CORE MOLDING TECHNOLOGIES,INC. 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2006
OR
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o |
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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)
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Delaware
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31-1481870 |
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(State or other jurisdiction
incorporation or organization)
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(I.R.S. Employer Identification No.) |
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800 Manor Park Drive, P.O. Box 28183 |
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Columbus, Ohio
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43228-0183 |
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(Address of principal executive office)
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(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 is a large accelerated filer, an accelerated
filer, or a non-accelerated. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act (check one).
Large accelerated filer o Accelerated filer o Non-accelerated filer 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 10, 2006, the latest practicable date, 10,110,522 shares of the registrants
common shares were issued and outstanding.
TABLE OF CONTENTS
Part
I Financial Information
Core Molding Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
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September 30, |
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December 31, |
|
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|
2006 |
|
|
2005 |
|
|
|
(Unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
11,676,812 |
|
|
$ |
9,413,994 |
|
Accounts receivable (less allowance for
doubtful accounts: September 30,
2006 $318,000; December 31, 2005 $214,000) |
|
|
30,680,930 |
|
|
|
22,279,588 |
|
Inventories: |
|
|
|
|
|
|
|
|
Finished and work in process goods |
|
|
2,997,184 |
|
|
|
2,075,094 |
|
Stores |
|
|
4,776,711 |
|
|
|
5,219,927 |
|
|
|
|
|
|
|
|
Total inventories |
|
|
7,773,895 |
|
|
|
7,295,021 |
|
|
|
|
|
|
|
|
|
|
Deferred tax asset |
|
|
2,208,567 |
|
|
|
2,208,567 |
|
Foreign sales tax receivable |
|
|
951,130 |
|
|
|
756,723 |
|
Prepaid expenses and other current assets |
|
|
717,570 |
|
|
|
947,937 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
54,008,904 |
|
|
|
42,901,830 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
52,818,064 |
|
|
|
47,939,881 |
|
Accumulated depreciation |
|
|
(25,986,029 |
) |
|
|
(24,269,524 |
) |
|
|
|
|
|
|
|
Property,
plant and equipment net |
|
|
26,832,035 |
|
|
|
23,670,357 |
|
|
|
|
|
|
|
|
|
|
Deferred tax asset |
|
|
6,149,284 |
|
|
|
6,164,317 |
|
Goodwill |
|
|
1,097,433 |
|
|
|
1,097,433 |
|
Customer list / non-compete |
|
|
151,610 |
|
|
|
189,860 |
|
Other assets |
|
|
158,653 |
|
|
|
197,605 |
|
|
|
|
|
|
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Total Assets |
|
$ |
88,397,919 |
|
|
$ |
74,221,402 |
|
|
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|
|
|
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|
|
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Liabilities and Stockholders Equity |
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Liabilities: |
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Current liabilities |
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|
Current portion long-term debt |
|
$ |
1,805,716 |
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|
$ |
1,775,716 |
|
Current portion of graduated lease payments and deferred gain |
|
|
567,369 |
|
|
|
567,369 |
|
Accounts payable |
|
|
13,174,170 |
|
|
|
10,224,296 |
|
Accrued liabilities: |
|
|
|
|
|
|
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|
Compensation and related benefits |
|
|
6,434,976 |
|
|
|
5,264,515 |
|
Tooling in progress |
|
|
1,255,805 |
|
|
|
1,148,104 |
|
Interest |
|
|
78,260 |
|
|
|
103,701 |
|
Taxes |
|
|
1,350,487 |
|
|
|
130,820 |
|
Other |
|
|
2,002,867 |
|
|
|
836,580 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
26,669,650 |
|
|
|
20,051,101 |
|
|
|
|
|
|
|
|
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|
Long-term debt |
|
|
8,235,708 |
|
|
|
9,594,995 |
|
Interest rate swap |
|
|
39,147 |
|
|
|
100,965 |
|
Graduated lease payments and deferred gain |
|
|
141,494 |
|
|
|
567,030 |
|
Postretirement benefits liability |
|
|
11,021,294 |
|
|
|
9,766,544 |
|
|
|
|
|
|
|
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|
Commitments and Contingencies |
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|
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|
Stockholders Equity: |
|
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|
