Attached files
file | filename |
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EX-31.B - EXHIBIT 31(B) - CORE MOLDING TECHNOLOGIES INC | c92535exv31wb.htm |
EX-32.A - EXHIBIT 32(A) - CORE MOLDING TECHNOLOGIES INC | c92535exv32wa.htm |
EX-32.B - EXHIBIT 32(B) - CORE MOLDING TECHNOLOGIES INC | c92535exv32wb.htm |
EX-31.A - EXHIBIT 31(A) - CORE MOLDING TECHNOLOGIES INC | c92535exv31wa.htm |
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2009
OR
o | 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 | |
(State or other jurisdiction | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
800 Manor Park Drive | ||
Columbus, Ohio | 43228-0183 | |
(Address of principal executive office) | (Zip Code) |
Registrants 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 þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes o NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated
filer, large accelerated filer, and smaller reporting company, in Rule 12b-2 of the Exchange
Act (Check one).
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the
Exchange Act.
Yes o NO þ
As of November 13, 2009, the latest practicable date, 7,001,106 shares of the registrants
common stock were issued and outstanding.
Table of Contents
Item 1. Financial Statements |
||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
16 | ||||||||
Item 3. Not required for smaller reporting company |
||||||||
23 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
25 | ||||||||
26 | ||||||||
Exhibit 31(a) | ||||||||
Exhibit 31(b) | ||||||||
Exhibit 32(a) | ||||||||
Exhibit 32(b) |
2
Table of Contents
Part 1 Financial Information
Core Molding Technologies, Inc. and Subsidiaries
Core Molding Technologies, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash |
$ | 841,004 | $ | | ||||
Accounts receivable (less allowance for doubtful accounts: |
||||||||
September 30, 2009 and December 31, 2008 - $109,000) |
14,391,492 | 15,435,103 | ||||||
Inventories: |
||||||||
Finished goods |
1,257,238 | 3,533,246 | ||||||
Work in process |
1,214,718 | 1,458,602 | ||||||
Stores |
4,297,981 | 4,740,375 | ||||||
Total inventories |
6,769,937 | 9,732,223 | ||||||
Current portion of deferred tax asset |
1,869,198 | 1,869,198 | ||||||
Foreign sales tax receivable |
623,995 | 584,230 | ||||||
Income tax receivable |
84,604 | | ||||||
Prepaid expenses and other current assets |
1,332,660 | 876,094 | ||||||
Total current assets |
25,912,890 | 28,496,848 | ||||||
Property, plant and equipment |
81,456,271 | 71,970,638 | ||||||
Accumulated depreciation |
(35,796,500 | ) | (33,155,187 | ) | ||||
Property, plant and equipment -net |
45,659,771 | 38,815,451 | ||||||
Deferred tax asset |
5,297,840 | 5,318,623 | ||||||
Goodwill |
1,097,433 | 1,097,433 | ||||||
Other assets |
46,336 | 102,737 | ||||||
Total |
$ | 78,014,270 | $ | 73,831,092 | ||||
Liabilities and Stockholders Equity |
||||||||
Liabilities: |
||||||||
Current liabilities |
||||||||
Current portion of long-term debt |
$ | 3,660,005 | $ | 2,905,716 | ||||
Notes payable line of credit |
| 1,193,965 | ||||||
Current portion of postretirement benefit liability |
520,000 | 520,000 | ||||||
Accounts payable |
4,355,224 | 6,866,388 | ||||||
Tooling in progress |
978,292 | 212,065 | ||||||
Accrued liabilities: |
||||||||
Compensation and related benefits |
3,898,063 | 4,715,884 | ||||||
Interest payable |
125,670 | 96,103 | ||||||
Taxes |
| 427,972 | ||||||
Other |
825,433 | 928,080 | ||||||
Total current liabilities |
14,362,687 | 17,866,173 | ||||||
Long-term debt |
18,657,842 | 11,129,184 | ||||||
Interest rate swaps |
309,247 | 502,381 | ||||||
Postretirement benefit liability |
16,101,864 | 15,357,897 | ||||||
Commitments and Contingencies |
||||||||
Stockholders Equity: |
||||||||
Preferred stock $0.01 par value, authorized shares 10,000,000;
Outstanding shares: September 30, 2009 and December 31, 2008 - 0 |
| | ||||||
Common stock $0.01 par value, authorized shares - 20,000,000;
Outstanding shares: 6,794,005 at September 30, 2009 and
6,765,790 at December 31, 2008 |
67,940 | 67,658 | ||||||
Paid-in capital |
23,268,988 | 23,002,472 | ||||||
Accumulated other comprehensive loss, net of income tax benefit |
(1,052,634 | ) | (1,092,977 | ) | ||||
Treasury stock |
(26,179,054 | ) | (26,179,054 | ) | ||||
Retained earnings |
32,477,390 | 33,177,358 | ||||||
Total stockholders equity |
28,582,630 | 28,975,457 | ||||||
Total |
$ | 78,014,270 | $ | 73,831,092 | ||||
See notes to unaudited consolidated financial statements.
3
Table of Contents
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net sales: |
||||||||||||||||
Products |
$ | 19,801,193 | $ | 29,497,102 | $ | 54,275,278 | $ | 84,875,561 | ||||||||
Tooling |
4,624,339 | 533,461 | 5,834,479 | 4,179,133 | ||||||||||||
Total sales |
24,425,532 | 30,030,563 | 60,109,757 | 89,054,694 | ||||||||||||
Total cost of sales |
20,441,551 | 23,992,701 | 53,568,170 | 73,079,663 | ||||||||||||
Gross margin |
3,983,981 | 6,037,862 | 6,541,587 | 15,975,031 | ||||||||||||
Total selling, general and
administrative expense |
2,131,030 | 3,186,040 | 6,886,771 | 8,994,194 | ||||||||||||
Income (loss) before interest and taxes |
1,852,951 | 2,851,822 | (345,184 | ) | 6,980,837 | |||||||||||
Interest expense |
(516,904 | ) | (179,395 | ) | (657,298 | ) | (540,866 | ) | ||||||||
Income (loss) before income taxes |
1,336,047 | 2,672,427 | (1,002,482 | ) | 6,439,971 | |||||||||||
Income tax expense (benefit) |
509,026 | 984,500 | (302,514 | ) | 2,171,630 | |||||||||||
Net income (loss) |
$ | 827,021 | $ | 1,687,927 | $ | (699,968 | ) | $ | 4,268,341 | |||||||
Net income (loss) per common share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.25 | $ | (0.10 | ) | $ | 0.63 | |||||||
Diluted |
$ | 0.12 | $ | 0.24 | $ | (0.10 | ) | $ | 0.61 | |||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
6,794,005 | 6,748,590 | 6,768,467 | 6,740,225 | ||||||||||||
Diluted |
6,838,815 | 7,048,520 | 6,811,515 | 7,054,157 | ||||||||||||
See notes to unaudited consolidated financial statements.
4
Table of Contents
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statement of Stockholders Equity
(Unaudited)
Accumulated | ||||||||||||||||||||||||||||
Common Stock | Other | Total | ||||||||||||||||||||||||||
Outstanding | Paid-In | Retained | Comprehensive | Treasury | Stockholders | |||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Income (Loss) | Stock | Equity | ||||||||||||||||||||||
Balance at January 1,
2009 |
6,765,790 | $ | 67,658 | $ | 23,002,472 | $ | 33,177,358 | $ | (1,092,977 | ) | $ | (26,179,054 | ) | $ | 28,975,457 | |||||||||||||
Net loss |
| | | (699,968 | ) | | | (699,968 | ) | |||||||||||||||||||
Hedge accounting
effect of the interest
rate swaps, net of
deferred income tax
expense of $18,424 |
| | | | 40,343 | | 40,343 | |||||||||||||||||||||
Comprehensive
loss |
| | | | | | (659,625 | ) | ||||||||||||||||||||
Restricted stock |
28,215 | 282 | 145,365 | | | | 145,647 | |||||||||||||||||||||
Share-based
compensation |
| | 121,151 | | | | 121,151 | |||||||||||||||||||||
Balance at September
30, 2009 |
6,794,005 | $ | 67,940 | $ | 23,268,988 | $ | 32,477,390 | $ | (1,052,634 | ) | $ | (26,179,054 | ) | $ | 28,582,630 | |||||||||||||
See notes to unaudited consolidated financial statements.
