Attached files
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EX-32.2 - EXHIBIT 32.2 - CORE MOLDING TECHNOLOGIES INC | c19073exv32w2.htm |
EX-31.1 - EXHIBIT 31.1 - CORE MOLDING TECHNOLOGIES INC | c19073exv31w1.htm |
EX-32.1 - EXHIBIT 32.1 - CORE MOLDING TECHNOLOGIES INC | c19073exv32w1.htm |
EXCEL - IDEA: XBRL DOCUMENT - CORE MOLDING TECHNOLOGIES INC | Financial_Report.xls |
EX-31.2 - EXHIBIT 31.2 - CORE MOLDING TECHNOLOGIES INC | c19073exv31w2.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2011
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 | 31-91481870 | |
(State or other jurisdiction incorporation or organization) |
(I.R.S. Employer Identification No.) |
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 þ 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 | Smaller reporting company þ | |||
(Do not check if a smaller reporting company) |
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 August 11, 2011, the latest practicable date, 7,136,807 shares of the registrants common stock
were issued and outstanding.
Table of Contents
2
Table of Contents
Part 1 Financial Information
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, | ||||||||
2011 | December 31, | |||||||
(Unaudited) | 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | | $ | 5,656,865 | ||||
Accounts receivable (less allowance for doubtful accounts:
June 30, 2011 $113,000; December 31, 2010 $118,000) |
20,382,412 | 14,746,138 | ||||||
Inventories: |
||||||||
Finished goods |
2,005,651 | 1,491,886 | ||||||
Work in process |
1,245,175 | 1,125,153 | ||||||
Stores |
7,396,888 | 5,791,491 | ||||||
Total inventories, net |
10,647,714 | 8,408,530 | ||||||
Deferred tax asset-current portion |
1,390,928 | 1,390,928 | ||||||
Foreign sales tax receivable |
1,264,875 | 1,001,039 | ||||||
Prepaid expenses and other current assets |
1,091,653 | 874,041 | ||||||
Total current assets |
34,777,582 | 32,077,541 | ||||||
Property, plant and equipment |
87,140,768 | 83,657,334 | ||||||
Accumulated depreciation |
(42,230,734 | ) | (40,314,403 | ) | ||||
Property, plant and equipment net |
44,910,034 | 43,342,931 | ||||||
Deferred tax asset |
2,540,112 | 2,519,567 | ||||||
Goodwill |
1,097,433 | 1,097,433 | ||||||
Other assets |
19,481 | 24,793 | ||||||
Total Assets |
$ | 83,344,642 | $ | 79,062,265 | ||||
Liabilities and Stockholders Equity |
||||||||
Liabilities: |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 4,074,289 | $ | 4,151,420 | ||||
Accounts payable |
7,476,896 | 6,487,983 | ||||||
Tooling in progress |
380,884 | 320,041 | ||||||
Current portion of post retirement benefits liability |
933,000 | 933,000 | ||||||
Accrued liabilities: |
||||||||
Compensation and related benefits |
4,566,055 | 3,678,692 | ||||||
Interest payable |
53,767 | 67,971 | ||||||
Taxes |
668,063 | 456,351 | ||||||
Other |
925,466 | 1,065,727 | ||||||
Total current liabilities |
19,078,420 | 17,161,185 | ||||||
Long-term debt |
10,739,282 | 13,581,425 | ||||||
Interest rate swaps |
324,305 | 350,916 | ||||||
Post retirement benefits liability |
9,901,564 | 9,904,000 | ||||||
Total Liabilities |
40,043,571 | 40,997,526 | ||||||
Commitments and Contingencies |
| | ||||||
Stockholders Equity: |
||||||||
Preferred stock $0.01 par value, authorized shares
10,000,000; Outstanding shares: 0 at June 30, 2011 and
December 31, 2010 |
| | ||||||
Common stock $0.01 par value, authorized shares 20,000,000;
Outstanding shares: 6,917,635 at June 30, 2011 and
6,880,295 at December 31, 2010 |
69,176 | 68,803 | ||||||
Paid-in capital |
24,045,491 | 23,790,263 | ||||||
Accumulated other comprehensive income, net of income taxes |
3,143,394 | 3,213,197 | ||||||
Treasury stock |
(26,314,186 | ) | (26,253,478 | ) | ||||
Retained earnings |
42,357,196 | 37,245,954 | ||||||
Total Stockholders Equity |
43,301,071 | 38,064,739 | ||||||
Total Liabilities and Stockholders Equity |
$ | 83,344,642 | $ | 79,062,265 | ||||
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales: |
||||||||||||||||
Products |
$ | 33,546,727 | $ | 21,473,293 | $ | 62,521,147 | $ | 41,169,225 | ||||||||
Tooling |
1,747,018 | 2,002,499 | 1,761,899 | 2,748,607 | ||||||||||||
Total sales |
35,293,745 | 23,475,792 | 64,283,046 | 43,917,832 | ||||||||||||
Total cost of sales |
27,564,114 | 20,056,987 | 49,961,168 | 36,415,103 | ||||||||||||
Gross margin |
7,729,631 | 3,418,805 | 14,321,878 | 7,502,729 | ||||||||||||
Total selling, general and administrative expense |
3,176,768 | 2,293,334 | 6,100,020 | 4,619,270 | ||||||||||||
Income before interest and taxes |
4,552,863 | 1,125,471 | 8,221,858 | 2,883,459 | ||||||||||||
Interest expense |
267,262 | 457,290 | 448,650 | 877,473 | ||||||||||||
Income before income taxes |
4,285,601 | 668,181 | 7,773,208 | 2,005,986 | ||||||||||||
Income tax expense |
1,443,710 | 226,878 | 2,661,966 | 1,701,625 | ||||||||||||
Net income |
$ | 2,841,891 | $ | 441,303 | $ | 5,111,242 | $ | 304,361 | ||||||||
Net income per common share: |
||||||||||||||||
Basic |
$ | 0.41 | $ | 0.06 | $ | 0.74 | $ | 0.04 | ||||||||
Diluted |
$ | 0.39 | $ | 0.06 | $ | 0.70 | $ | 0.04 | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
6,906,714 | 6,817,365 | 6,899,496 | 6,808,542 | ||||||||||||
Diluted |
7,333,147 | 7,078,959 | 7,286,971 | 7,132,176 | ||||||||||||
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 | Stock | Equity | ||||||||||||||||||||||
Balance at December 31, 2010 |
6,880,295 | $ | 68,803 | $ | 23,790,263 | $ | 37,245,954 | $ | 3,213,197 | $ | (26,253,478 | ) | $ | 38,064,739 | ||||||||||||||
Net Income |
5,111,242 | 5,111,242 | ||||||||||||||||||||||||||
Change in post retirement benefits, net of tax of $41,309 |
(97,190 | ) | (97,190 | ) | ||||||||||||||||||||||||
Change in interest rate swaps, net of tax of $13,999 |
27,387 | 27,387 | ||||||||||||||||||||||||||
Comprehensive Income |
5,041,439 | |||||||||||||||||||||||||||
Common stock issued |
19,965 | 199 | 62,738 | 62,937 | ||||||||||||||||||||||||
Purchase of treasury stock |
(6,404 | ) | (64 | ) | (60,708 | ) | (60,772 | ) | ||||||||||||||||||||
Restricted stock issued |
23,779 | 238 | 238 | |||||||||||||||||||||||||
Share-based compensation |
192,490 | 192,490 | ||||||||||||||||||||||||||
Balance at June 30, 2011 |
6,917,635 | $ | 69,176 | $ | 24,045,491 | $ | 42,357,196 | $ | 3,143,394 | $ | (26,314,186 | ) | $ | 43,301,071 | ||||||||||||||
See notes to unaudited consolidated financial statements.