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|
Preferred stock $0.01 par value, authorized shares 10,000,000;
Outstanding shares: September 30, 2006 and December 31, 2005 0 |
|
|
|
|
|
|
|
|
Common stock $0.01 par
value, authorized shares 20,000,000;
Outstanding shares: September 30, 2006 10,110,522 and
December 31, 2005 10,041,467 |
|
|
101,105 |
|
|
|
100,415 |
|
Paid-in capital |
|
|
21,155,964 |
|
|
|
20,770,944 |
|
Accumulated other comprehensive loss, net of income tax |
|
|
(17,451 |
) |
|
|
(58,891 |
) |
Retained earnings |
|
|
21,051,008 |
|
|
|
13,328,299 |
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
42,290,626 |
|
|
|
34,140,767 |
|
|
|
|
|
|
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|
Total Liabilities and Stockholders Equity |
|
$ |
88,397,919 |
|
|
$ |
74,221,402 |
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements
2
Core Molding Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
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|
|
|
|
|
|
|
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|
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Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
38,854,393 |
|
|
$ |
31,045,446 |
|
|
$ |
112,635,012 |
|
|
$ |
93,262,014 |
|
Tooling |
|
|
9,223,766 |
|
|
|
568,525 |
|
|
|
11,456,118 |
|
|
|
4,527,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales |
|
|
48,078,159 |
|
|
|
31,613,971 |
|
|
|
124,091,130 |
|
|
|
97,789,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
39,335,068 |
|
|
|
25,558,445 |
|
|
|
99,360,624 |
|
|
|
77,500,507 |
|
Postretirement benefits expense |
|
|
450,417 |
|
|
|
569,135 |
|
|
|
1,762,362 |
|
|
|
1,660,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
|
39,785,485 |
|
|
|
26,127,580 |
|
|
|
101,122,986 |
|
|
|
79,160,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Gross Margin |
|
|
8,292,674 |
|
|
|
5,486,391 |
|
|
|
22,968,144 |
|
|
|
18,628,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
3,659,729 |
|
|
|
2,907,003 |
|
|
|
10,458,861 |
|
|
|
9,219,409 |
|
Postretirement benefits expense |
|
|
85,794 |
|
|
|
92,650 |
|
|
|
364,002 |
|
|
|
368,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expense |
|
|
3,745,523 |
|
|
|
2,999,653 |
|
|
|
10,822,863 |
|
|
|
9,587,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before interest and taxes |
|
|
4,547,151 |
|
|
|
2,486,738 |
|
|
|
12,145,281 |
|
|
|
9,041,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
211,707 |
|
|
|
62,442 |
|
|
|
465,885 |
|
|
|
123,051 |
|
Interest expense |
|
|
(176,293 |
) |
|
|
(180,428 |
) |
|
|
(496,390 |
) |
|
|
(577,263 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
4,582,565 |
|
|
|
2,368,752 |
|
|
|
12,114,776 |
|
|
|
8,586,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes: |
|
|
1,644,790 |
|
|
|
857,572 |
|
|
|
4,392,067 |
|
|
|
3,385,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,937,775 |
|
|
$ |
1,511,180 |
|
|
$ |
7,722,709 |
|
|
$ |
5,201,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.29 |
|
|
$ |
0.15 |
|
|
$ |
0.77 |
|
|
$ |
0.53 |
|
Diluted |
|
$ |
0.28 |
|
|
$ |
0.14 |
|
|
$ |
0.74 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
10,083,320 |
|
|
|
9,990,053 |
|
|
|
10,067,409 |
|
|
|
9,876,455 |
|
Diluted |
|
|
10,428,583 |
|
|
|
10,578,296 |
|
|
|
10,422,526 |
|
|
|
10,388,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements
3
Core Molding Technologies, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders Equity
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
Other |
|
|
|
|
|
Total |
|
|
Outstanding |
|
Paid-in |
|
Comprehensive |
|
Retained |
|
Stockholders |
|
|
Shares |
|
Amount |
|
Capital |
|
Income (Loss) |
|
Earnings |
|
Equity |
|
|
|
|
|
|
|
Balance at January 1, 2006 |
|
|
10,041,467 |
|
|
$ |
100,415 |
|
|
$ |
20,770,944 |
|
|
$ |
(58,891 |
) |
|
$ |
13,328,299 |
|
|
$ |
34,140,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,722,709 |
|
|
|
7,722,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued from
exercise of stock options |
|
|
32,750 |
|
|
|
327 |
|
|
|
101,120 |
|
|
|
|
|
|
|
|
|
|
|
101,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock issued |
|
|
36,305 |
|
|
|
363 |
|
|
|
89,568 |
|
|
|
|
|
|
|
|
|
|
|
89,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge accounting effect of the
Interest rate swaps at
September 30, 2006 net of
deferred income tax expense
of $21,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,440 |
|
|
|
|
|
|
|
41,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based compensation |
|
|
|
|
|
|
|
|
|
|
194,332 |
|
|
|
|
|
|
|
|
|
|
|
194,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2006 |
|
|
10,110,522 |
|
|
$ |
101,105 |
|
|
$ |
21,155,964 |
|
|
$ |
(17,451 |
) |
|
$ |
21,051,008 |
|
|
$ |
42,290,626 |
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