5
Table of Contents
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended | ||||||||
September 30, | ||||||||
2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ | (699,968 | ) | $ | 4,268,341 | |||
Adjustments to reconcile net (loss) income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
2,858,169 | 2,683,383 | ||||||
Deferred income taxes |
2,359 | (42,162 | ) | |||||
Changes in fair value of swaps |
(134,365 | ) | 54,573 | |||||
Share based compensation |
266,797 | 254,154 | ||||||
Loss on disposal of assets |
31,405 | | ||||||
Gain on translation of foreign currency financial statements |
(70,908 | ) | (26,077 | ) | ||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable |
1,043,611 | (7,436,212 | ) | |||||
Inventories |
2,962,286 | 380,083 | ||||||
Prepaid and other assets |
(335,728 | ) | (172,882 | ) | ||||
Accounts payable |
(2,295,039 | ) | (185,845 | ) | ||||
Accrued and other liabilities |
(637,250 | ) | 2,304,415 | |||||
Postretirement benefits liability |
743,967 | 1,078,013 | ||||||
Net cash provided by operating activities |
3,735,336 | 3,159,784 | ||||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant and equipment |
(9,776,993 | ) | (7,794,907 | ) | ||||
Proceeds from sale of property, plant and equipment |
18,000 | | ||||||
Net cash used in investing activities |
(9,758,993 | ) | (7,794,907 | ) | ||||
Cash flows from financing activities: |
||||||||
Financing costs for new credit agreement |
(224,321 | ) | | |||||
Gross repayments on line of credit |
(34,389,061 | ) | (33,752,230 | ) | ||||
Gross borrowings on line of credit |
33,195,096 | 39,691,140 | ||||||
Payments of principal on long term debt |
(1,995,716 | ) | (1,394,287 | ) | ||||
Borrowing on construction loans |
10,278,663 | | ||||||
Proceeds from issuance of common stock |
| 90,500 | ||||||
Net cash provided by financing activities |
6,864,661 | 4,635,123 | ||||||
Net change in cash and cash equivalents |
841,004 | | ||||||
Cash and cash equivalents at beginning of period |
| | ||||||
Cash and cash equivalents at end of period |
$ | 841,004 | $ | | ||||
Cash paid for: |
||||||||
Interest |
$ | 738,121 | $ | 463,650 | ||||
Income taxes (net of tax refunds) |
$ | 275,884 | $ | 1,561,622 | ||||
Non Cash: |
||||||||
Fixed asset purchases in accounts payable |
$ | 58,218 | $ | 143,827 | ||||
See notes to unaudited consolidated financial statements.
6
Table of Contents
Core Molding Technologies, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited 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 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 or the Company) at September
30, 2009, the results of operations for the three and nine months ended September 30, 2009, and the
cash flows for the nine months ended September 30, 2009. The Notes to Consolidated Financial
Statements, which are contained in the 2008 Annual Report to Shareholders, should be read in
conjunction with these 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. Core Molding Technologies
operates four production facilities in Columbus, Ohio; Batavia, Ohio; Gaffney, South Carolina; and
Matamoros, Mexico. The Columbus and Gaffney facilities produce reinforced plastics by compression
molding sheet molding compound (SMC) in a closed mold process. The Batavia facility produces
reinforced plastic products by a robotic spray-up open mold process and resin transfer molding
(RTM) closed mold process utilizing multiple insert tooling (MIT). The Matamoros facility
utilizes spray-up and hand lay-up open mold processes as well as RTM and SMC closed mold processes
to produce reinforced plastic products.
2. Net Income (Loss) per Common Share
Net income (loss) per common share is computed based on the weighted average number of common
shares outstanding during the period. Diluted net income (loss) per common share is computed
similarly but includes the effect of the assumed exercise of dilutive stock options and restricted
stock under the treasury stock method.
The computation of basic and diluted net income (loss) per common share is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net income (loss) |
$ | 827,021 | $ | 1,687,927 | $ | (699,968 | ) | $ | 4,268,341 | |||||||
Weighted average common shares
outstanding |
6,794,005 | 6,748,590 | 6,768,467 | 6,740,225 | ||||||||||||
Plus: dilutive options assumed exercised |
85,600 | 550,225 | | 550,225 | ||||||||||||
Less: shares assumed repurchased with
proceeds from exercise |
(82,114 | ) | (283,037 | ) | | (281,788 | ) | |||||||||
Plus: dilutive effect of nonvested
restricted
stock grants |
41,324 | 32,742 | 43,048 | 45,495 | ||||||||||||
Weighted average common and potentially
issuable common shares outstanding |
6,838,815 | 7,048,520 | 6,811,515 | 7,054,157 | ||||||||||||
Basic net income (loss) per common share |
$ | 0.12 | $ | 0.25 | $ | (0.10 | ) | $ | 0.63 | |||||||
Diluted net income (loss) per common share |
$ | 0.12 | $ | 0.24 | $ | (0.10 | ) | $ | 0.61 |
At
September 30, 2009 and 2008, 558,825 and 25,000, respectively,
of outstanding stock options were not included in diluted earnings per share as
they were anti-dilutive.
7
Table of Contents
3. Sales
Core Molding Technologies currently has three major customers, Navistar, Inc. (Navistar) formerly
known as International Truck & Engine Corporation, PACCAR, Inc. (PACCAR) and Daimler Trucks North
America LLC (Daimler). Major customers are defined as customers whose sales individually consist
of more than ten percent of total sales. The following table presents sales revenue for the
above-mentioned customers for the three and nine months ended September 30, 2009 and 2008:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Navistar product sales |
$ | 10,435,844 | $ | 17,434,140 | $ | 29,472,716 | $ | 47,533,592 | ||||||||
Navistar tooling sales |
1,985,183 | 74,750 | 2,459,931 | 2,868,221 | ||||||||||||
Total Navistar sales |
12,421,027 | 17,508,890 | 31,932,647 | 50,401,813 | ||||||||||||
PACCAR product sales |
6,638,196 | 7,350,397 | 16,312,744 | 22,424,684 | ||||||||||||
PACCAR tooling sales |
281,200 | 380,818 | 488,020 | 840,964 | ||||||||||||
Total PACCAR sales |
6,919,396 | 7,731,215 | 16,800,764 | 23,265,648 | ||||||||||||
Daimler product sales |
1,055,855 | 1,969,850 | 2,808,550 | 6,063,210 | ||||||||||||
Daimler tooling sales |
1,790,805 | 16,500 | 1,790,805 | 101,650 | ||||||||||||
Total Daimler sales |
2,846,660 | 1,986,350 | 4,599,355 | 6,164,860 | ||||||||||||
Other product sales |
1,671,298 | 2,742,715 | 5,681,268 | 8,854,075 | ||||||||||||
Other tooling sales |
567,151 | 61,393 | 1,095,723 | 368,298 | ||||||||||||
Total other sales |
2,238,449 | 2,804,108 | 6,776,991 | 9,222,373 | ||||||||||||
Total product sales |
19,801,193 | 29,497,102 | 54,275,278 | 84,875,561 | ||||||||||||
Total tooling sales |
4,624,339 | 533,461 | 5,834,479 | 4,179,133 | ||||||||||||
Total sales |
$ | 24,425,532 | $ | 30,030,563 | $ | 60,109,757 | $ | 89,054,694 | ||||||||
4. Comprehensive Income (Loss)
Comprehensive income (loss) represents net income (loss) plus the results of certain equity changes
not reflected in the Consolidated Statements of Operations. The components of comprehensive income
(loss), net of tax, are as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net income (loss) |
$ | 827,021 | $ | 1,687,927 | $ | (699,968 | ) | $ | 4,268,341 | |||||||
Hedge accounting effect of
interest rate swaps, net
of deferred income tax
expense of $8,394 and
$18,424 for the three and
nine months ended
September 30, 2009 and
deferred income tax
expense of $11,996 and
$9,209 for the three and
nine months ended
September 30, 2008,
respectively |
19,729 | 23,286 | 40,343 | 17,877 | ||||||||||||
Amortization of previously
unrecognized
postretirement plan loss,
net of deferred income tax
benefit of $11,361 and
$34,083 for the three and
nine months ended
September 30, 2008,
respectively. |
| 20,639 | | 61,916 | ||||||||||||
Comprehensive income (loss) |
$ | 846,750 | $ | 1,731,852 | $ | (659,625 | ) | $ | 4,348,134 | |||||||
8
Table of Contents
5. Postretirement Benefits
The components of expense for all of Core Molding Technologies postretirement benefit plans for
the three and nine months ended September 30, 2009 and 2008 are as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Pension expense: |
||||||||||||||||
Defined contribution plan
contributions |
$ | 77,000 | $ | 66,000 | $ | 253,000 | $ | 315,000 | ||||||||
Multi-employer plan
contributions |
109,000 | 126,000 | 304,000 | 389,000 | ||||||||||||
Total pension expense |
186,000 | 192,000 | 557,000 | 704,000 | ||||||||||||
Health and life insurance: |
||||||||||||||||
Service cost |
152,000 | 159,000 | 456,000 | 477,000 | ||||||||||||
Interest cost |
237,000 | 263,000 | 711,000 | 788,000 | ||||||||||||
Amortization of net loss |
| 32,000 | | 96,000 | ||||||||||||
Net periodic benefit cost |
389,000 | 454,000 | 1,167,000 | 1,361,000 | ||||||||||||
Total postretirement
benefits expense |
$ | 575,000 | $ | 646,000 | $ | 1,724,000 | $ | 2,065,000 | ||||||||
Core Molding Technologies has made contributions of approximately $707,000 to pension plans and
$423,000 of postretirement healthcare payments through September 30, 2009 and expects to make
approximately $102,000 of pension payments through the remainder of 2009. The Company also expects
to make approximately $97,000 of postretirement healthcare payments through the remainder of 2009,
all of which are accrued at September 30, 2009.