5
Table of Contents
Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended | ||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 5,111,242 | $ | 304,361 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
1,967,173 | 1,966,716 | ||||||
Deferred income taxes |
(20,654 | ) | 1,021,501 | |||||
Mark-to-market of interest rate swaps |
886 | 267,485 | ||||||
Share-based compensation |
192,728 | 188,762 | ||||||
Loss on disposal of assets |
| 14,277 | ||||||
Gain on translation of foreign currency financial statements |
(197,000 | ) | (50,334 | ) | ||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable |
(5,636,274 | ) | (2,206,827 | ) | ||||
Inventories |
(2,239,185 | ) | (1,102,922 | ) | ||||
Prepaid and other assets |
(526,977 | ) | (422,744 | ) | ||||
Accounts payable |
1,089,460 | 867,609 | ||||||
Accrued and other liabilities |
1,005,454 | 1,021,037 | ||||||
Post retirement benefits liability |
(99,627 | ) | 604,021 | |||||
Net cash provided by operating activities |
647,226 | 2,472,942 | ||||||
Cash flows from investing activities: |
||||||||
Purchase of property, plant and equipment |
(3,386,982 | ) | (1,741,488 | ) | ||||
Net cash used in investing activities |
(3,386,982 | ) | (1,741,488 | ) | ||||
Cash flows from financing activities: |
||||||||
Payment of principal on Mexican loan |
(1,600,000 | ) | | |||||
Payment of principal on capex loan |
(857,143 | ) | (857,143 | ) | ||||
Payment of principal on term loan |
(107,131 | ) | (642,858 | ) | ||||
Payment of principal on industrial development revenue bond |
(355,000 | ) | (330,000 | ) | ||||
Payments related to the purchase of treasury stock |
(60,772 | ) | | |||||
Proceeds from issuance of common stock |
62,937 | 33,920 | ||||||
Net cash used in financing activities |
(2,917,109 | ) | (1,796,081 | ) | ||||
Net change in cash and cash equivalents |
(5,656,865 | ) | (1,064,627 | ) | ||||
Cash and cash equivalents at beginning of period |
5,656,865 | 4,141,838 | ||||||
Cash and cash equivalents at end of period |
$ | | $ | 3,077,211 | ||||
Cash paid for: |
||||||||
Interest |
$ | 364,544 | $ | 542,510 | ||||
Income taxes |
$ | 2,240,000 | $ | 167,812 | ||||
Non Cash: |
||||||||
Fixed asset purchases in accounts payable |
$ | 147,700 | $ | 65,545 | ||||
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 June 30,
2011, the results of operations for the three and six months ended June 30, 2011 and cash flows for
the six months ended June 30, 2011. The Notes to Consolidated Financial Statements, which are
contained in the 2010 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, Matamoros 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 also utilizes spray-up and hand lay-up open mold processes, and RTM closed mold process to
produce reinforced plastic products.
2. Net Income per Common Share
Net income per common share is computed based on the weighted average number of common shares
outstanding during the period. Diluted net income 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 per common share is as follows:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income |
$ | 2,841,891 | $ | 441,303 | $ | 5,111,242 | $ | 304,361 | ||||||||
Weighted average common shares outstanding |
6,906,714 | 6,817,365 | 6,899,496 | 6,808,542 | ||||||||||||
Effect of dilutive securities: |
||||||||||||||||
Stock options |
292,592 | 121,010 | 265,492 | 196,345 | ||||||||||||
Restricted stock |
133,841 | 140,584 | 121,983 | 127,289 | ||||||||||||
Weighted average common and potentially issuable common shares outstanding diluted |
7,333,147 | 7,078,959 | 7,286,971 | 7,132,176 | ||||||||||||
Basic net income per common share |
$ | 0.41 | $ | 0.06 | $ | 0.74 | $ | 0.04 | ||||||||
Diluted net income per common share |
$ | 0.39 | $ | 0.06 | $ | 0.70 | $ | 0.04 |
At June 30, 2011 there were no unexercised stock options for inclusion in diluted earnings per
share. At June 30, 2010 there were 25,000 unexercised stock options that were not included in
diluted earnings per share, as they were anti-dilutive.
7
Table of Contents
3. Sales
Core Molding Technologies currently has two major customers, Navistar, Inc. (Navistar) and
PACCAR, Inc. (PACCAR). Major customers are defined as customers whose sales individually consist
of more than ten percent of total sales during any reporting period. The following table presents
sales revenue for the above-mentioned customers for the three and six months ended June 30, 2011
and 2010:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Navistar product sales |
$ | 14,738,535 | $ | 12,888,372 | $ | 28,511,425 | $ | 23,785,041 | ||||||||
Navistar tooling sales |
827,946 | 1,342,434 | 827,946 | 1,771,359 | ||||||||||||
Total Navistar sales |
15,566,481 | 14,230,806 | 29,339,371 | 25,556,400 | ||||||||||||
PACCAR product sales |
12,445,556 | 5,347,502 | 21,473,418 | 11,134,611 | ||||||||||||
PACCAR tooling sales |
223,328 | 643,965 | 223,328 | 889,460 | ||||||||||||
Total PACCAR sales |
12,668,884 | 5,991,467 | 21,696,746 | 12,024,071 | ||||||||||||
Other product sales |
6,362,636 | 3,237,419 | 12,536,304 | 6,249,573 | ||||||||||||
Other tooling sales |
695,744 | 16,100 | 710,625 | 87,788 | ||||||||||||
Total other sales |
7,058,380 | 3,253,519 | 13,246,929 | 6,337,361 | ||||||||||||
Total product sales |
33,546,727 | 21,473,293 | 62,521,147 | 41,169,225 | ||||||||||||
Total tooling sales |
1,747,018 | 2,002,499 | 1,761,899 | 2,748,607 | ||||||||||||
Total sales |
$ | 35,293,745 | $ | 23,475,792 | $ | 64,283,046 | $ | 43,917,832 | ||||||||
4. Comprehensive Income
Comprehensive income represents net income plus the results of certain equity changes not reflected
in the Consolidated Statements of Operations. The components of comprehensive income, net of tax,
are as follows:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income |
$ | 2,841,891 | $ | 441,303 | $ | 5,111,242 | $ | 304,361 | ||||||||
Curtailment of post retirement benefit |
| 298,000 | | 298,000 | ||||||||||||
Change in post retirement benefits, net of tax
benefit of $20,655 and $41,309 for the three
and six months ended June 30, 2011 and tax
expense of $9,917 and $19,607 for the three
and six months ended June 30, 2010,
respectively |
(48,595 | ) | 19,250 | (97,190 | ) | 38,059 | ||||||||||
Change in interest rate swaps, net of tax of
$6,890 and $13,999 for the three and six
months ended June 30, 2011 and tax of $9,945
and $20,448 for the three and six months
ended June 30, 2010, respectively |
13,587 | 19,304 | 27,387 | 39,693 | ||||||||||||
Comprehensive income |
$ | 2,806,883 | $ | 777,857 | $ | 5,041,439 | $ | 680,113 | ||||||||
8
Table of Contents
5. Post retirement Benefits
The components of expense for Core Molding Technologies post retirement benefits plans for the
three and six months ended June 30, 2011 and 2010 are as follows:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Pension expense: |
||||||||||||||||
Defined contribution plan
contributions |
