has a or

the on of Xx synergies? or synergies be at we're comment, And manufacturers. how as are disciplined to can part guys if big acquisition, aware, going value Xx we are enterprise that a is synergies so And fast made we again, cost get buying things very one as sales Dave from to either that you you're is

a plant footprint. it's have that, savings and So usually our and all down our and go the and to strategy to from is of not kinds shut in actually buy consolidate plant expand it

are lot XX finance being were that diligent than a to higher they standpoint. we're them. interest last from Obviously, years rates So the over

and XX% quick looking to to of synergies that and for XX% drive gate. EBIT get of X% employed that on the we're us definitely so out capital can And return opportunities pretty

we higher with do come we the a selective to would have little hoped because valuations as much that financing haven't seen down so as being costs. probably And on

Unknown Analyst

sense there, And the is there address -- your out acquisitions quantity your what's view? you more see or that maybe of are -- less that

John Zimmer

less industry. ] our Yes, in [

of in said, in we the game. of the different industry. [ I things play in this They bankers guys PE a still money There's one like the less this lot play. still industry, So talked to have to ]

and an and just but too that lot want financing there so that think the And Xx, gotten challenge XXx are are lot -- said the Xx, -- that they of of rates buyers little multiple, from have bit a more a sellers today. I diligent overall that's there's where is high with Xx, a still

when I this of over to couple talk And we with and did last had that one we the Capital so bankers, in at said point. of weeks, this Markets, also industry they lunch mean, a P&C slowdown seen they've our

So and their go a are buyers as think this. more high keeping little being seeing bit we're because they through of I rational prices a slowdown are sellers just

Operator

The comes next Moore from EF question Hutton. Tim with

Timothy Moore

for It margin, and savings cost come declines the that EBITDA was quarter the on great see impressively front. in to efficiency despite gross the pretty sales or margin kudos

because So maybe I'll just are answered. questions start of two my already off

curiously, mentioned, you million million last sales earnings in of believe place. kind was capacity during I call, it your $XXX $XXX to Just

million, get in [Audio Gap] it my those call you XXXX and for be wrap let's of in to could think million look to around you the head truck maybe of up to X out starting terms your some kind sales to When trying Just capacity the comments be the and customer fill XXXX. qualifications it that in end earlier do volume, peak of could place the towards Class $XXX about it $XXX

David Duvall

in to You it. at up we're here peak be demand 'XX, coming constantly they're looking able their going if have customers to already asking 'XX, meet

from us year the sure, For to as year. year we the last well a and that to wins truck going additional be the programs wins this high as is 'XX for got relative

the we needed think [ capacity still ]. I have

Timothy Moore

it's good imagine Good. to and efficient or No, be up additions. done going seems like XXXX no, to 'XX. yes, very bumping at it really least And you've late got I against

next sales talked of or else ] out unwind any that maybe of of one-off that the year? thing phasing in to additional -- February. you Just the over bit added little clarify, programs I [ one kind Volvo Is renewals Are there customers' you about that anything want program I to? one two maybe kind or mentioned could a know there be

David Duvall

that business. about wins the we talked about, that replacement just of XX% is Of

and we're So when they'd when know of constantly be time we be programs would ending the -- back. coming ahead

actually with with I programs. years and we the made Volvo program with ago. or at we're John I about Volvo with well of talking those parts as three actually those able great them challenge said, But part that that think the relationship have to was being least We're as them. a decision working think now was provide and new actually

John Zimmer

And off. three follow our bidding other any Yes. years sales up, one of Like to any on other that don't business we falling we're said, programs to really have Dave two, out. visibility goals actually

this we've We have last there is are and those years mentioned several business wins, of which three programs that year replacement year, out.

don't anything out really a Volvo And like so of. we have there aware we're that

We I those good the we operationally really operationally. areas. I our to in in competitors about some that our have think gone relationships think we're challenges. And that strong are industry, made Dave do original all this pretty of compared through some think customer comment where are

so away are other have that. at we this And We've we're know that that of got been anything there's and go like really win the to awarded major point no think right. programs placed really business, or I

David Duvall

was I the model worked think XXXX, right, of Gap] 'XX. business past really on in what we've does lot in we that [Audio seen getting a being what the

Operator

showing to queue, I remarks. in are for does would questioners over turn any no closing question-and-answer further session. back And we the conference Dave at this conclude this Duvall time, like and our to the now

David Duvall

report ] in to when progress August. you York forward results IDEAS and June, much, we We'll the thank quarter on day. East look you in in a Thank and Coast our Conference New we providing very the an interest have your in second So for update continued in company. upcoming great participate [ our

Operator

disconnect. Thank concluded. you The today's conference and attending may for you now now presentation, has

Core Molding (CMT) 7 May 242024 Q1 Earnings call transcript