6. Debt
Credit Agreement; Amendments
In December of 2008, the Company and its subsidiary, Corecomposites de Mexico, S. de R.L. de C.V.,
entered into a Credit Agreement (the Credit Agreement) with KeyBank National Association
(KeyBank) as a lender, lead arranger, sole book runner and administrative agent. Under the Credit
Agreement, KeyBank has made certain loans, which include (i) a $12,000,000 construction loan, (ii)
an $8,000,000 construction loan, (iii) an $8,000,000 revolving credit commitment, (iv) a $2,678,563
term loan to refinance a previous term loan with KeyBank, and (v) a letter of credit in an undrawn
face amount of $3,332,493 with respect to the Companys existing industrial development revenue
bond financing.
On March 31, 2009, the Company entered into the first amendment to the Credit Agreement with
KeyBank (the First Amendment). Pursuant to the terms of the First Amendment, the lender agreed to
modify certain terms of the Credit Agreement. These modifications included (1) modification of the
definition of EBITDA to add back transition costs up to $3,200,000 associated with the transition
and startup of the new production facility in Matamoros and add back certain non-cash compensation
expense (2) modification of the fixed charge definition to exclude from consolidated interest
expense any measure of ineffectiveness from interest rate swaps and amortization of loan
origination and issuance costs (3) modification of the leverage ratio from 3.0x to 3.2x at June 30,
2009, 3.4x at September 30, 2009, and 3.2x at December 31, 2009 (4) increase the applicable margin
for interest rates applicable to LIBOR loans effective March 31, 2009 to 400 basis points for both
construction loans and the revolving line of credit; all rates decrease 25 basis points upon
reaching a leverage ratio of less than 2.25 to 1.00 (5) increase the letter of credit fee on the
Industrial Revenue Bond to 300 basis points (6) increase the 100 basis point LIBOR floor on the
$8,000,000 construction loan and revolving line of credit to 150 basis points and (7) implement a
150 basis point LIBOR floor on the $12,000,000 construction loan.
On June 30, 2009, the Company entered into the second amendment (the Second Amendment) to the
Credit Agreement, dated as of December 9, 2008, with KeyBank. Pursuant to the terms of the Second
Amendment, the parties agreed to modify certain terms of the Credit Agreement. These modifications
included (1) an increase in the applicable margin for interest rates applicable to LIBOR loans to
450 basis points, effective June 30, 2009, for both construction loans and the revolving line of
credit; with all rates other than rates applicable to the term loan decreasing by 25 basis points
upon reaching a leverage ratio of less than 2.25 to 1.00, (2) a decrease in the
applicable margin for the interest rate applicable to the term loan to 200 basis points in excess
of LIBOR or the Base Rate, (3) a change in the definition of consolidated EBITDA to add back
non-cash post-retirement expenses minus retirement benefits paid in cash, (4) the deletion of the
150 basis point interest rate floor from the LIBOR rates applicable to the $8,000,000 and
$12,000,000 construction loans and the revolving line of credit, and (5) the extension of the
commitment for the revolving line of credit to April 30, 2011.
9
Table of Contents
Bank Covenants
The Company is required to meet certain financial covenants included in the Credit Agreement with
respect to leverage ratios, fixed charge ratios, capital expenditures as well as other customary
affirmative and negative covenants. As of September 30, 2009, the Company was in compliance with
its financial covenants associated with the loans made under the Credit Agreement as described
above, as well as financial covenants contained in certain equipment leases to which the Company is
a party.
Based upon the Companys forecasts, which are primarily based on industry analysts estimates of
2009 and 2010 heavy and medium-duty truck production volumes as well as other assumptions
management believes to be reasonable, management believes that the Company will be able to maintain
compliance with the financial covenants set forth in the Credit Agreement, as amended by the First
Amendment and Second Amendment, for the next 12 months. Management believes that cash flow from
operating activities together with available borrowings under the Credit Agreement will be
sufficient to meet Core Molding Technologies liquidity needs. However, if a material adverse
change in the financial position of Core Molding Technologies should occur, or if actual sales or
expenses are substantially different than what has been forecasted, Core Molding Technologies
liquidity and ability to obtain further financing to fund future operating and capital requirements
could be negatively impacted.
Interest Rate Swaps
In conjunction with its variable rate Industrial Revenue Bond (IRB) the Company has entered into
an interest rate swap agreement, which is designated as a cash flow hedging instrument. Under this
agreement, the Company pays a fixed rate of 4.89% to the counterparty and receives 76% of the
30-day commercial paper rate. The swap term and notional amount matches the payment schedule on
the IRB with final maturity in April 2013. The difference paid or received varies as short-term
interest rates change and is accrued and recognized as an adjustment to interest expense. While
the Company is exposed to credit loss on its interest rate swap in the event of non-performance by
the counterparty to the swap, management believes such non-performance is unlikely to occur given
the financial resources of the counterparty. The effectiveness of the swap is assessed at each
financial reporting date by comparing the commercial paper rate of the swap to the benchmark rate
underlying the variable rate of the IRB. Any ineffectiveness of the swap is recorded as an
adjustment to interest expense and historically has not been material. Interest income of $34,264
and interest expense of $54,574 was recorded for the nine months ended September 30, 2009 and 2008,
respectively, related to ineffectiveness of the swap. The fair value of the swap was recorded as a
liability of $228,049 and $322,108 as of September 30, 2009 and December 31, 2008, respectively.
None of the changes in fair value of the interest rate swap have been excluded from the assessment
of hedge effectiveness.
Effective January 1, 2004, the Company entered into an interest rate swap agreement, which is
designated as a cash flow hedge of the Companys bank term loan. Under this agreement, the Company
pays a fixed rate of 5.75% to the counterparty and receives LIBOR plus 200 basis points. The swap
term and notional amount match the payment schedule on the bank note payable with final maturity in
January 2011. The interest rate swap is a highly effective hedge because the amount, benchmark
interest rate index, term, and repricing dates of both the interest rate swap and the hedged
variable interest cash flows are exactly the same. The fair value of the swap was recorded as a
liability of $40,195 and $79,973 as of September 30, 2009 and December 31, 2008 respectively.
While the Company is exposed to credit loss on its interest rate swap in the event of
non-performance by the counterparty to the swap, management believes that such non-performance is
unlikely to occur given the financial resources of the counterparty.
Effective December 18, 2008, the Company entered into an interest rate swap agreement that became
effective May 1, 2009, which was designated as a cash flow hedge of the $12,000,000 construction
loan. Under this agreement, the Company pays a fixed rate of 2.295% to the counterparty and
receives LIBOR. Effective March 31, 2009, the interest terms in the Companys Credit Agreement
related to the $12,000,000 construction loan were amended. The Company calculated an effectiveness
test for the interest rate swap after this amendment and determined that the interest rate swap was
no longer highly effective. As a result, the Company discontinued the use of hedge accounting
effective March 31, 2009 related to this swap, and began recording mark-to-market adjustments
within
interest expense in the Companys Consolidated Statement of Operations. The pre-tax amount
previously recognized in Accumulated Other Comprehensive Loss, totaling $145,684 as of March 31,
2009, is being amortized as an increase to interest expense of $1,145 per month, net of tax, over
the remaining term of the interest rate swap agreement beginning June 2009. The fair value of the
swap as of September 30, 2009 and December 31, 2008 was recorded as a liability of $41,003 and
$100,300, respectively. The Company recorded a reduction to interest expense of $104,681 for a
mark-to-market adjustment of swap fair value for the nine months ended September 30, 2009 related
to this swap.
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Line of Credit
At September 30, 2009, the Company had available under the Credit Agreement an $8,000,000 variable
rate bank revolving line of credit scheduled to mature on April 30, 2011. The line of credit bears
interest at LIBOR plus 450 basis points. The line of credit is collateralized by all of the
Companys assets. At September 30, 2009 there was no balance on the Companys line of credit and
at December 31, 2008, the line of credit had a balance of $1,194,000.
7. Income Taxes
Income tax benefit for the nine months ended September 30, 2009 is estimated to be approximately
30% of total loss before income taxes. For the nine months ended September 30, 2008, income taxes
were estimated to be 34% of total income before income taxes. The change in the effective tax rate
is primarily due to certain expenses being non-deductible in the
Companys Mexican subsidiary.
As of September 30, 2009, the Company had no liability for unrecognized tax positions.