$ | 124,675 | $ | 111,021 | $ | 290,498 | $ | 221,737 | ||||||||
Multi-employer plan
contributions |
110,216 | 86,496 | 203,729 | 209,057 | ||||||||||||
Total pension expense |
234,891 | 197,517 | 494,227 | 430,794 | ||||||||||||
Health and life insurance: |
||||||||||||||||
Service cost |
| 87,000 | | 180,000 | ||||||||||||
Interest cost |
132,750 | 269,000 | 265,500 | 538,000 | ||||||||||||
Amortization of prior service costs |
(124,000 | ) | | (248,000 | ) | | ||||||||||
Amortization of net loss |
54,750 | 29,000 | 109,500 | 58,000 | ||||||||||||
Net periodic benefit cost |
63,500 | 385,000 | 127,000 | 776,000 | ||||||||||||
Total post retirement benefits expense |
$ | 298,391 | $ | 582,517 | $ | 621,227 | $ | 1,206,794 | ||||||||
The Company made payments of $617,883 to pension plans and $255,635 for post retirement healthcare
and life insurance during the six months ended June 30, 2011. For the remainder of 2011 the
Company expects to make approximately $325,000 of pension plan payments, of which $48,310 was
accrued at June 30, 2011. The Company also expects to make approximately $677,365 of post
retirement healthcare and life insurance payments for the remainder of 2011, all of which are
accrued at June 30, 2011.
On August 7, 2010, the Company entered into a new collective bargaining agreement with employees
represented by the International Association of Machinists and Aerospace Workers at the Companys
Columbus, Ohio production facility. As part of the new agreement, the post retirement health and
life insurance benefits for all current and future represented employees who were not retired as of
August 7, 2010 were eliminated in exchange for a one-time cash payment of $1,257,000. Individuals
who retired prior to August 7, 2010 remain eligible for post retirement health and life insurance
benefits.
The elimination of post retirement health and life insurance benefits described above resulted in a
reduction of the Companys post retirement benefits liability of approximately $10,282,000 in 2010.
This reduction in post retirement benefits liability was treated as a negative plan amendment and
is being amortized as a reduction to net periodic benefit cost over approximately twenty years, the
remaining life expectancy of the remaining participants in the plan. This negative plan amendment
will result in net periodic benefit cost reductions of approximately $496,000 per year in 2011 and
each year thereafter during the amortization period, and lower interest costs associated with the
reduced post retirement benefits liability. The plan was re-measured using a discount rate of 5.1%
at the time of the negative plan amendment.
9
Table of Contents
6. Debt
Debt consists of the following at:
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Capex loan payable to a bank, interest at
a variable rate with monthly payments of
interest and principal over a seven-year
period through May 2016 |
$ | 8,428,571 | $ | 9,285,714 | ||||
Mexican loan payable to a bank, interest
at a variable rate with annual principal
and monthly interest payments over a
five-year period through May 2014 |
4,800,000 | 6,400,000 | ||||||
Term loan payable to a bank, interest at a
variable rate with monthly payments of
interest and principal over a seven-year
period through January 2011. Paid in full
during January 2011 |
| 107,131 | ||||||
Industrial Revenue Bond, interest
adjustable weekly, payable quarterly,
principal due in variable quarterly
installments through April 2013, secured
by a bank letter of credit |
1,585,000 | 1,940,000 | ||||||
Revolving line of credit |
| | ||||||
Revolving loan |
| | ||||||
Total |
14,813,571 | 17,732,845 | ||||||
Less current portion |
(4,074,289 | ) | (4,151,420 | ) | ||||
Long-term debt |
$ | 10,739,282 | $ | 13,581,425 | ||||
Credit Agreement
In 2008, the Company and its wholly owned subsidiary, CoreComposites de Mexico, S. de R.L. de C.V.,
entered into a credit agreement (the Credit Agreement) to refinance certain existing debt and
borrow funds to finance the construction of the Companys new manufacturing facility in Mexico.
Under this Credit Agreement, the Company received certain loans, subject to the terms and
conditions stated in the agreement, which included (1) a $12,000,000 Capex loan; (2) an $8,000,000
Mexican loan; (3) an $8,000,000 variable rate revolving line of credit; (4) a $2,678,563 term loan
to refinance an existing term loan; and (5) a letter of credit in an undrawn face amount of
$3,332,493 with respect to the Companys existing Industrial Development Revenue Bond (IDRB)
financing. The Credit Agreement is secured by a guarantee of each U.S. subsidiary of the Company,
and by a lien on substantially all of the present and future assets of the Company and its U.S.
subsidiaries, except that only 65% of the stock issued by CoreComposites de Mexico, S. de C.V. has
been pledged. The $8,000,000 Mexican loan is also secured by substantially all of the present and
future assets of the Companys Mexican subsidiary.
As disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2010, the
Company plans to add additional capacity to its Matamoros, Mexico facility to meet demand in 2012
and beyond. The Company expects to invest approximately $14,500,000 for this capacity expansion,
of which approximately $8,700,000 is planned to be spent in 2011. To secure additional funding for
this capacity expansion, the Company and its wholly owned subsidiary, CoreComposites de Mexico, S.
de R.L. de C.V., entered into a sixth amendment (the Sixth Amendment) to the Credit Agreement on
June 17, 2011. Pursuant to the terms of the Sixth Amendment, the parties agreed to modify certain
terms of the Credit Agreement. These modifications included (1) the addition of a $10,000,000
Mexican Expansion Revolving Loan with a commitment through May 31, 2013 at an applicable margin of
Libor plus 175 basis points; (2) modification to the fixed charge definition to exclude capital
expenditures of up to $14,500,000 associated with the Matamoros facility expansion project; (3) a
decrease in the applicable margin for interest rates to 175 basis points from 275 basis points for
the Capex and Mexican loans and the revolving line of credit; (4) a decrease in the non-refundable
letter of credit fee for the IDRB letter of credit to 175 basis points from 300 basis points; and
(5) an extension of the commitment period for the revolving line of credit to May 31, 2013.
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Revolving Line of Credit
At June 30, 2011, the Company had available an $8,000,000 variable rate revolving line of credit,
scheduled to mature on May 31, 2013. The revolving line of credit bears interest at daily LIBOR
plus 175 basis points and is collateralized by all of the present and future assets of the Company
and its U.S. subsidiaries (except that only 65% of the stock issued by CoreComposites de Mexico, S.
de C.V. has been pledged).