4
Core Molding Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
7,722,709 |
|
|
$ |
5,201,918 |
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,020,871 |
|
|
|
1,742,883 |
|
Deferred income taxes (benefit) expense |
|
|
(5,985 |
) |
|
|
3,151,268 |
|
Share based compensation |
|
|
284,263 |
|
|
|
|
|
Interest expense related to ineffectiveness of swap |
|
|
640 |
|
|
|
7,746 |
|
Loss on disposal of assets |
|
|
10,363 |
|
|
|
11,528 |
|
(Gain) loss on foreign currency financial statements |
|
|
56,156 |
|
|
|
(4,242 |
) |
Amortization of gain on sale/leaseback transactions |
|
|
(425,536 |
) |
|
|
(340,166 |
) |
Change in assets and liabilities (net of effects
from acquisition in 2005) : |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(8,401,342 |
) |
|
|
(10,185,439 |
) |
Inventories |
|
|
(478,874 |
) |
|
|
(203,786 |
) |
Prepaid and other assets |
|
|
35,960 |
|
|
|
225,344 |
|
Accounts payable |
|
|
2,682,513 |
|
|
|
3,000,200 |
|
Accrued and other liabilities |
|
|
3,455,675 |
|
|
|
1,467,015 |
|
Postretirement benefits liability |
|
|
1,437,750 |
|
|
|
1,386,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
8,395,163 |
|
|
|
5,460,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(4,909,705 |
) |
|
|
(1,341,566 |
) |
Proceeds from maturities of mortgage-backed security investment |
|
|
|
|
|
|
88,239 |
|
Proceeds from sale of property and equipment |
|
|
5,200 |
|
|
|
65,000 |
|
Acquisition of Cincinnati Fiberglass, Inc. |
|
|
|
|
|
|
(688,077 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(4,904,505 |
) |
|
|
(1,876,404 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
101,447 |
|
|
|
731,158 |
|
Payments of principal on secured note payable |
|
|
(964,287 |
) |
|
|
(964,285 |
) |
Payments of principal on industrial revenue bond |
|
|
(365,000 |
) |
|
|
(335,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(1,227,840 |
) |
|
|
(568,127 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
2,262,818 |
|
|
|
3,016,122 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
9,413,994 |
|
|
|
5,358,246 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
11,676,812 |
|
|
$ |
8,374,368 |
|
|
|
|
|
|
|
|
Cash paid for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
4,975 |
|
|
$ |
399,143 |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
3,224,133 |
|
|
$ |
484,918 |
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
5
Core Molding Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed 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 condensed 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,
2006, and the results of their operations and cash flows for the nine months ended September 30,
2006. The Consolidated Notes to Financial Statements, which are contained in the 2005 Annual
Report to Shareholders, should be read in conjunction with these condensed 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, which was
acquired in August 2005 (see Note 6), produces reinforced plastic products by a robotic spray-up
open mold process and multiple insert tooling (MIT) closed mold process. The Matamoros facility
utilizes spray-up and hand lay-up open mold processes and resin transfer (RTM) closed mold
process to produce reinforced plastic products. Core Molding Technologies also sells reinforced
plastic products in the automotive-aftermarket industry as a result of its September 2004
acquisition of certain assets of Keystone Restyling Products, Inc.
2. Earnings Per Common Share
Basic
earnings per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed similarly
but includes the effect of the assumed exercise of dilutive stock options under the treasury
stock method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
Net income |
|
$ |
2,937,775 |
|
|
$ |
1,511,180 |
|
|
$ |
7,722,709 |
|
|
$ |
5,201,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding
(basic) |
|
|
10,083,320 |
|
|
|
9,990,053 |
|
|
|
10,067,409 |
|
|
|
9,876,455 |
|
Plus: dilutive options assumed
exercised of stock options |
|
|
925,450 |
|
|
|
997,270 |
|
|
|
925,450 |
|
|
|
997,270 |
|
Less: shares assumed repurchased
with proceeds from exercise of
stock options |
|
|
(581,281 |
) |
|
|
(409,027 |
) |
|
|
(571,395 |
) |
|
|
(485,599 |
) |
Plus: dilutive effect of
nonvested restricted stock
grants |
|
|
1,094 |
|
|
|
|
|
|
|
1,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and
potentially issuable common
shares outstanding (diluted) |
|
|
10,428,583 |
|
|
|
10,578,296 |
|
|
|
10,422,526 |
|
|
|
10,388,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
0.29 |
|
|
$ |
0.15 |
|
|
$ |
0.77 |
|
|
$ |
0.53 |
|
Diluted earnings per common share |
|
$ |
0.28 |
|
|
$ |
0.14 |
|
|
$ |
0.74 |
|
|
$ |
0.50 |
|
6
For the three and nine months ended September 30, 2006, there were 55,500 antidilutive options.