The Company files U.S. federal and state income tax returns as well as income tax returns in
Mexico. The Company is no longer subject to U.S. federal and state income tax examinations by tax
authorities for years before 2005 and is subject to income tax examinations by Mexican authorities
since the Company began business in Mexico in 2001. The Company does not anticipate that its
unrecognized tax benefits will significantly change within the next twelve months. The Companys
2006 U.S. federal income tax return was previously subject to an audit by the Internal Revenue
Service (IRS). The audit was completed in March 2009 with no findings and the Company received a
statement of no change from the IRS. There are currently no income tax audits in process.
8. Stock Based Compensation
The Company has a Long Term Equity Incentive Plan (the 2006 Plan), as approved by the Companys
stockholders in May 2006. This 2006 Plan replaced the Long Term Equity Incentive Plan (the
Original Plan) as originally approved by the stockholders in May 1997 and as amended in May 2000.
The 2006 Plan allows for grants to directors and key employees of non-qualified stock options,
incentive stock options, stock appreciation rights, restricted stock, performance shares,
performance units and other incentive awards (Stock Awards) up to an aggregate of 3,000,000
awards, each representing a right to buy a share of Core Molding Technologies common stock. Stock
Awards can be granted under the 2006 Plan through the earlier of December 31, 2015, or the date the
maximum number of available awards under the 2006 Plan have been granted.
Stock Options
The following summarizes the activity relating to stock options under the plans mentioned above for
the nine months ended September 30, 2009:
Number | Weighted | |||||||
of | Average | |||||||
Shares | Exercise Price | |||||||
Outstanding at December 31, 2008 |
570,225 | $ | 3.30 | |||||
Exercised |
| | ||||||
Granted |
| | ||||||
Forfeited |
(11,400 | ) | 3.21 | |||||
Outstanding at September 30, 2009 |
558,825 | $ | 3.30 | |||||
Exercisable at September 30, 2009 |
487,115 | $ | 3.29 | |||||
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The following summarizes the status of, and changes to, unvested options during the nine months
ended September 30, 2009:
Number | Weighted | |||||||
of | Average | |||||||
Shares | Exercise Price | |||||||
Unvested at December 31, 2008 |
88,830 | $ | 3.37 | |||||
Granted |
| | ||||||
Vested |
(17,120 | ) | 3.24 | |||||
Forfeited |
| | ||||||
Unvested at September 30, 2009 |
71,710 | $ | 3.40 | |||||
At September 30, 2009 and 2008, there was $78,884 and $170,208, respectively, of total unrecognized
compensation expense, related to unvested stock options granted under the plans. Total
compensation cost related to incentive stock options for the nine months ended September 30, 2009
and 2008 was $66,895 and, $93,220, respectively. This compensation expense is allocated such that
$59,028 and $66,977 is included in selling, general and administrative expense and $7,867 and
$26,243 is recorded in cost of sales for the nine months ended September 30, 2009 and 2008,
respectively.
Restricted Stock
In May of 2006, Core Molding Technologies began granting shares of its common stock to certain
directors, officers, and key managers in the form of unvested stock (Restricted Stock). These
awards are recorded at the market value of Core Molding Technologies common stock on the date of
issuance and amortized ratably as compensation expense over the applicable vesting period.
The following summarizes the status of Restricted Stock grants as of September 30, 2009 and changes
during the nine months ended September 30, 2009:
Weighted | ||||||||
Number | Average | |||||||
of | Grant Date | |||||||
Shares | Fair Value | |||||||
Unvested balance at December 31, 2008 |
85,106 | $ | 7.01 | |||||
Granted |
150,210 | 2.56 | ||||||
Vested |
(28,215 | ) | 5.16 | |||||
Forfeited |
| | ||||||
Unvested at September 30, 2009 |
207,101 | $ | 4.04 | |||||
As of September 30, 2009 and 2008, there was $480,269 and $421,954, respectively, of total
unrecognized compensation expense related to Restricted Stock granted under the 2006 Plan. The
total compensation costs related to Restricted Stock grants for the nine months ended September 30,
2009 and 2008 was $199,902 and $160,934, respectively, all of which was recorded to selling,
general and administrative expense.
9. Fair Value of Financial Instruments
The Companys financial instruments consist of long-term debt, interest rate swaps, accounts
receivable, and accounts payable. The carrying amount of these financial instruments approximated
their fair value.
In September 2006, the Financial Accounting Standards Board, (FASB) issued a standard to define
fair value, establish a framework for measuring fair value and to expand disclosures about fair
value measurements. This standard does not change the requirements to apply fair value in existing
accounting standards. Under this standard, fair value refers to the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market
participants in the market in which the reporting entity transacts. The standard clarifies that
fair value should be based on the assumptions market participants would use when pricing the asset
or liability.
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To increase consistency and comparability in fair value measurements, this standard establishes a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value
into three levels. The level in the fair value hierarchy disclosed is based on the lowest level of
input that is significant to the fair value measurement. The three levels of the fair value
hierarchy are as follows:
| Level 1 inputs are quoted prices (unadjusted) in active markets for
identical asset or liabilities that the company has the ability to
access as of the reporting date. |
||
| Level 2 inputs are inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly or indirectly through corroboration with observable market
data. |
||
| Level 3 inputs are unobservable inputs, such as internally developed
pricing models for the asset or liability due to little or no market
activity for the asset or liability. |
The following table presents financial liabilities measured and recorded at fair value on the
Companys Consolidated Balance Sheet (unaudited) on a recurring basis and their level within the
fair value hierarchy as of September 30, 2009 and December 31, 2008:
Quoted Prices in | Significant | |||||||||||||||
Active Markets | Other | Significant | ||||||||||||||
for Identical | Observable | Unobservable | Balance as of | |||||||||||||
Assets | Inputs | Inputs | September 30, | |||||||||||||
Recurring Fair Value Measurements | (Level 1) | (Level 2) | (Level 3) | 2009 | ||||||||||||
Liabilities |
||||||||||||||||
Interest rate swaps |
$ | | $ | 309,247 | $ | | $ | 309,247 | ||||||||
Total |
$ | | $ | 309,247 | $ | | $ | 309,247 | ||||||||
December 31, | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2008 | |||||||||||||
Liabilities |
||||||||||||||||
Interest rate swaps |
$ | | $ | 502,381 | $ | | $ | 502,381 | ||||||||
Total |
$ | | $ | 502,381 | $ | | $ | 502,381 | ||||||||
There were no non-recurring fair value measurements for the quarter ended September 30, 2009.
In March 2008, the FASB issued a standard to amend and expand the disclosure requirements of
derivative instruments with the intent to provide users of the financial statements with an
enhanced understanding of how and why an entity uses derivative instruments, how these derivatives
are accounted for and how the respective reporting entitys financial statements are affected.
This standard is effective for fiscal years and interim periods beginning after November 15, 2008,
and earlier application is encouraged. The Company adopted this standard on January 1, 2009.
Core Molding Technologies derivative instruments located on the Consolidated Balance Sheets
(unaudited) were as follows:
September 30, | December 31, | |||||||||||
2009 | 2008 | |||||||||||
Balance Sheet Location | Fair Value | Fair Value | ||||||||||
Derivatives designated as hedging instruments |
||||||||||||
Interest rate risk activities |
Interest rate swaps | $ | 268,244 | $ | 502,381 | |||||||
Derivatives not designated as hedging instruments |
||||||||||||
Interest rate risk activities |
Interest rate swap | $ | 41,003 | $ | | |||||||
Total Derivatives |
$ | 309,247 | $ | 502,381 | ||||||||
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The effect of derivative instruments on the Consolidated Statements of Operations (unaudited)
was as follows:
Derivatives in Cash Flow Hedging Relationships
Location of Gain (Loss) | ||||||||||||||||||||
Derivatives in | Amount of Gain (Loss) | Reclassified from | Amount of Gain (Loss) | |||||||||||||||||
Cash Flow Hedging | Recognized in OCI on | AOCI into Income | Reclassified from AOCI into | |||||||||||||||||
Relationships | Derivative (Effective Portion) | (Effective Portion) | Expense (Effective Portion) | |||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||
Three months ended | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Interest rate swaps |
$ | 27,363 | $ | (7,741 | ) | Interest expense, net | $ | (50,705 | ) | $ | (39,269 | ) | ||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||
Nine months ended |
2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Interest rate swaps |
$ | 88,453 | $ | (27,488 | ) | Interest expense, net | $ | (159,745 | ) | $ | (87,400 | ) | ||||||||
Location of Gain (Loss) | Amount of Gain (Loss) Recognized | |||||||||||
Recognized in Income on | in Income of Derivative | |||||||||||
Derivative (Ineffective Portion | (Ineffective Portion and Amount | |||||||||||
Derivatives in Cash Flow Hedging | and Amount Excluded from | Excluded from Effectiveness | ||||||||||
Relationships | Effectivness Testing) | Testing) | ||||||||||
September 30, | September 30, | |||||||||||
Three months ended | 2009 | 2008 | ||||||||||
Interest rate swaps |
Interest income (expense) | $ | 2,673 | $ | (43,022 | ) | ||||||
September 30, | September 30, | |||||||||||
Nine months ended |
2009 | 2008 | ||||||||||
Interest rate swaps |
Interest income (expense) | $ | 34,264 | $ | (54,574 | ) | ||||||
Derivatives not designated as hedging instruments
Amount of | ||||||||||||
Realized/Unrealized Gain | ||||||||||||
Derivatives Not Designated as Hedging | Location of Gain (Loss) Recognized in | (Loss) Recognized in Income | ||||||||||
Instruments | Income on Derivatives | on Derivatives | ||||||||||
September 30, | September 30, | |||||||||||
Three months ended | 2009 | 2008 | ||||||||||
Interest rate swap |
Interest income (expense) | $ | (120,769 | ) | $ | | ||||||
September 30, | September 30, | |||||||||||
Nine months ended |
2009 | 2008 | ||||||||||
Interest rate swap |
Interest income (expense) | $ | 100,102 | $ | | |||||||
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During first nine months of 2009 and 2008, the Company did not reclassify any amounts related
to its cash flow hedges from accumulated other comprehensive loss to earnings due to the
probability that certain forecasted transactions would not occur. As discussed in Note 6 above,
the Company discontinued the use of hedge
accounting for one of its interest rate swaps effective March 31, 2009, and began recording all
mark-to-market adjustments related to this interest rate swap within interest expense in the
Companys Consolidated Statement of Operations. It is anticipated that during the next twelve
months the expiration and settlement of cash flow hedge contracts along with the amortization of
losses on discontinued hedges will result in income statement recognition of amounts currently
classified in accumulated other comprehensive loss of approximately $13,736, net of taxes.