Revolving Loan
At June 30, 2011, the Company had available a $10,000,000 variable rate revolving loan, scheduled
to mature on May 31, 2013. The revolving loan bears interest at daily LIBOR plus 175 basis points
and is collateralized by all of the present and future assets of the Company and its U.S.
subsidiaries (except that only 65% of the stock issued by CoreComposites de Mexico, S. de C.V. has
been pledged).
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 June 30, 2011, the Company was in compliance with its
financial covenants associated with the loans made under the Credit Agreement as described above.
Management regularly evaluates the Companys ability to meet its debt covenants based on the
Companys forecasts. Based upon the Companys forecasts, which are primarily based on industry
analysts estimates of heavy and medium-duty truck production volumes, as well as other
assumptions, management believes that the Company will be able to maintain compliance with its
financial covenants for the next 12 months.
Management believes that cash flow from operating activities, available borrowings under the Credit
Agreement and the additional financing obtained in the second quarter of 2011 will be sufficient to
meet the Companys liquidity needs. If a material adverse change in the financial position of the
Company should occur, or if actual sales or expenses are substantially different than what has been
forecasted, the Companys 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 IDRB, the Company entered into an interest rate swap
agreement through April 2013, which was initially designated as a cash flow hedging instrument.
Under this agreement, the Company paid a fixed rate of 4.89% to the counterparty and received 76%
of the 30-day commercial paper rate. During 2010, the Company determined this interest rate swap
was no longer highly effective. As a result, the Company discontinued the use of hedge accounting
effective January 1, 2010 related to this swap, and began recording mark-to-market adjustments
within interest expense in the Companys Consolidated Statements of Operations. The pre-tax amount
previously recognized in Accumulated Other Comprehensive Income (Loss), totaling $(199,990) as of
December 31, 2009, is being amortized as an increase to interest expense of $3,384 per month, net
of tax, over the remaining term of the interest rate swap agreement beginning January 2010. The
fair value of the swap was a liability of $85,657 and $126,095 as of June 30, 2011 and December 31,
2010, respectively. The Company recorded interest income of $40,438 for a mark-to-market
adjustment of swap fair value for the first six months of 2011 related to this swap. The notional
amount of the swap at June 30, 2011 and December 31, 2010 was $1,585,000 and $1,940,000,
respectively.
Effective December 18, 2008, the Company entered into an interest rate swap agreement that became
effective May 1, 2009 and continues through May 2016, which was designated as a cash flow hedge of
the $12,000,000 Capex 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 Capex loan were amended. The Company then 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 Income
(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 June 30, 2011 and December 31,
2010 was a liability of $238,648 and $224,499, respectively. The Company recorded interest expense
of $14,149 for a mark-to-market adjustment of swap fair value for the first six months of 2011
related to this swap. The notional amount of the swap at June 30, 2011 and December 31, 2010 was
$8,428,571 and $9,285,714, respectively.
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Interest expense includes $61,000 and $87,000 of expense for settlements related to the Companys
swaps for the three months ended June 30, 2011 and 2010, respectively. For the six months ended
June 30, 2011 and 2010, interest expense includes $127,000 and $181,000, respectively, of expense
for settlements related to the Companys swaps.
7. Income Taxes
In the first quarter of 2010, the Patient Protection and Affordable Care Act (PPACA) was signed
into law. The PPACA changed the tax treatment related to an existing retiree drug subsidy (RDS)
available to sponsors of retiree health benefit plans that provide a benefit that is at least
actuarially equivalent to the benefits under Medicare Part D. As a result of the PPACA, RDS
payments will effectively become taxable in tax years beginning in 2013 by requiring the amount of
the subsidy received to be offset against the Companys deduction for health care expenses.
Accordingly, during the first quarter of 2010, the Company recorded a one time charge to income tax
expense of $1,021,000 related to the write down of its deferred tax asset for RDS.
The Companys consolidated balance sheets at June 30, 2011 and December 31, 2010 include a net
deferred tax asset of $3,931,040 and $3,910,495, 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.
Income tax expense for the six months ended June 30, 2011 is estimated to be $2,661,966, or 34% of
income before income taxes. Income tax expense for the six months ended June 30, 2010 was
estimated to be $1,701,625, or 85% of total income before income taxes. Excluding the write down
of the aforementioned deferred tax asset for RDS, the Companys effective tax rate was estimated to
be 34% for the six months ended June 30, 2010.
The Company follows accounting guidance related to uncertainty in income taxes. As of June 30,
2011, the Company had no liability for unrecognized tax benefits under this guidance. The Company
does not anticipate that the unrecognized tax benefits will significantly change within the next
twelve months.
The Company files income tax returns in the U.S. federal jurisdiction, Mexico and various state
jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations
by tax authorities for the years before 2008 and is subject to income tax examinations by Mexican
authorities since the Company began business in Mexico in 2001. 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 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 six months ended June 30, 2011:
Number | Weighted | |||||||
of | Average | |||||||
Options | Exercise Price | |||||||
Outstanding at December 31, 2010 |
520,275 | $ | 3.31 | |||||
Exercised |
(19,965 | ) | 3.15 | |||||
Granted |
| | ||||||
Forfeited |
| | ||||||
Outstanding at June 30, 2011 |
500,310 | $ | 2.86 | |||||
Exercisable at June 30, 2011 |
474,510 | $ | 3.35 | |||||
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The following summarizes the status of, and changes to, unvested options during the six months
ended June 30, 2011:
Number | Weighted | |||||||
Of | Average | |||||||
Options | Exercise Price | |||||||
Unvested at December 31, 2010 |
25,800 | $ | 2.75 | |||||
Granted |
| | ||||||
Vested |
| | ||||||
Forfeited |
| | ||||||
Unvested at June 30, 2011 |
25,800 | $ | 2.75 | |||||
At June 30, 2011 and 2010, there was $19,546 and $37,692, respectively, of total unrecognized
compensation expense related to unvested stock options granted under the plan. That cost is
expected to be recognized over the weighted-average period of 2.5 years. Total compensation cost
related to incentive stock options for the six months ended June 30, 2011 and 2010 was $2,588 and
$24,810, respectively. This compensation expense is allocated such that $2,588 and $23,803 are
included in selling, general and administrative expenses and $0 and $1,007 are recorded in cost of
sales for the six months ended June 30, 2011 and 2010, respectively.
Restricted Stock
In 2006, the Company 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 June 30, 2011 and changes
during the six months ended June 30, 2011:
Weighted | ||||||||
Number | Average | |||||||
Of | Grant Date | |||||||
Shares | Fair Value | |||||||
Unvested balance at December 31, 2010 |
203,797 | $ | 3.91 | |||||
Granted |
50,466 | 9.48 | ||||||
Vested |
(23,779 | ) | 4.96 | |||||
Forfeited |
| | ||||||
Unvested balance at June 30, 2011 |
230,484 | $ | 5.02 | |||||
At June 30, 2011 and 2010, there was $723,563 and $604,823, respectively, of total unrecognized
compensation expense related to Restricted Stock granted under the 2006 Plan. That cost is expected
to be recognized over the weighted-average period of 2.2 years. Total compensation costs related
to restricted stock grants for the six months ended June 30, 2011 and 2010 were $190,140 and
$163,952, respectively, all of which was recorded to selling, general and administrative expense.