For the three and nine months ended September 30, 2005 there were no antidilutive options.
3. Sales Revenue
Core Molding Technologies currently has three major customers, International Truck & Engine
Corporation (International), PACCAR, Inc. (PACCAR), and Freightliner, LLC (Freightliner).
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, 2006 and September 30, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
International |
|
$ |
27,861,360 |
|
|
$ |
15,160,355 |
|
|
$ |
64,177,999 |
|
|
$ |
51,140,598 |
|
PACCAR |
|
|
9,748,077 |
|
|
|
5,704,260 |
|
|
|
27,038,195 |
|
|
|
8,494,156 |
|
Freightliner |
|
|
4,690,257 |
|
|
|
4,285,745 |
|
|
|
12,851,849 |
|
|
|
13,465,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
42,299,694 |
|
|
|
25,150,360 |
|
|
|
104,068,043 |
|
|
|
73,100,243 |
|
Other |
|
|
5,778,465 |
|
|
|
6,463,611 |
|
|
|
20,023,087 |
|
|
|
24,689,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
48,078,159 |
|
|
$ |
31,613,971 |
|
|
$ |
124,091,130 |
|
|
$ |
97,789,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Comprehensive Income
Comprehensive income represents net income plus the results of certain equity changes not
reflected in the Statements of Income. The components of comprehensive income, net of tax, are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
Net income |
|
$ |
2,937,775 |
|
|
$ |
1,511,180 |
|
|
$ |
7,722,709 |
|
|
$ |
5,201,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge accounting
effect of interest
rate swaps, net of
deferred income tax
benefit of $42,622
and deferred tax
expense of $21,018
for the three and
nine months ended
September 30, 2006
respectively; and
deferred income tax
expense of $61,450
and $100,811 for
the three and nine
months ending
September 30, 2005,
respectively. |
|
|
(82,098 |
) |
|
|
119,286 |
|
|
|
41,440 |
|
|
|
203,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
2,855,677 |
|
|
$ |
1,630,466 |
|
|
$ |
7,764,149 |
|
|
$ |
5,405,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
5. Postretirement Benefits
The components of expense for all of Core Molding Technologies postretirement benefits plans
for the three and nine months ended September 30, 2006 and 2005 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
Pension Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution plan
Contributions |
|
$ |
130,000 |
|
|
$ |
170,000 |
|
|
$ |
384,000 |
|
|
$ |
348,000 |
|
Multi-employer plan
Contributions |
|
|
95,000 |
|
|
|
43,000 |
|
|
|
305,000 |
|
|
|
294,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total pension expense |
|
|
225,000 |
|
|
|
213,000 |
|
|
|
689,000 |
|
|
|
642,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Life Insurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
|
25,000 |
|
|
|
225,000 |
|
|
|
566,000 |
|
|
|
676,000 |
|
Interest cost |
|
|
205,000 |
|
|
|
183,000 |
|
|
|
647,000 |
|
|
|
552,000 |
|
Amortization of net loss |
|
|
82,000 |
|
|
|
41,000 |
|
|
|
225,000 |
|
|
|
159,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
|
312,000 |
|
|
|
449,000 |
|
|
|
1,438,000 |
|
|
|
1,387,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total postretirement
benefits
expense |
|
$ |
537,000 |
|
|
$ |
662,000 |
|
|
$ |
2,127,000 |
|
|
$ |
2,029,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Molding Technologies has made contributions of approximately $777,000 to pension plans
through September 30, 2006 and expects to make approximately $105,000 of postretirement benefit
payments through the remainder of 2006.
6. Acquisitions
On August 3, 2005 Core Molding Technologies, Inc. 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, for $688,077. Core Molding Technologies has continued operation of the Batavia
facility. As part of the acquisition, Core Molding Technologies agreed to lease the manufacturing
facility from the previous owner of Diversified Glass, Inc.