10. Recent Accounting Pronouncements
In June 2009, the FASB issued a standard regarding the FASB Accounting Standards
CodificationTM (the Codification), and the hierarchy of generally accepted accounting
principles, which replaces the standard previously issued by the FASB regarding the hierarchy of
generally accepted accounting principles (GAAP) in the United States. This standard identifies
the source of accounting principles and the framework for selecting the principles used in the
preparation of financial statements of non-governmental entities that are presented in conformity
with GAAP (the GAAP hierarchy). In addition, this standard establishes the Codification as the
single source of authoritative GAAP recognized by the FASB to be applied by non-governmental
entities in the preparation of financial statements in conformity with GAAP. All guidance
contained in the Codification carries an equal level of authority. This standard was effective for
financial statements issued for interim and annual periods ending after September 15, 2009. The
Company adopted this standard during the third quarter of 2009, and its adoption did not have a
significant impact on its financial statements.
In December 2008, the FASB issued a standard to amend guidance on an employers disclosures about
plan assets of a defined benefit pension or other postretirement plan. This standard is effective
for fiscal years ending after December 15, 2009 with earlier adoption permitted. The Company is
currently reviewing the additional disclosure requirements to determine the impact on the
Consolidated Financial Statements and Notes to Consolidated Financial Statements.
In February 2008, the FASB issued a standard, which delayed the effective date of accounting for
all nonrecurring fair value measurements of non-financial assets and liabilities until fiscal years
beginning after November 15, 2008. The Company has not recorded any nonrecurring fair value
measurements of non-financial assets and liabilities since adopting this standard on January 1,
2009.
In April 2009, the FASB issued a standard to provide additional guidance for estimating fair value
when the volume and level of activity for the asset or liability have significantly decreased. This
standard is effective for interim reporting periods ending after June 15, 2009, with early adoption
permitted. The adoption of this standard did not have a material impact on the Consolidated
Financial Statements.
In May 2009, the FASB issued a standard for the disclosure of subsequent events. This standard
does not require significant changes regarding recognition or disclosure of subsequent events, but
does require disclosure of the date through which subsequent events have been evaluated for
purposes of disclosure and accounting recognition. The standard was effective for financial
statements issued after June 15, 2009. The adoption of this standard on April 1, 2009 did not have
a material impact on the Consolidated Financial Statements. Management has performed an evaluation
of subsequent events through November 13, 2009, which is the date the financial statements were
issued.
In June 2009, the FASB issued a standard to amend certain requirements of accounting for
consolidation of variable interest entities, to improve financial reporting by enterprises involved
with variable interest entities and to provide more relevant and reliable information to users of
financial statements. This Statement is effective for fiscal years, and interim periods within
those fiscal years, beginning on the first fiscal year that begins after November 15, 2009, with
early adoption prohibited. The Company is currently reviewing the additional requirements to
determine the impact on the Consolidated Financial Statements and Notes to Consolidated Financial
Statements.
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Table of Contents
Part I Financial Information
Item 2
Managements Discussion and Analysis of Financial Condition and Results of Operations
This Managements 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; federal and state regulations
(including engine emission regulations); general economic conditions in the countries 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; the actions of competitors; failure of Core Molding Technologies suppliers to
perform their contractual obligations; the availability of raw materials; inflationary pressures;
new technologies; regulatory matters; labor relations; the loss or inability of Core Molding
Technologies to attract and retain key personnel; changes to federal, state and local environmental
laws and regulations; 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;
inefficiencies related to the transfer and start up of Core Molding Technologies new Matamoros
production facility; managements decision to pursue new products or businesses which involve
additional costs, risks or capital expenditures; and other risks identified from time-to-time in
Core Molding Technologies other public documents on file with the Securities and Exchange
Commission, including those described in Item 1A of the 2008 Annual Report to Shareholders on Form
10-K.
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, the cyclicality of markets we serve, regulatory
requirements, interest rates and other factors. 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 Navistars 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 open mold processes and resin transfer (RTM) closed mold process. 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. In August 2005, Core Molding
Technologies acquired certain assets of the Cincinnati Fiberglass Division of Diversified Glass,
Inc. a Batavia, Ohio-based, privately held manufacturer and distributor of fiberglass reinforced
plastic components supplied primarily to the heavy-duty truck market. The Batavia, Ohio facility
produces reinforced plastic products by a robotic spray-up open mold process and resin transfer
molding (RTM) utilizing multiple insert tooling (MIT) closed mold process. In June of 2009,
the
Company completed construction and took full occupancy of its new 437,000 square foot production
facility in Matamoros, Mexico that replaced its old leased facility.
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Table of Contents
Core Molding Technologies recorded a net loss for the nine months ended September 30, 2009 of
$700,000 or $0.10 per basic and diluted share, compared with net income of $4,268,000, or $0.63 per
basic and $0.61 per diluted share, for the nine months ended September 30, 2008. During the nine
months ended September 30, 2009, the Company has recorded approximately $2,022,000 of expense for
transfer and start-up costs associated with the construction of the Companys new production
facility in Mexico. The Company has also experienced a 36% decrease in product sales in the first
nine months of 2009 as compared to the same period in 2008. While industry analysts are
forecasting an increase in truck orders for the end of 2009 and into 2010, the Company recognizes
that this expectation should be considered in light of the uncertain economy.
Results of Operations
Three Months Ended September 30, 2009, As Compared To Three Months Ended September 30, 2008
Net sales for the three months ended September 30, 2009, totaled $24,426,000, representing an
approximate 19% decrease from the $30,031,000 reported for the three months ended September 30,
2008. Included in total sales were tooling project sales of $4,624,000 and $533,000 for the three
months ended September 30, 2009 and September 30, 2008, respectively. Tooling project sales result
from billings to customers for molds and assembly equipment built specifically for their products.
These sales are sporadic in nature. Total product sales, excluding tooling project sales, were
approximately 33% lower for the three months ended September 30, 2009, as compared to the same
period a year ago. The primary reason for the decrease in product sales was the continued downturn
in the North American medium and heavy-duty truck market caused by the overall economic conditions.
Sales to Navistar totaled $12,421,000 for the three months ended September 30, 2009, decreasing 29%
from $17,509,000 in sales for the three months ended September 30, 2008. Included in total sales
was $1,985,000 of tooling sales for the three months ended September 30, 2009 compared to $75,000
for the same three months in 2008. Product sales to Navistar decreased by 40% for the three months
ended September 30, 2009 versus the same period of the prior year. The primary reasons for the
decrease in product sales were the continued downturn in the North American medium and heavy-duty
truck market as noted above as well as fewer orders for Navistars military product line.
Sales to PACCAR totaled $6,919,000 for the three months ended September 30, 2009, decreasing 11%
from $7,731,000 in sales for the three months ended September 30, 2008. Included in total sales
was $281,000 of tooling sales for the three months ended September 30, 2009 compared to $381,000
for the same three months in 2008. Product sales to PACCAR decreased by 10% for the three months
ended September 30, 2009 as compared to the same period of the prior year. The decrease in total
product sales was primarily due to market conditions as noted above.