During the six months ended June 30, 2011, employees surrendered 6,404 shares of the Companys
common stock to satisfy income tax withholding obligations in connection with the vesting of
restricted stock.
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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.
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 Company has two Level 2 fair value measurements all of which relate to the Companys interest
rate swaps. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed
and floating rate debt, and these swaps are valued using observable benchmark rates at commonly
quoted intervals for the full term of the swaps. These interest rate swaps are discussed in detail
in Note 6.
The following table presents financial liabilities measured and recorded at fair value on the
Companys Consolidated Balance Sheets on a recurring basis and their level within the fair value
hierarchy as of June 30, 2011 and December 31, 2010:
Total Liabilities as of | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | June 30, 2011 | |||||||||||||
Interest rate
swap
liabilities |
$ | | $ | 324,305 | $ | | $ | 324,305 |
Total Liabilities as of | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | December 31, 2010 | |||||||||||||
Interest rate
swap
liabilities |
$ | | $ | 350,916 | $ | | $ | 350,916 |
There were no non-recurring fair value measurements for the six months ended June 30, 2011.
Core Molding Technologies derivative instruments included on the Consolidated Balance Sheets were
as follows:
Balance Sheet | June 30, | December 31, | ||||||||||
Location | 2011 Fair Value | 2010 Fair Value | ||||||||||
Derivatives designated as hedging instruments Interest rate risk activities |
Interest rate swaps | $ | | $ | 322 | |||||||
Derivatives not designated as hedging instruments Interest rate risk activities |
Interest rate swaps | 324,305 | 350,594 | |||||||||
Total |
$ | 324,305 | $ | 350,916 | ||||||||
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The effect of derivative instruments on the Consolidated Statements of Operations was as
follows:
Derivatives in Cash Flow Hedging Relationships
Location of Gain | ||||||||||||||||||||
(Loss) Reclassified | ||||||||||||||||||||
Derivatives in Cash | Amount of Gain (Loss) | from AOCI into | Amount of Gain (Loss) | |||||||||||||||||
Flow Hedging | Recognized in OCI on | Income | Reclassified from AOCI into | |||||||||||||||||
Relationships | Derivative (Effective Portion) | (Effective Portion) | Expense (Effective Portion) | |||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
Three months ended | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Interest rate swaps |
$ | | $ | 8,662 | Interest expense, net | $ | | $ | (7,499 | ) | ||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
Six months ended |
2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Interest rate swaps |
$ | 322 | $ | 18,967 | Interest expense, net | $ | | $ | (17,872 | ) |
Derivatives not designated as hedging instruments
Location of Gain (Loss) | Amount of Realized/Unrealized Gain | |||||||||||
Derivatives Not Designated as | Recognized | (Loss) Recognized in Income on | ||||||||||
Hedging Instruments | in Income on Derivative | Derivatives | ||||||||||
June 30, | June 30, | |||||||||||
Three months ended | 2011 | 2010 | ||||||||||
Interest rate swaps |
Interest income (expense) | $ | (64,499 | ) | $ | (170,686 | ) | |||||
June 30, | June 30, | |||||||||||
Six months ended |
2011 | 2010 | ||||||||||
Interest rate swaps |
Interest income (expense) | $ | (886 | ) | $ | (267,485 | ) |
As discussed in Note 6, the Company discontinued the use of hedge accounting for its two interest
rate swaps, effective March 31, 2009 for the Capex swap and January 1, 2010 for the IDRB swap. The
Company now records all mark to market adjustments related to these interest rate swaps within
interest expense in the Companys Consolidated Statements of Operations, since the date the Company
discontinued hedge accounting for each swap. 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 $54,350, net of taxes.
10. Recent Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
2011-04, Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 represents the
converged guidance of the FASB and the International Accounting Standards Board on fair value
measurement. The guidance clarifies certain existing requirements and changes certain principles
to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for
fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after
December 15, 2011. The Company does not anticipate the adoption of this guidance will have a
material impact on its consolidated financial statements.
In June 2011, the FASB issued Accounting Standards Update 2011-05, Presentation of Comprehensive
Income (ASU 2011-05). ASU 2011-05 amends guidance on the presentation of comprehensive income in
financial statements to improve the comparability, consistency and transparency of financial
reporting and to increase the prominence of items that are recorded in other comprehensive income.
The guidance requires entities to report components of comprehensive income in either a continuous
statement of comprehensive income or two separate, but consecutive, statements. The provisions of
this new guidance are effective for interim and annual periods beginning after December 15, 2011.
The Company does not anticipate the adoption of this guidance will have a material impact on its
consolidated financial statements.
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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, social and political environments in the
countries in which Core Molding Technologies operates; safety and security conditions in Mexico;
dependence upon two major customers as the primary source of Core Molding Technologies sales
revenues; efforts of Core Molding Technologies to expand its customer base; the actions of
competitors, customers, and suppliers; failure of Core Molding Technologies suppliers to perform
their 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; 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; risks related to the transfer
of production from Core Molding Technologies Columbus facility to its Matamoros 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 2010 Annual Report to Shareholders on Form 10-K.
Description of the Company
Core Molding Technologies is a compounder of sheet molding composite (SMC) and molder of
fiberglass reinforced plastics, primarily for the medium and heavy-duty truck market, which
accounted for 91% of the Companys sales for the six months ended June 30, 2011. Core Molding
Technologies produces high quality fiberglass reinforced molded products and SMC materials for
varied markets, including light, medium and heavy-duty trucks, automobiles and automotive
aftermarkets, personal watercraft, and other commercial products. The demand for Core Molding
Technologies products is affected by economic conditions in the United States, Canada, and Mexico.
Core Molding Technologies manufacturing operations have a significant fixed cost component.
Accordingly, during periods of changing demand, 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 molding utilizing a
vacuum infusion 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 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 of its new 437,000 square foot production facility
in Matamoros, Mexico that replaced its leased
facility. In conjunction with the construction of its new facility, the Company also added
compression molding operations in Matamoros, Mexico. In July 2011, the Company incorporated Core Specialty Composites, LLC for the purpose of adding
manufacturing capacities to produce parts outside of the Companys traditional markets.
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Overview
For the six months ended June 30, 2011 the Company recorded net income of $5,111,000 or $0.74 per
basic and $0.70 per diluted share, compared with net income of $304,000, or $0.04 per basic and
diluted share, for the six months ended June 30, 2010. Product sales increased 52% as compared to
the same period in 2010, which is primarily the result of increased demand from North American
medium and heavy-duty truck customers, as well as increased sales from new business awards.
Negatively impacting net income for the six months ended June 30, 2010 was a charge to income tax
expense of $1,021,000 related to the Patient Protection and Affordable Care Act (PPACA), which
repealed the tax benefits the Company previously received related to certain retiree prescription
drug costs. Additionally, during the six months ended June 30, 2010, the Company recorded
approximately $1,320,000 of expenses for transfer costs associated with the move of certain product
lines from its Columbus, Ohio production facility to its Matamoros, Mexico production facility.