The acquisition was recorded using the purchase method of accounting. Accordingly, the
purchase price was allocated to the assets acquired and liabilities assumed based on the estimated
fair values at the date of acquisition.
The following table presents the allocation of the purchase price:
|
|
|
|
|
Inventory |
|
$ |
668,862 |
|
Property and equipment |
|
|
95,000 |
|
Non-compete |
|
|
5,000 |
|
Tooling accounts receivable |
|
|
36,265 |
|
|
|
|
|
Total assets purchased |
|
|
805,127 |
|
|
|
|
|
|
Accrued vacation assumed |
|
|
(117,050 |
) |
|
|
|
|
|
|
|
|
|
Net purchase price |
|
$ |
688,077 |
|
|
|
|
|
8
The following table reflects the unaudited consolidated results of operations on a pro forma
basis had the Cincinnati Fiberglass Division of Diversified Glass, Inc. been included in operating
results from January 1, 2005. There are no material non-recurring items in the pro forma results
of operations.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2005 |
|
|
September 30, 2005 |
|
Net Sales (pro forma) |
|
$ |
33,446,153 |
|
|
$ |
111,913,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (pro forma) |
|
$ |
1,405,123 |
|
|
$ |
5,880,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (pro
forma) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.14 |
|
|
$ |
0.60 |
|
Diluted |
|
$ |
0.13 |
|
|
$ |
0.57 |
|
The pro forma information is presented for informational purposes only and is not necessarily
indicative of the results of operations that actually would have been achieved had the acquisition
been consummated as of that time, nor is it intended to be a projection of future results. The
effects of the acquisition have been included in the consolidated statement of operations since the
acquisition date.
7. Interest Rate Swaps
In
conjunction with its variable rate Industrial Revenue Bond
(IRB) the Company 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 bank 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 Industrial Revenue Bond. In all periods presented this cash
flow hedge was highly effective; any ineffectiveness was not material. None of the changes in the
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 bank note payable. Under this agreement, the Company pays a
fixed rate of 5.75% to the bank and receives LIBOR plus 200 basis points. The swap term and
notional amount match the payment schedule on the secured 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. 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.
8. Stock based Compensation
Core Molding Technologies has a Long Term Equity Incentive Plan (the 2006 Plan), as approved
by the shareholders in May 2006. This 2006 Plan replaced the Long Term Equity Incentive Plan (the
Original Plan) as originally approved by the shareholders 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.
9
The options that may be granted under the 2006 Plan have vesting schedules of five or nine and
one-half years from the date of grant, are not exercisable after ten years from the date of grant,
and would be granted at prices which equal or exceed the fair market value of Core Molding
Technologies common stock at the date of grant. Restricted stock granted under the 2006 Plan
require certain common stock ownership vesting thresholds to be met and vest over three years or
upon the date of the participants sixty-fifth birthday.
Effective January 1, 2006, Core Molding Technologies adopted the provisions of Statement of
Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS No.123R)
requiring that compensation cost relating to share-based payment transactions be recognized in the
financial statements. The cost is measured at the grant date, based on the calculated fair value of
the award, and is recognized as an expense over the employees requisite service period (generally
the vesting period of the equity award). Prior to January 1, 2006, Core Molding Technologies
accounted for share-based compensation to employees in accordance with Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25), and related
interpretations. Core Molding Technologies also followed the disclosure requirements of Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by
Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure. Core Molding Technologies adopted SFAS No. 123R using the
modified prospective method and, accordingly, financial statement amounts for prior periods
presented in this Form 10-Q have not been restated to reflect the fair value method of recognizing
compensation cost relating to non-qualified stock options. Under this method, the provisions of
SFAS 123(R) apply to all awards granted or modified after the date of adoption. In addition,
compensation expense must be recognized for any unvested stock option awards outstanding as of the
date of adoption on a straight-line basis over the remaining vesting period.
