Core Molding Technologies Delivers Robust 2nd Quarter 2017
Core Molding Technologies, Inc. $CMT today announced results for the second quarter ended June 30, 2017.
“Core Molding delivered strong bottom line growth in the second quarter of 2017 with net income increasing 48% relative to the second quarter of 2016,” said Kevin Barnett, President and Chief Executive Officer. “Product sales were flat as we experienced a 1% decline in product sales to our heavy-duty truck customers offset by higher sales to our marine customers. Notably, the flat sales to our heavy-duty truck customers is a meaningful improvement over the double-digit declines we experienced in the past several quarters. Sales to our truck customers increased approximately 20% versus the first quarter of 2017, which we believe is indicative of a recovery in the truck market.”
Second Quarter 2017 Compared to Second Quarter 2016:
Net sales were $47.4 million compared to $39.0 million.
Product sales were $36.8 million compared to $36.8 million.
Gross margin was 15.5% compared to 16.2%.
Operating income was $3.2 million compared to $2.3 million.
Net income was $2.2 million, or $0.28 per diluted share, compared with $1.5 million, or $0.19 per diluted share.
First Half 2017 Compared to First Half 2016:
Net sales were $84.1 million compared to $84.5 million.
Product sales were $73.1 million compared to $79.3 million.
Gross margin was 16.5% compared to 18.0%.
Operating income was $5.7 million compared to $6.7 million.
Net income was $3.8 million, or $0.50 per diluted share, compared with $4.4 million, or $0.57 per diluted share.
Second quarter and first half 2017 gross margin decreases were primarily a result of revenue mix and higher raw material cost. A portion of the raw material cost increase was caused by unplanned production downtime at a key supplier which resulted in a short-term increase in certain raw material costs.
Higher sales in the second quarter 2017 compared to 2016 and better selling, general and administrative expense leverage increased the Company’s operating and net income amounts compared to second quarter 2016.
Financial Position at June 30, 2017:
Cash and cash equivalents of $31.1 million.
Total assets of $139.4 million.
Total debt of $8.3 million.
Stockholders’ equity of $101.4 million.
The Company increased its cash position at June 30, 2017 to $31.1 million from $28.3 million at December 31, 2016, as a result of positive cash flows from operations for the year.
Mr. Barnett stated, “Looking forward to the second half of 2017, industry sources have raised their forecasts for 2017 and are now predicting North American heavy-duty truck production to be approximately 8% higher for full year 2017 compared to full year 2016. In addition, industry analysts continue to forecast year-over-year increases for Class 8 truck production in 2018 and 2019. We continue to be encouraged about our future growth prospects based on these favorable industry forecasts for the next two to three years.”
Mr. Barnett concluded, “Identifying and evaluating potential opportunities to further diversify into new markets, new materials and new processes remains a top priority for Core Molding. The Company’s consistent free cash flow generation enhances our strong balance sheet, and while we plan to utilize our strong liquidity position to grow via acquisition, we will remain disciplined in evaluating opportunities and executing transactions. Given the potential for increased demand in our main end-market, we have our sights set on growing organically as well. With stronger demand, focus on continuous improvement efforts to drive efficiencies, and a disciplined approach to acquisitions, we remain optimistic in our ability to build shareholder value in the near and longer term.”
About Core Molding Technologies, Inc.
Core serves a wide variety of markets, including the medium and heavy-duty truck, marine, automotive, agriculture, construction and other commercial products markets. Headquartered in Columbus, Ohio, Core maintains plants in Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota; and Matamoros, Mexico.
For further information, visit the company's website at: http://www.coremt.com
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