Looking forward, the Company anticipates 2011 sales levels to continue to increase, as industry
analysts continue to forecast increased volume in truck production for the remainder of 2011 and
into 2012.
Results of Operations
Three Months Ended June 30, 2011, as Compared to Three Months Ended June 30, 2010
Net sales for the three months ended June 30, 2011 totaled $35,294,000, representing an approximate
50% increase from the $23,476,000 reported for the three months ended June 30, 2010. Included in
total sales were tooling project sales of $1,747,000 and $2,002,000 for the three months ended June
30, 2011 and 2010, respectively. Tooling project sales result from billings to customers primarily
for molds and assembly equipment specific to their products as well as other non-production
billings. These sales are sporadic in nature and fluctuate in regard to scope and related revenue
on a period-to-period basis. Total product sales, excluding tooling project sales, were
approximately 56% higher for the three months ended June 30, 2011, as compared to the same period a
year ago. The primary reason for the increase is higher demand from North American medium and
heavy-duty truck customers. Increased demand for the Companys products and awards of new business
had a favorable impact on sales of $13,090,000. This increase was offset by the effects of pricing
which decreased product sales by approximately $1,017,000. The decrease in pricing was primarily
the result of the transfer of certain products to the Companys Matamoros, Mexico production
facility.
Sales to Navistar totaled $15,566,000 for the three months ended June 30, 2011, increasing 9% from
$14,231,000 in sales for the three months ended June 30, 2010. Included in total sales was
$828,000 of tooling sales for the three months ended June 30, 2011 compared to $1,342,000 for the
same three months in 2010. Product sales to Navistar increased by 14% for the three months ended
June 30, 2011 as compared to the same period in the prior year. The primary reason for the
increase in product sales is higher demand for North American medium and heavy-duty trucks. This
increase was partially off-set by decreased pricing for certain products transferred to the
Companys Matamoros, Mexico production facility during 2010.
Sales to PACCAR totaled $12,669,000 for the three months ended June 30, 2011, increasing 111% from
$5,991,000 in sales for the three months ended June 30, 2010. Included in total sales was $223,000
of tooling sales for the three months ended June 30, 2011 compared to $644,000 for the same three
months in 2010. Product sales to PACCAR increased by 133% for the three months ended June 30, 2011
as compared to the same period in the prior year. The primary reasons for the increase in product
sales is higher demand for North American medium and heavy-duty trucks as noted above as well as
increased demand for truck models for which the Company provides content.
Sales to other customers for the three months ended June 30, 2011 increased 117% to $7,058,000
compared to $3,254,000 for the three months ended June 30, 2010. Included in total sales was
$696,000 of tooling sales for the three months ended June 30, 2011 compared to $16,000 for the same
three months in 2010. Product sales to other customers increased by 97% for the three months ended
June 30, 2011 as compared to the same period in the prior year, with approximately 50% of the
increase resulting from increased product sales to other medium and heavy-duty truck manufacturers.
The remaining increase in other product sales was due to increased demand for the Companys
products from customers outside of the medium and heavy-duty truck market.
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Gross margin was approximately 22% of sales for the three months ended June 30, 2011, compared with
15% for the three months ended June 30, 2010. Contributing approximately 5% to the increase in
gross margin as a percent of sales for the three months ended June 30, 2011 were lower labor and
benefit costs as a percent of sales. Labor costs as a percent of sales decreased due to
lower wage rates and improved efficiencies. Benefit costs as a percent of sales decreased primarily due to lower health
care costs including lower post retirement health benefit costs. Included in cost of sales for the
three months ended June 30, 2010 was approximately $1,000,000 of costs associated with transferring
certain operations to the Companys production facility in Mexico, which negatively impacted gross
margin by approximately 4% of sales for that period. There were no such costs for the same period
in 2011, as the transfer of these operations was completed in 2010. Better absorption of fixed
costs of production due to increases in production volume contributed approximately 3% of sales to
gross margin. The Companys manufacturing operations have significant overhead costs which do not
change proportionately with production volumes. Partially offsetting these were changes in sales
mix which negatively impacted gross margin by approximately 2.5% of sales, and higher material
costs which negatively impacted gross margin by approximately 2.5% of sales, for the three months
ended June 30, 2011.
Selling, general and administrative expense (SG&A) was $3,177,000 for the three months ended June
30, 2011, compared to $2,293,000 for the three months ended June 30, 2010. The primary reason for
the increase was higher employee profit sharing expense of $639,000 and higher labor and benefit
costs of approximately $119,000.
Interest expense totaled $267,000 for the three months ended June 30, 2011, compared to interest
expense of $457,000 for the three months ended June 30, 2010. The primary cause of the decrease
was mark to market adjustments on the Companys interest rate swaps. In the three months ended
June 30, 2011 approximately $64,000 of expense was recorded related to the mark to market of the
Companys interest rate swaps as compared to approximately $171,000 of expense for the three months
ended June 30, 2010. Also contributing to the decrease in interest expense were reductions to
interest rates on outstanding borrowings under the Credit Agreement, as amended, as well as
reductions in outstanding loan balances due to regularly scheduled principal payments.
Income tax expense for the three months ended June 30, 2011 and June 30, 2010 was approximately 34%
of total income before income taxes.
Core Molding Technologies recorded net income for the three months ended June 30, 2011 of
$2,842,000 or $0.41 per basic and $0.39 per diluted share, compared with net income of $441,000, or
$0.06 per basic and diluted share, for the three months ended June 30, 2010.
Six Months Ended June 30, 2011, as Compared to Six Months Ended June 30, 2010
Net sales for the six months ended June 30, 2011 totaled $64,283,000, representing an approximate
46% increase from the $43,918,000 reported for the six months ended June 30, 2010. Included in
total sales were tooling project sales of $1,762,000 and $2,749,000 for the six months ended June
30, 2011 and 2010, respectively. Tooling project sales result from billings to customers primarily
for molds and assembly equipment specific to their products as well as other non-production
billings. These sales are sporadic in nature and fluctuate in regard to scope and related revenue
on a period-to-period basis. Total product sales, excluding tooling project sales, were
approximately 52% higher for the six months ended June 30, 2011, as compared to the same period a
year ago. The primary reason for the increase is higher demand from North American medium and
heavy-duty truck customers. Increased demand for the Companys products and awards of new business
had a favorable impact on sales of $23,588,000. This increase was offset by the effects of pricing
which decreased product sales by approximately $2,236,000. The decrease in pricing was primarily
the result of the transfer of certain products to the Companys Matamoros, Mexico production
facility.
Sales to Navistar totaled $29,339,000 for the six months ended June 30, 2011, increasing 15% from
$25,556,000 in sales for the six months ended June 30, 2010. Included in total sales was $828,000
of tooling sales for the six months ended June 30, 2011 compared to $1,771,000 for the same six
months in 2010. Product sales to Navistar increased by 20% for the six months ended June 30, 2011
as compared to the same period in the prior year. The primary reason for the increase in product
sales is higher demand for North American medium and heavy-duty trucks. This increase was
partially off-set by decreased pricing for certain products transferred to the Companys Matamoros,
Mexico production facility during 2010.