Under APB No. 25 there was no compensation cost recognized for our non-qualified stock options
awarded in the three and nine months ended September 30, 2005 as these non-qualified stock options
had an exercise price equal to the market value of the underlying stock at the grant date. The
following table sets forth pro forma information as if compensation cost had been determined
consistent with the requirements of SFAS No. 123R.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2005 |
|
|
September 30, 2005 |
|
Net income, as reported |
|
$ |
1,511,180 |
|
|
$ |
5,201,918 |
|
Deduct: Total stock-based
employee compensation expense
determined under fair value
based method for all awards,
net of related tax effects |
|
|
34,822 |
|
|
|
189,461 |
|
|
|
|
|
|
|
|
Pro forma net income |
|
$ |
1,476,358 |
|
|
$ |
5,012,457 |
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic as reported |
|
$ |
0.15 |
|
|
$ |
0.53 |
|
Basic pro forma |
|
$ |
0.15 |
|
|
$ |
0.51 |
|
Diluted as reported |
|
$ |
0.14 |
|
|
$ |
0.50 |
|
Diluted pro forma |
|
$ |
0.14 |
|
|
$ |
0.48 |
|
Stock Options
There were no grants of options in the nine months ending September 30, 2006. The fair value
of each option award is estimated on the date of grant using the Black-Scholes option-pricing
model. Assumptions used in the model for the prior-year grants are described in our Annual Report
on Form 10-K for the year ended December 31, 2005. Total compensation cost related to incentive
stock options for the three and nine months ended September 30, 2006 was $63,686 and $194,332,
respectively. Compensation expense is allocated such that $43,598 is included in selling, general
and administrative expenses and $20,088 is recorded in cost of sales for the three months and such
that $149,048 is included in selling, general and administrative expenses and $45,284 is recorded
in cost of sales for the nine months ended September 30, 2006. There was no tax benefit recorded
for this compensation cost because the expense primarily relates to incentive stock options that do
not qualify for a tax deduction until, and only if, a disqualifying disposition occurs.
10
During the nine months ended September 30, 2006, Core Molding Technologies received
approximately $101,000 in cash from the exercise of stock options. The aggregate intrinsic value
of these options was approximately $84,000. Tax benefits received as a result of a disqualified
disposition were immaterial.
The following summarizes the activity relating to stock options under the Original Plan
mentioned above for the nine months ended September 30, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Number |
|
|
Weighted |
|
|
Remaining |
|
|
Aggregate |
|
|
|
of |
|
|
Average |
|
|
Contractual |
|
|
Intrinsic |
|
|
|
Shares |
|
|
Exercise Price |
|
|
Term |
|
|
Value |
|
Outstanding at December 31, 2005 |
|
|
1,032,700 |
|
|
$ |
3.33 |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
(32,750 |
) |
|
|
3.10 |
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited |
|
|
(19,000 |
) |
|
|
4.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2006 |
|
|
980,950 |
|
|
$ |
3.32 |
|
|
|
7.45 |
|
|
$ |
3,509,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at September 30, 2006 |
|
|
556,011 |
|
|
$ |
3.18 |
|
|
|
7.12 |
|
|
$ |
2,069,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following summarizes the status of, and changes to, unvested options during the nine
months ended September 30, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
Number |
|
|
Average |
|
|
|
Of |
|
|
Grant Date |
|
|
|
Shares |
|
|
Fair Value |
|
Unvested at December 31, 2005 |
|
|
518,072 |
|
|
$ |
3.49 |
|
Granted |
|
|
|
|
|
|
|
|
Vested |
|
|
(74,133 |
) |
|
|
3.17 |
|
Forfeited |
|
|
(19,000 |
) |
|
|
4.24 |
|
|
|
|
|
|
|
|
Unvested at September 30, 2006 |
|
|
424,939 |
|
|
$ |
3.51 |
|
|
|
|
|
|
|
|
At September 30, 2006, there was $745,000 of total unrecognized compensation cost, related to
unvested stock options granted under the Original Plan.
Restricted Stock
In May of 2006, Core Molding Technologies began awarding shares of its common stock to certain
directors, officers, and key executive employees in the form of unvested stock (Restricted
Stock). These awards will be 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 the Restricted Stock as of September 30, 2006 and
changes during the nine months ended September 30, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
Number |
|
|
Average |
|
|
|
Of |
|
|
Grant Date |
|
|
|
Shares |
|
|
Fair Value |
|
Unvested balance at December 31, 2005 |
|
|
|
|
|
$ |
|
|
Granted |
|
|
36,305 |
|
|
|
6.70 |
|
Vested |
|
|
(10,870 |
) |
|
|
6.70 |
|
Forfeited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested at September 30, 2006 |
|
|
25,435 |
|
|
$ |
6.70 |
|
|
|
|
|
|
|
|
As of September 30, 2006, there was $137,000 of total unrecognized compensation cost related
to Restricted Stock granted under the 2006 Plan. That cost is expected to be recognized over the
weighted-average period of 2.73 years. The total fair value of shares that vested during the nine
months ended September 30, 2006 was $89,931 and was recorded as selling, general, and
administrative compensation expense.