The decrease in product sales was partially offset by a shift in
PACCARs production to truck models for which the Company
provides higher content.
Sales to Daimler totaled $2,847,000 for the three months ended September 30, 2009, increasing 43%
from $1,986,000 in sales for the three months ended September 30, 2008. Included in total sales
was $1,791,000 of tooling sales for the three months ended September 30, 2009 compared to $17,000
for the same three months in 2008. Product sales to Daimler decreased by 46% for the three months
ended September 30, 2009 as compared to the same period of the prior year. The decrease in total
product sales was primarily due to market conditions as noted above.
Sales to other customers for the three months ended September 30, 2009 decreased 20% to $2,238,000
compared to $2,804,000 for the three months ended September 30, 2008. This decrease was primarily
due to a decrease in product sales to a customer in the marine industry of approximately $445,000.
Gross margin was approximately 16% of sales for the three months ended September 30, 2009, compared
with 20% for the three months ended September 30, 2008. The decrease in gross margin was due to
lower overhead cost absorption as result of lower production volumes. Our manufacturing operations
have significant overhead costs such as certain labor, energy, depreciation, lease expense and
certain benefit costs, including post retirement healthcare costs, that do not change
proportionately with production. Partially offsetting the decrease in gross margin was no profit
sharing expense due to lower earnings.
Selling, general and administrative expenses (SG&A) totaled $2,131,000 for the three months ended
September 30, 2009, decreasing from $3,186,000 for the three months ended September 30, 2008. The
primary reasons for the
decrease were no profit sharing expense for the three months ended September 30, 2009, as well as
lower labor costs and professional fees due to cost reduction actions.
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Net interest expense increased to $517,000 for the three months ended September 30, 2009, as
compared to net interest expense of $179,000 for the three months ended September 30, 2008.
Included in net interest expense for the three months ended September 30, 2009 is $118,000 of
interest expense from ineffectiveness related to the Companys interest rate swaps as compared to
$43,000 of interest expense recorded for the same period ended September 30, 2008. The increase in
interest expense was also attributed to additional borrowings used to finance the new manufacturing
facility in Mexico. Interest expense related to these borrowings totaled $266,000 for the three
months ended September 30, 2009. These amounts were partially offset due lower interest expense
related to reductions on other debt due to regularly scheduled principal payments.
Income tax expense for the three months ended September 30, 2009, is estimated to be approximately
38% of total earnings before taxes. In the three months ended September 30, 2008, income taxes were
estimated to be 37% of total earnings before taxes.
Core Molding Technologies recorded net income for the three months ended Sept 30, 2009 of $827,000
or $0.12 per basic and diluted share, compared with net income of $1,688,000, or $0.25 per basic
and $0.24 per diluted share, for the three months ended September 30, 2008.
Nine Months Ended September 30, 2009, As Compared To Nine Months Ended September 30, 2008
Net sales for the nine months ended September 30, 2009, totaled $60,110,000, representing an
approximate 33% decrease from the $89,055,000 reported for the nine months ended September 30,
2008. Included in total sales were tooling project sales of $5,834,000 and $4,179,000 for the nine
months ended September 30, 2009 and September 30, 2008, respectively. Tooling project sales result
from billings to customers for molds and assembly equipment built specifically for their products.
These sales are sporadic in nature. Total product sales, excluding tooling project sales,
decreased by 36% to $54,275,000 for the nine months ended September 30, 2009 as compared to
$84,876,000 for the nine months ended September 30, 2008. The primary reason for the decrease in
product sales was the continued downturn in the North American medium and heavy-duty truck market
caused by the overall economic conditions that have existed over the past year.
Sales to Navistar totaled $31,933,000 for the nine months ended September 30, 2009, as compared to
$50,402,000 for the nine months ended September 30, 2008. Included in total sales was $2,460,000 of
tooling sales for the nine months ended September 30, 2009 compared to $2,868,000 for the nine
months ended September 30, 2008. Total product sales to Navistar decreased by 38% for the nine
months ended September 30, 2009 as compared to the nine months ended September 30, 2008. The
primary reasons for the decrease in product sales were the continued downturn in the North American
medium and heavy-duty truck market and the overall economic conditions as noted above as well as
fewer orders for Navistars military product line.
Sales to PACCAR totaled $16,801,000 for the nine months ended September 30, 2009, as compared to
$23,266,000 reported for the nine months ended September 30, 2008. Included in total sales was
$488,000 of tooling sales for the nine months ended September 30, 2009 compared to $841,000 for the
nine months ended September 30, 2008. Total product sales to PACCAR decreased by 27% for the nine
months ended September 30, 2009 as compared to the nine months ended September 30, 2008. The
decrease in total product sales was also due to the above noted market conditions.
Sales to Daimler totaled $4,599,000 for the nine months ended September 30, 2009, as compared to
$6,165,000 reported for the nine months ended September 30, 2008. Included in total sales was
$1,791,000 of tooling sales for the nine months ended September 30, 2009 compared to $102,000 for
the nine months ended September 30, 2008. Total product sales to Daimler decreased by 54% for the
nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. The
decrease in total product sales was due to the above noted market conditions.
Sales to other customers for the nine months ended September 30, 2009, decreased approximately 27%
to $6,777,000 from $9,222,000 for the nine months ended September 30, 2008. This decrease is
primarily due to decreases in product sales for a customer in the marine industry of approximately
$1,372,000 and decreases in demand for products manufactured for other North American medium and
heavy-duty truck manufacturers of $1,344,000.
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Gross margin was approximately 11% of sales for the nine months ended September 30, 2009, compared
with 18% for the nine months ended September 30, 2008. The decrease in gross margin was due to
lower overhead cost absorption which was due to lower production volumes. Our manufacturing
operations have significant overhead costs such as certain labor, energy, depreciation, lease
expense and certain benefit costs, including post retirement healthcare costs, that do not change
proportionately with sales. Also impacting gross margin was approximately $1,804,000 of transition
and start up costs incurred during the nine months ended September 30, 2009 associated with the
Companys new production facility in Matamoros Mexico. Partially offsetting the decrease in gross
margin was no profit sharing expense due to lower earnings.
Selling, general and administrative expenses (SG&A) totaled $6,887,000 for the nine months ended
September 30, 2009, decreasing from $8,994,000 for the nine months ended September 30, 2008. The
primary reasons for the decrease were no profit sharing expense, for the nine months ended
September 30, 2009, along with lower labor and benefit costs and lower professional fees as a
result of the Companys ongoing cost reduction actions. Partially offsetting these reductions was
approximately $218,000 of transition and start-up costs incurred in 2009 associated with the
Companys new production facility in Mexico.
Net interest expense totaled $657,000 for the nine months ended September 30, 2009, as compared to
net interest expense of $541,000 for the nine months ended September 30, 2008. Included in net
interest expense for the nine months ended September 30, 2009 is income of $134,000 from
ineffectiveness related to the Companys interest rate swaps as compared to $55,000 of interest
expense recorded for the same period ending September 30, 2008. Net interest expense was also impacted by
additional borrowings related to the Companys new facility in Mexico. The Company
capitalized interest of approximately $167,000 in 2009 related to this facility in
Mexico which was placed into service in June 2009.
Income tax benefit for the nine months ended September 30, 2009, is estimated to be approximately
30% of total earnings before taxes. In the nine months ended September 30, 2008 income taxes were
estimated to be 34% of total earnings before taxes. The change in the effective tax rate is
primarily due to certain expenses being non-deductible in the
Companys Mexican subsidiary.
The Company recorded a net loss for the nine months ended September 30, 2009 of $700,000 or $0.10
per basic and diluted share, compared with net income of $4,268,000, or $0.63 per basic and $0.61
per diluted share, for the nine months ended September 30, 2008.
Liquidity and Capital Resources
The Companys primary sources of funds have been cash generated from operating activities and
borrowings from third parties. Primary cash requirements are for operating expenses and capital
expenditures.
As widely reported, financial markets in the United States, Europe and Asia continue to experience
disruption including, among other things, extreme volatility in security prices, severely
diminished liquidity and credit availability, rating downgrades of certain investments and
declining valuations of others. Governments have taken unprecedented actions intended to address
extreme market conditions that include severely restricted credit and declines in real estate
values. While currently these conditions have not precluded the Companys ability to access credit
markets and finance operations, there can be no assurance that there will not be a further
deterioration in financial markets and confidence in major economies, which may impact the
Companys ability to borrow in the future.