Sales to PACCAR totaled $21,697,000 for the six months ended June 30, 2011, increasing 80% from
$12,024,000 in sales for the six months ended June 30, 2010. Included in total sales was $223,000
of tooling sales for the six months ended June 30, 2011 compared to $889,000 for the same six
months in 2010. Product sales to PACCAR increased by 93% for the six months ended June 30, 2011 as
compared to the same period in the prior year. The primary reasons for the increase in product
sales is higher demand for North American medium and heavy-duty trucks as noted above as well as
increased demand for truck models for which the Company provides content.
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Sales to other customers for the six months ended June 30, 2011 increased 109% to $13,247,000
compared to $6,337,000 for the six months ended June 30, 2010. Included in total sales was
$711,000 of tooling sales for the six months ended June 30, 2011 compared to $88,000 for the same
six months in 2010. Product sales to other customers increased by 101% for the six months ended
June 30, 2011 as compared to the same period in the prior year, with approximately 48% of the
increase resulting from increased product sales to other medium and heavy-duty truck manufacturers.
The remaining increase in other product sales was due to increased demand for the Companys
products from customers outside of the medium and heavy-duty truck market.
Gross margin was approximately 22% of sales for the six months ended June 30, 2011, compared with
17% for the six months ended June 30, 2010. Contributing approximately 5% to the increase in gross
margin as a percent of sales for 2011 were lower labor and benefit costs as a percent of sales.
Labor costs as a percent of sales decreased due to lower wage rates and improved efficiencies. Benefit costs
as a percent of sales decreased primarily due to lower health care costs including lower post
retirement health benefit costs. Included in cost of sales for the six months ended June 30, 2010
was approximately $1,320,000 of costs associated with transferring certain operations to the
Companys production facility in Mexico, which negatively impacted gross margin by approximately 3%
of sales for the period. There were no such costs for the same period in 2011, as the transfer of
these operations was completed in 2010. Better absorption of fixed costs of production due to
increases in production volume contributed approximately 1.5% of sales to gross margin during 2011.
The Companys manufacturing operations have significant overhead costs which do not change
proportionately with production volumes. Partially offsetting these were higher material costs
which negatively impacted gross margin by approximately 2.5% of sales, and changes in sales mix
which negatively impacted gross margin by approximately 1.5% of sales, for the three months ended
June 30, 2011.
Selling, general and administrative expense (SG&A) was $6,100,000 for the six months ended June
30, 2011, compared to $4,619,000 for the six months ended June 30, 2010. The primary reason for
the increase was higher employee profit sharing expense of $1,133,000 and higher labor and benefit
costs of approximately $278,000.
Interest expense totaled $449,000 for the six months ended June 30, 2011, compared to interest
expense of $877,000 for the six months ended June 30, 2010. The primary cause of the decrease was
mark to market adjustments on the Companys interest rate swaps. In the six months ended June 30,
2011 approximately $1,000 of expense was recorded related to the mark to market of the Companys
interest rate swaps as compared to approximately $268,000 of expense for the six months ended June
30, 2010. Also contributing to the decrease in interest expense were reductions to interest rates
on outstanding borrowings under the Credit Agreement, as amended, as well as reductions in
outstanding loan balances due to regularly scheduled principal payments.
Income tax expense for the six months ended June 30, 2011 was approximately 34% of total income
before income taxes. Income tax expense for the six months ended June 30, 2010 was approximately
85% of total income before income taxes. The Companys effective rate in 2010 includes the impact
of writing off deferred tax assets of $1,021,000 due to the passage of the PPACA which repealed the
tax benefit associated with certain retiree prescription drug subsidies previously recorded by the
Company. Without this charge the Companys estimated tax rate was 34% for the six months ended
June 30, 2010.
Core Molding Technologies recorded net income for the six months ended June 30, 2011 of $5,111,000
or $0.74 per basic and $0.70 per diluted share, compared with net income of $304,000, or $0.04 per
basic and diluted share, for the six months ended June 30, 2010.
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.
Cash provided by operating activities for the six months ended June 30, 2011 totaled $647,000. Net
income of $5,111,000 positively impacted operating cash flows. Non-cash deductions of depreciation
and amortization contributed $1,967,000 to operating cash flow. Changes in working capital
decreased cash provided by operating activities by $6,407,000. Changes in working capital
primarily relate to an increase in accounts receivable due to increased product sales as well as
higher inventory levels. These were offset by higher accounts payable as of June 30, 2011 as
compared to December 31, 2010.
Cash used in investing activities for the six months ended June 30, 2011 was $3,387,000, all of
which represents capital improvements and equipment purchases for the Companys production
facilities. As disclosed in the Companys Annual Report on Form 10-K for the year ended December
31, 2010, the Company will require additional capacity at its Matamoros, Mexico facility to meet
demand in 2012 and beyond. Given these capacity needs management plans to invest approximately
$14,500,000 for this capacity expansion. For the six months ended June 30, 2011, the Company spent
approximately $2,700,000 on capital improvements and the purchase of equipment at its Matamoros,
Mexico facility, and plans to spend an additional $6,000,000 during the remainder of 2011 in
connection with the Matamoros facility expansion project. The remaining spending represents
capital improvements and equipment purchases at the Companys other production facilities.
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Table of Contents
Financing activities decreased cash by $2,917,000. This decrease was a result of scheduled
repayments of principal on the Companys Mexican loan, capex loan, industrial development revenue
bond and term loan.
To secure additional funding for the Matamoros facility expansion project as discussed above,
Company and its wholly owned subsidiary, CoreComposites de Mexico, S. de R.L. de C.V., entered into
a sixth amendment (the Sixth Amendment) to the Credit Agreement on June 17, 2011. Pursuant to
the terms of the Sixth Amendment, the parties agreed to modify certain terms of the Credit
Agreement. These modifications included (1) the addition of a $10,000,000 Mexican Expansion
Revolving Loan with a commitment through May 31, 2013 at an applicable margin of Libor plus 175
basis points; (2) modification to the fixed charge definition to exclude capital expenditures of up
to $14,500,000 associated with the Matamoros facility expansion project; (3) a decrease in the
applicable margin for interest rates to 175 basis points from 275 basis points for the Capex and
Mexican loans and the revolving line of credit; (4) a decrease in the non-refundable letter of
credit fee for the IDRB letter of credit to 175 basis points from 300
basis points; and (5) an
extension of the commitment period for the revolving line of credit to May 31, 2013.
At June 30, 2011, the Company had no cash on hand, an available line of credit of $8,000,000 and an
available revolving loan of $10,000,000. Both the line of credit and revolving loan are scheduled
to mature on May 31, 2013. At June 30, 2011, Core Molding Technologies had no outstanding
borrowings on the line of credit or revolving loan.
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 June 30, 2011, the Company was in compliance with its
financial covenants.