11
9. Subsequent Event
On November 8 2006, Core Molding Technologies announced that it had signed a Letter of Intent
to acquire Premix Holding Company. The acquisition is
anticipated to close in early 2007, subject to certain conditions, including satisfactory
completion of due diligence and entering into a definitive acquisition agreement.
10. Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R),
Share-Based Payment. SFAS 123(R) is a revision of FASB Statement 123, Accounting for Stock-Based
Compensation and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its
related implementation guidance. The statement focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R)
requires a public entity to measure the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award. That cost is to be
recognized over the period during which an employee is required to provide service in exchange for
the award. The Company has adopted SFAS No. 123R on January 1, 2006 using the modified prospective
method. The impact of adopting this standard is discussed in Note 8.
In
July 2006, the FASB issued Interpretation No. 48 (FIN
48), Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the
financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN
48 provides guidance on the financial statement recognition and measurement of a tax position
taken, or expected to be taken, in a tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosures, and transition.
This interpretation is effective for fiscal years beginning after December 15, 2006. Core Molding
Technologies is currently evaluating the impact of this standard on the Consolidated Financial
Statements.
In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements. SFAS No. 157
defines fair value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not
require any new fair value measurements, rather it applies under existing accounting pronouncements
that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS No. 157
on the consolidated financial statements.
Also
in September 2006, the FASB issued FAS No. 158, Employers Accounting for Defined
Benefits Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106,
and 132(R) (FAS 158). FAS 158 requires an employer to recognize the funded status of defined
benefit pension and other postretirement benefit plans as an asset or liability. This
interpretation is effective for fiscal years ending after December 15, 2006 and requires certain
additional disclosures. Core Molding Technologies is currently evaluating the impact of this
standard on the Consolidated Financial Statements.
12
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 operations and business
environment of Core Molding Technologies, Inc. and its subsidiaries
(Core Molding Technologies or the Company) 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 quarterly report: business conditions in the plastics,
transportation, watercraft and commercial product industries; general economic conditions in the
markets in which Core Molding Technologies operates; dependence upon three significant customers as
the primary source of Core Molding Technologies sales revenues; recent efforts of Core Molding
Technologies to expand its customer base; failure of Core Molding Technologies suppliers to
perform their contractual obligations; the availability of raw materials; inflationary pressures;
new technologies; competitive and regulatory matters; labor relations; the loss or inability of
Core Molding Technologies to attract key personnel; 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; 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 2005 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. 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 International Truck and Engine Corporation's
(International)
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 in
Matamoros, Mexico. 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
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.
Core Molding Technologies recorded net income for the third quarter of 2006 of $2,938,000, or
$.29 per basic and $.28 per diluted share, compared with $1,511,000, or $.15 per basic and $.14 per
diluted share, in the third quarter of 2005. For the first nine months of 2006, net income was
$7,723,000, or $.77 per basic and $.74 per diluted share, compared with $5,202,000, or $.53 per
basic and $.50 per diluted share, in the same period of 2005.
13
Net income
is being positively impacted
by increased sales volumes due to the positive impact general economic conditions have had on the
demand for medium and heavy-duty trucks, the addition of the Batavia, Ohio facility and better
absorption of fixed costs. Current industry forecasts predict that stricter federal emission
standards for 2007 are expected to increase demand throughout 2006 from heavy and medium-duty truck
customers, although demand resulting from such federal emission
standards is expected to decline in 2007 with industry analysts
estimating a twenty
to forty percent decrease in new orders for heavy and medium-duty trucks for some part of 2007.
Core Molding Technologies expects several new and important product launches with existing
customers that will go online next year to partially offset this anticipated decline in demand.
The Company has also announced a letter of intent to purchase Premix Holding Company on November 8,
2006, to further mitigate the cyclical impact of the heavy and
medium-duty truck industry. This acquisition is anticipated to close
in early 2007, subject to certain conditions, including satisfactory
completion of due diligence and entering into a definitive purchase
agreement.