Cash provided by operating activities for the nine months ended September 30, 2009 totaled
$3,735,000. Net operating losses of $700,000 negatively impacted operating cash flows. Non-cash
deductions of depreciation and amortization contributed $2,858,000 to operating cash flow. In
addition, the increase in the postretirement healthcare benefits liability of $744,000 is not a
current cash obligation, and this item will not be a cash obligation until additional employees
retire and begin to utilize these benefits. Changes in working capital increased cash provided by
operating activities by $738,000. Changes in working capital primarily relate to a decrease in
inventory levels as well as lower accounts receivable due to decreased product sales and better
collection efforts for the nine months ended September 30, 2009. These were offset by lower
accounts payable and accrued balances as of September 30, 2009 as compared to December 31, 2008
which was also due to lower volumes.
Cash used in investing activities for the nine months ended September 30, 2009 was $9,759,000,
primarily representing purchases related to the construction of the Companys new production
facility in Mexico. The Company currently plans an additional $400,000 of capital expenditures for
the remainder of the 2009. These capital additions will be funded by cash from operations and
borrowings from the Companys available line of
credit. The Company may also undertake other capital improvement projects in the future as deemed
necessary and appropriate.
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Financing activities contributed cash of $6,865,000. This increase is related to borrowings on the
Companys construction loans of $10,279,000. This amount is partially offset by net repayments on
the line of credit of $1,194,000, and other loan payments of $1,996,000.
At September 30, 2009, the Company had cash on hand of $841,000 and an available line of credit of
$8,000,000, with a scheduled maturity of April 30, 2011. At September 30, 2009, Core Molding
Technologies had no outstanding borrowings on this line of credit.
The Company is required to meet certain financial covenants included in the Credit Agreement with
respect to leverage ratios, fixed charge ratios, capital expenditures as well as other customary
affirmative and negative covenants. As of September 30, 2009, the Company was in compliance with
its financial debt covenants associated with the loans made under the Credit Agreement as described
above, as well as financial covenants contained in certain equipment leases.
On March 31, 2009, the Company entered into the First Amendment to the Credit Agreement with
KeyBank. Pursuant to the terms of the First Amendment, the lender agreed to modify certain terms of
the Credit Agreement. These modifications included (1) modification of the definition of EBITDA to
add back transition costs up to $3,200,000 associated with the transition and startup of the new
production facility in Matamoros and add back certain non-cash compensation expense (2)
modification of the fixed charge definition to exclude from consolidated interest expense any
measure of ineffectiveness from interest rate swaps and amortization of loan origination and
issuance costs (3) modification of the leverage ratio from 3.0x to 3.2x at June 30, 2009, 3.4x at
September 30, 2009, and 3.2x at December 31, 2009 (4) increase the applicable margin for interest
rates applicable to LIBOR loans effective March 31, 2009 to 400 basis points for both construction
loans and the revolving line of credit; all rates decrease 25 basis points upon reaching a leverage
ratio of less than 2.25 to 1.00 (5) increase the letter of credit fee on the Industrial Revenue
Bond to 300 basis points (6) increase the 100 basis point LIBOR floor on the $8,000,000
construction loan and revolving line of credit to 150 basis points and (7) implement a 150 basis
point LIBOR floor on the $12,000,000 construction loan.
On June 30, 2009, the Company entered into the Second Amendment to the Credit Agreement, dated as
of December 9, 2008, with KeyBank. Pursuant to the terms of the Second Amendment, the parties
agreed to modify certain terms of the Credit Agreement. These modifications included (1) an
increase in the applicable margin for interest rates applicable to LIBOR loans to 450 basis points,
effective June 30, 2009, for both construction loans and the revolving line of credit; with all
rates other than rates applicable to the term loan decreasing by 25 basis points upon reaching a
leverage ratio of less than 2.25 to 1.00, (2) a decrease in the applicable margin for the interest
rate applicable to the term loan to 200 basis points in excess of the LIBOR or the Base Rate, (3) a
change in the definition of consolidated EBITDA to add back non-cash post-retirement expenses minus
retirement benefits paid in cash, (4) the deletion of the 150 basis point interest rate floor from
the LIBOR rates applicable to the $8,000,000 and $12,000,000 construction loans and the revolving
line of credit, and (5) the extension of the commitment for the revolving line of credit to April
30, 2011.
Based on the Companys forecasts, which are primarily based on industry analysts estimates of 2009
and 2010 heavy and medium-duty truck production volumes as well as other assumptions management
believes to be reasonable, management believes that the Company will be able to maintain compliance
with the covenants as amended under the First Amendment and the Second Amendment to the Credit
Agreement for the next 12 months. Management believes that cash flows from operating activities
together with available borrowings under the Credit Agreement will be sufficient to meet Core
Molding Technologies liquidity needs. However, if a material adverse change in the financial
position of Core Molding Technologies should occur, or if actual sales or expenses are
substantially different than what has been forecasted, Core Molding Technologies liquidity and
ability to obtain further financing to fund future operating and capital requirements could be
negatively impacted.
Recent Accounting Pronouncements
In June 2009, FASB issued a standard regarding the FASB Accounting Standards CodificationTM
(the Codification), and the hierarchy of generally accepted accounting principles, which
replaces the standard previously issued by the FASB regarding the hierarchy of generally accepted
accounting principles (GAAP) in the United States. This standard identifies the source of
accounting principles and the framework for selecting the principles used in the preparation of
financial statements of non-governmental entities that are presented in conformity with GAAP (the
GAAP hierarchy). In addition, this standard establishes the Codification as the
single source of authoritative GAAP recognized by the FASB to be applied by non-governmental
entities in the preparation of financial statements in conformity with GAAP. All guidance
contained in the Codification carries an equal level of authority. This standard was effective for
financial statements issued for interim and annual periods ending after September 15, 2009. The
Company adopted this standard during the third quarter of 2009 and its adoption did not have a
significant impact on its financial statements.
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In December 2008, the FASB issued a standard to amend guidance on an employers disclosures about
plan assets of a defined benefit pension or other postretirement plan. This standard is effective
for fiscal years ending after December 15, 2009 with earlier adoption permitted. The Company is
currently reviewing the additional disclosure requirements to determine the impact on the
Consolidated Financial Statements and Notes to Consolidated Financial Statements.
In February 2008, the FASB issued a standard, which delayed the effective date of accounting for
all nonrecurring fair value measurements of non-financial assets and liabilities until fiscal years
beginning after November 15, 2008. The Company has not recorded any nonrecurring fair value
measurements of non-financial assets and liabilities since adopting this standard on January 1,
2009.
In April 2009, the FASB issued a standard to provide additional guidance for estimating fair value
when the volume and level of activity for the asset or liability have significantly decreased. This
standard is effective for interim reporting periods ending after June 15, 2009, with early adoption
permitted. The adoption of this standard did not have a material impact on the Consolidated
Financial Statements.
In May 2009, the FASB issued a standard for the disclosure of subsequent events. This standard
does not require significant changes regarding recognition or disclosure of subsequent events, but
does require disclosure of the date through which subsequent events have been evaluated for
purposes of disclosure and accounting recognition. The standard was effective for financial
statements issued after June 15, 2009. The adoption of this standard on April 1, 2009 did not have
a material impact on the Consolidated Financial Statements. Management has performed an evaluation
of subsequent events through November 13, 2009, which is the date the financial statements were
issued.
In June 2009, the FASB issued a standard to amend certain requirements of accounting for
consolidation of variable interest entities, to improve financial reporting by enterprises involved
with variable interest entities and to provide more relevant and reliable information to users of
financial statements. This Statement is effective for fiscal years, and interim periods within
those fiscal years, beginning on the first fiscal year that begins after November 15, 2009 with
early adoption prohibited. The Company is currently reviewing the additional requirements to
determine the impact on the Consolidated Financial Statements and Notes to Consolidated Financial
Statements.
Critical Accounting Policies and Estimates
Managements Discussion and Analysis of Financial Condition and Results of Operations discuss the
Companys consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these 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.
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 the Companys customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required. The Company recorded an
allowance for doubtful accounts of $109,000 at September 30, 2009 and at December 31, 2008.
Management also records estimates for customer returns and deductions, discounts offered to
customers, and for price adjustments. Should customer returns and deductions, discounts, and price
adjustments fluctuate from the estimated amounts, additional allowances may be required. The
Company has
reduced accounts receivable for customer returns and deductions, discounts offered to customers and
for price adjustments by $820,000 at September 30, 2009 and $740,000 at December 31, 2008.
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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
and anticipated usage.
Goodwill and Long-Lived Assets: Management evaluates whether impairment exists for goodwill and
long-lived assets annually on December 31 or at interim periods if an indicator of impairment
exists. Should actual results differ from the assumptions used to determine impairment, additional
provisions may be required. If there is a sustained downturn in the economy or the disruption of
the financial and credit markets continues, demand for our products could fall below our current
expectations and our forecasts of revenues and operating results could decline. Impairment charges
of our goodwill or long-lived assets may be required in the future if our expected future cash
flows decline. The Company has not recorded any impairment to goodwill or long-lived assets for
the nine months ended September 30, 2009 or the year ended December 31, 2008.