Management regularly evaluates the Companys ability to effectively meet its debt covenants based
on the Companys forecasts. Based on the Companys forecasts which are primarily based on industry
analysts estimates of heavy and medium-duty truck production volumes, as well as other
assumptions, management believes that the Company will be able to maintain compliance with its
financial covenants for the next 12 months. Management believes that cash flow from operating
activities, available borrowings under the Credit Agreement and the additional financing obtained
in the second quarter of 2011 will be sufficient to meet the Companys liquidity needs. 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 May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
2011-04, Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 represents the
converged guidance of the FASB and the International Accounting Standards Board on fair value
measurement. The guidance clarifies certain existing requirements and changes certain principles
to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for
fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after
December 15, 2011. The Company does not anticipate the adoption of this guidance will have a
material impact on its consolidated financial statements.
In June 2011, the FASB issued Accounting Standards Update 2011-05, Presentation of Comprehensive
Income (ASU 2011-05). ASU 2011-05 amends guidance on the presentation of comprehensive income in
financial statements to improve the comparability, consistency and transparency of financial
reporting and to increase the prominence of items that are recorded in other comprehensive income.
The guidance requires entities to report components of comprehensive income in either a continuous
statement of comprehensive income or two separate, but consecutive, statements. The provisions of
this new guidance are effective for interim and annual periods beginning after December 15, 2011.
The Company does not anticipate the adoption of this guidance will have a material impact on its
consolidated financial statements.
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Table of Contents
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 $113,000 at June 30, 2011 and $118,000 at December 31, 2010.
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 chargebacks by $832,000 at June 30, 2011 and $695,000
at December 31, 2010.
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. 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 six months ended June 30, 2011 or the year
ended December 31, 2010.
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 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 June 30, 2011 and December 31, 2010 of $1,032,000 and $1,041,000, respectively.
Post retirement benefits: Management records an accrual for post retirement costs associated with
the health care plan sponsored by Core Molding Technologies. Should actual results differ from the
assumptions used to determine the reserves, additional provisions may be required. In particular,
increases in future healthcare costs above the assumptions could have an adverse effect on Core
Molding Technologies operations. The effect of a change in healthcare costs is described in Note
10 of the Notes to Consolidated Financial Statements, which are contained in the 2010 Annual Report
to Shareholders. As further described in Note 5, in August 2010, the Company eliminated its post
retirement health and life insurance benefits for all current and future represented employees who
had not retired as of August 7, 2010. The elimination of benefits resulted in a reduction of the
Companys post retirement benefits liability of $10,282,000. Core Molding Technologies had a
liability for post retirement healthcare benefits based on actuarially computed estimates of
$10,835,000 at June 30, 2011 and $10,837,000 at December 31, 2010.
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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 Consolidated 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 June 30, 2011 the Company had a net liability related to
tooling in progress of $381,000, which represents approximately $3,674,000 of progress tooling
billings and $3,293,000 of progress tooling expenses. At December 31, 2010 the Company had a net
liability related to tooling in progress of $320,000, which represents approximately $2,697,000 of
progress tooling billings and $2,377,000 of progress tooling expenses.
Income taxes: The Consolidated Balance Sheets at June 30, 2011 and December 31, 2010, include a
deferred tax asset of $3,931,000 and $3,910,000, 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 2010 Annual Report to
Shareholders.
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Table of Contents
Part I Financial Information
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Core Molding Technologies primary market risk results from changes in the price of
commodities used in its manufacturing operations. Core Molding Technologies is also exposed to
fluctuations in interest rates and foreign currency fluctuations associated with the Mexican Peso.
Core Molding Technologies does not hold any material market risk sensitive instruments for trading
purposes.
Core Molding Technologies has the following five items that are sensitive to market risks: (1)
Industrial Development Revenue Bond (IDRB) with a variable interest rate (although the Company
has an interest rate swap to fix the interest rate at 4.89%); (2) Revolving Line of Credit,
Revolving loan and Mexican loan payable under the Credit Agreement, each of which bears a variable
interest rate; (3) Capex loan payable with a variable interest rate (although the Company has an
interest rate swap to fix the variable portion of the applicable interest rate at 2.3%); (4)
foreign currency purchases in which the Company purchases Mexican pesos with United States dollars
to meet certain obligations that arise due to operations at the facility located in Mexico; and (5)
raw material purchases in which Core Molding Technologies purchases various resins and fiberglass
for use in production. The prices and availability of these materials are affected by the prices
of crude oil and natural gas as well as processing capacity versus demand.
Assuming a hypothetical 10% increase in commodity prices, Core Molding Technologies would be
impacted by an increase in raw material costs, which would have an adverse effect on operating
margins.
Assuming a hypothetical 10% change in short-term interest rates, interest paid on the Companys
Line of Credit, Revolving loan and the Mexican loan would have been impacted in 2011 and 2010. The
interest rate on these loans is based upon LIBOR. Although a 10% change in short-term interest
rates would impact the interest paid by the Company, it would not have a material effect on
earnings before tax.
A 10% change in future interest rate curves would impact the fair value of the
Companys interest rate swaps.
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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.
24
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 2010 Annual Report on Form
10-K.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Information concerning our stock repurchases during the three months ended June 30,
2011 is below. All stock was withheld to satisfy tax withholding obligations upon
vesting of restricted stock awards.
Total Number of | Maximum | |||||||||||||||
Total | Shares Purchased | Number that May | ||||||||||||||
Number of | Average | as Part of Publicly | Yet Be Purchased | |||||||||||||
Shares | Price Paid | Announced Plans | Under the Plans or | |||||||||||||
Period | Purchased | per Share | or Programs | Programs | ||||||||||||
April 1 to 30, 2011 |
| $ | | | | |||||||||||
May 1 to 31, 2011 |
5,499 | $ | 9.51 | | | |||||||||||
June 1 to 30, 2011 |
| $ | | | |
Item 3. | Defaults Upon Senior Securities |
None
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
None
Item 6. | Exhibits |
See Index to Exhibits
25
Table of Contents
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: August 12, 2011 | By: | /s/ Kevin L. Barnett | ||
Kevin L. Barnett | ||||
President, Chief Executive Officer, and Director | ||||
Date: August 12, 2011 | By: | /s/ Herman F. Dick, Jr. | ||
Herman F. Dick, Jr. | ||||
Vice President, Secretary, Treasurer and Chief Financial Officer |
26
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 |
27
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)
|
Sixth Amendment Agreement, dated June 17, 2011, 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 June 21, 2011 | ||
11
|
Computation of Net Income per Share | Exhibit 11 omitted because the required information is Included in Notes to Financial Statement | ||
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 August 12, 2011, 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 August 12, 2011, pursuant to 18 U.S.C. Section 1350 | Filed Herein |
28
Table of Contents
Exhibit No. | Description | Location | ||
101.INS2
|
XBRL Instance Document | Furnished Herein | ||
101.SCH2
|
XBRL Taxonomy Extension Schema Document | Furnished Herein | ||
101.CAL2
|
XBRL Taxonomy Extension Calculation Linkbase |
Furnished Herein | ||
101.LAB2
|
XBRL Taxonomy Extension Label Linkbase | Furnished Herein | ||
101.PRE2
|
XBRL Taxonomy Extension Presentation Linkbase |
Furnished Herein | ||
101.DEF2
|
XBRL Taxonomy Extension Definition Linkbase |
Furnished 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. |
|
2 | Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of
a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of
1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and
otherwise is not subject to liability under these sections. |
29