Self-Insurance: The Company is self-insured with respect to most of its Columbus and Batavia, Ohio
and Gaffney, South Carolina medical and dental claims and its Columbus and Batavia, Ohio workers
compensation claims. The Company has recorded an estimated liability for self-insured medical and
dental claims incurred but not reported and workers compensation claims incurred but not reported
at September 30, 2009 and December 31, 2008 of $995,000 and $1,109,000, respectively.
Postretirement benefits: Management records an accrual for postretirement health care costs for
benefits provided for certain employees under a plan sponsored by the Company. 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 the Companys operations. The effect of a change in healthcare costs is
described in Note 10 of the Consolidated Notes to Financial Statements, which are contained in the
2008 Annual Report to Shareholders. The Company recorded a liability for postretirement healthcare
benefits based on actuarially computed estimates of $16,622,000 at September 30, 2009 and
$15,878,000 at December 31, 2008.
Revenue Recognition: Revenue from product sales is recognized at the time products are shipped
and title transfers. Allowances for returned products and other credits are estimated and recorded
as revenue is recognized. Tooling revenue is recognized when the customer approves the tool and
accepts ownership. Progress billings and expenses are shown net as an asset or liability on the
Companys balance sheet. Tooling in progress can fluctuate significantly from period to period and
is dependent upon the stage of tooling projects and the related billing and expense payment
timetable for individual projects and therefore does not necessarily reflect projected income or
loss from tooling projects. At September 30, 2009 the Company has recorded a net liability related
to tooling in progress of $978,000, which represents approximately $3,019,000 of progress tooling
billings and $2,041,000 of progress tooling expenses. At December 31, 2008 the Company had
recorded a net liability related to tooling in progress of $212,000, which represents approximately
$3,555,000 of progress tooling billings and $3,343,000 of progress tooling expenses.
Income taxes: The Consolidated Balance Sheet at September 30, 2009 and December 31, 2008, includes
a deferred tax asset of $7,167,000 and $7,188,000, respectively. The Company performs analyses to
evaluate the balance of deferred tax assets that will be realized. Such analyses are based on the
premise that the Company is, and will continue to be, a going concern and that it is more likely
than not that deferred tax benefits will be realized through the generation of future taxable
income. For more information, refer to Note 9 in Core Molding Technologies 2008 Annual Report to
Shareholders.
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Part I Financial Information
Item 4T
Controls and Procedures
As of the end of the period covered by this report, the Company has carried out an evaluation,
under the supervision and with the participation of its management, including its Chief Executive
Officer and its Chief Financial Officer, of the effectiveness of the design and operation of its
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon
this evaluation, the Companys management, including its Chief Executive Officer and its Chief
Financial Officer, concluded that the Companys disclosure controls and procedures were (i)
effective to ensure that information required to be disclosed in the Companys reports filed or
submitted under the Exchange Act was accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure, and (ii) effective to ensure that information required to
be disclosed in the Companys reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms.
There were no changes in internal control over financial reporting (as such term is defined in
Exchange Act Rule 13a-15(f)) that occurred in the last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
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Table of Contents
Part II Other Information
Item 1. | Legal Proceedings |
None
Item 1A. | Risk Factors |
There have been no material changes in Core Molding Technologies risk factors from
those previously disclosed in Core Molding Technologies 2008 Annual Report on Form
10-K.
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 |
None
Item 5. | Other Information |
None
Item 6. | Exhibits |
See Index to Exhibits
24
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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 13, 2009 | By: | /s/ Kevin L. Barnett | ||
Kevin L. Barnett | ||||
President, Chief Executive Officer, and Director |
||||
Date: November 13, 2009 | By: | /s/ Herman F. Dick, Jr. | ||
Herman F. Dick, Jr. | ||||
Vice President, Secretary, Treasurer and Chief Financial Officer |
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Table of Contents
INDEX TO EXHIBITS
Exhibit No. | Description | Location | ||||
2(a | )(1) | Asset Purchase Agreement
Dated as of September 12, 1996,
As amended October 31, 1996,
between Navistar and RYMAC Mortgage
Investment Corporation1
|
Incorporated by reference to Exhibit 2-A to Registration Statement on Form S-4 (Registration No. 333-15809) | |||
2(a | )(2) | Second Amendment to Asset Purchase
Agreement dated December 16, 19961
|
Incorporated by reference to 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, between Core Molding
Technologies, Inc. and RYMAC Mortgage
Investment Corporation
|
Incorporated by reference to Exhibit 2-B to Registration Statement on Form S-4 (Registration No. 333-15809) | |||
2(b | )(2) | First Amendment to Agreement and Plan
of Merger dated as of December 27, 1996
Between Core Molding Technologies, Inc. and
RYMAC Mortgage Investment Corporation
|
Incorporated by reference to Exhibit 2(b)(2) to Annual Report on Form 10-K for the year ended December 31, 2002 | |||
2 | (c) | Asset Purchase Agreement dated as of October
10, 2001, between Core Molding Technologies,
Inc. and Airshield Corporation
|
Incorporated by reference to Exhibit 1 to Form 8-K filed October 31, 2001 | |||
3(a | )(1) | Certificate of Incorporation of
Core Molding Technologies, Inc.
as filed with the Secretary of State
of Delaware on October 8, 1996
|
Incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-8 (Registration No. 333-29203) | |||
3(a | )(2) | Certificate of Amendment of
Certificate of Incorporation
of Core Molding Technologies, Inc.
as filed with the Secretary of State
of Delaware on November 6, 1996
|
Incorporated by reference to Exhibit 4(b) to Registration Statement on Form S-8 (Registration No. 333-29203) | |||
3(a | )(3) | Certificate of Amendment of Certificate of
Incorporation as filed with the Secretary of
State of Delaware on August 28, 2002
|
Incorporated by reference to Exhibit 3(a)(4) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 | |||
3(a | )(4) | Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock as filed with the Secretary
of State of Delaware on July 18, 2007
|
Incorporated by reference to Exhibit 3.1 to Form 8-k filed July 19, 2007 | |||
3 | (b) | Amended and Restated By-Laws of Core Molding
Technologies, Inc.
|
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed January 4, 2008 |
26
Table of Contents
Exhibit No. | Description | Location | ||||
4(a | )(1) | Certificate of Incorporation of Core
Molding Technologies, Inc. as filed with
the Secretary of State of Delaware on
October 8, 1996
|
Incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-8 (Registration No. 333-29203) | |||
4(a | )(2) | Certificate of Amendment of Certificate
of Incorporation of Core Materials
Corporation as filed with the Secretary of
State of Delaware on November 6, 1996
|
Incorporated by reference to Exhibit 4(b) to Registration Statement on Form S-8 (Registration No. 333-29203) | |||
4(a | )(3) | Certificate of Amendment of Certificate
of Incorporation as filed with the
Secretary of State of Delaware on August
28, 2002
|
Incorporated by reference to Exhibit 3(a)(4) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 | |||
4(a | )(4) | Certificate of Designation, Preferences
and Rights of Series A Junior
Participating Preferred Stock as filed
with the Secretary of State of Delaware
on July 18, 2007
|
Incorporated by reference to Exhibit 3.1 to Form 8-K filed July 19, 2007 | |||
4 | (b) | Stockholder Rights Agreement dated as of
July 18, 2007, between Core Molding
Technologies, Inc. and American Stock
Transfer & Trust Company
|
Incorporated by reference to Exhibit 4.1 to Current Report From 8-k filed July 19, 2007 | |||
10 | (a) | First Amendment Agreement, dated March
31, 2009, to the Credit Agreement dated
December 9, 2008, among Core Molding
Technologies, Inc., Core Composites de
Mexico, S. De R.L. de C.V. and Keybank
National Association.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed April 2, 2009 | |||
10 | (b) | Second Amendment Agreement, dated June
30, 2009, to the Credit Agreement dated
December 9, 2008, among Core Molding
Technologies, Inc., Core Composites de
Mexico, S. De R.L. de C.V. and Keybank
National Association.
|
Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed July 2, 2009 | |||
11 | Computation of Net Income per Share
|
Exhibit 11 omitted because the required information is Included in Notes to Financial Statements | ||||
31 | (a) | Section 302 Certification by Kevin L.
Barnett, President, Chief Executive
Officer, and Director
|
Filed Herein | |||
31 | (b) | Section 302 Certification by Herman F.
Dick, Jr., Vice President, Secretary,
Treasurer, and Chief Financial Officer
|
Filed Herein | |||
32 | (a) | Certification of Kevin L. Barnett, Chief
Executive Officer of Core Molding
Technologies, Inc., dated November 13,
2009, pursuant to 18 U.S.C. Section 1350
|
Filed Herein | |||
32 | (b) | Certification of Herman F. Dick, Jr.,
Chief Financial Officer of Core Molding
Technologies, Inc., dated November 13,
2009, pursuant to 18 U.S.C. Section 1350
|
Filed Herein |
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. |
27