Results of Operations
Three Months Ended September 30, 2006, As Compared To Three Months Ended September 30, 2005
Net sales for the three months ended September 30, 2006, totaled $48,078,000, representing an
approximate 52.1% increase from the $31,614,000 reported for the three months ended September 30,
2005. Included in total sales are tooling project revenues of $9,224,000 and $569,000 for the three
months ended September 30, 2006 and September 30, 2005, respectively. Tooling project revenues
are sporadic in nature and do not represent a recurring trend. Total product sales, excluding
tooling project revenue, were higher by approximately 25.2% for the three months ended September
30, 2006, as compared to the same period a year ago. The primary reasons for the increase in sales
is the positive impact general economic conditions have had on the demand for medium and heavy-duty
trucks, as well as the impact of the addition of the Batavia, Ohio facility which was acquired on
August 1, 2005. Sales to International totaled $27,861,000 for the three months ended September 30,
2006, an approximate 83.8% increase from the three months ended September 30, 2005 amount of
$15,160,000. The primary reason for the increase in sales to International was due to $8,834,000
of tooling sales resulting from new program launches as well as the positive impact general
economic conditions have had, as referenced above. Sales to PACCAR totaled $9,748,000 for the
three months ended September 30, 2006, an approximate 70.9% increase from the three months ended
September 30, 2005 amount of $5,704,000. The primary reason for the increase in sales to PACCAR is
due to the addition of the Batavia, Ohio facility on August 1, 2005, as well as the positive impact
general economic conditions have had, as referenced above. Sales to Freightliner totaled
$4,690,000 for the three months ended September 30, 2006, which was an increase of approximately
9.4% from the $4,286,000 for September 30, 2005. The primary reason for the increase in sales to
Freightliner is due to the positive impact general economic conditions have had, as referenced
above.
Sales to other customers for the three months ended September 30, 2006, decreased
approximately 10.6% to $5,778,000 from $6,464,000 for the three months ended September 30, 2005.
The decrease in sales was primarily due to the decrease in sales to Yamaha due to their decision
during the third quarter of 2005 to diversify their supplier base, as previously
disclosed.
Gross margin was approximately 17.2% of sales for the three months ended September 30, 2006,
compared with 17.4% for the three months ended September 30, 2005. The primary reason for this
decrease was due to the dilutive effect tooling sales had on gross margin, offset by favorable
operating efficiencies and fixed cost absorption.
Selling, general and administrative expenses (SG&A) totaled $3,746,000 for the three months
ended September 30, 2006, increasing from $3,000,000 for the three months ended September 30, 2005.
The primary reason for this difference was due to increases in certain employee benefit
expenses.
Net interest income totaled $35,000 for the three months ended September 30, 2006, compared
with net interest expense of $118,000 for the three months ended September 30, 2005. The increase
in interest income is primarily related to an increase in cash balances and the increase in
interest rate earned on these cash balances. Variable interest rates experienced by Core Molding
Technologies with respect to its two long-term borrowing facilities have increased; however, due to
the interest rate swaps Core Molding Technologies entered into, the interest rate is essentially
fixed for these two debt instruments.
Income taxes for the three months ended September 30, 2006 and 2005, are estimated to be
approximately 36% of total earnings before taxes or $1,645,000, and $858,000, respectively.
Net income for the three months ended September 30, 2006, was $2,938,000, or $.29 per basic
and $.28 per diluted share, representing an increase of $1,427,000 over the net income for the
three months ended September 30, 2005, of $1,511,000, or $.15
per basic and $.14 per diluted share.
14
Nine Months Ended September 30, 2006, As Compared To Nine Months Ended September 30, 2005
Net
sales for the nine months ended September 30, 2006, totaled $124,091,000, representing an
approximate 26.9% increase from the $97,790,000 reported for the nine months ended September 30,
2005. Revenue from tooling projects totaled $11,456,000 for the nine months ended September 30,
2006. Tooling project revenues for the nine months ended September 30, 2005, totaled $4,528,000.
Tooling project revenues are sporadic in nature and do not represent a recurring trend. Total
product sales, excluding tooling project revenue, were higher by approximately 20.8% for the nine
months ended September 30, 2006, as compared to September 30, 2005. The primary reason for this
increase was due to the addition of the Batavia, Ohio facility in August of 2005, as well as the
positive impact general economic conditions have had on the demand for medium and heavy-duty
trucks. Sales to International for the nine months ended September 30, 2006 were $64,178,000, an
approximate 25.5% increase as compared to the nine months ended September 30, 2005 of $51,141,000.
The primary reasons for the increase in sales to International were due to the positive impact
general economic conditions have had, as referenced above, as well as the recognition of tooling
revenue. Sales to PACCAR totaled $27,038,000 for the nine months ended September 30, 2006, a
significant increase from the $8,494,000 for the same time a year ago. The primary reason for the
increase in sales to PACCAR is due to the addition of the Batavia, Ohio facility in August of 2005,
as well as the positive impact general economic conditions have had, as referenced above. Sales to
Freightliner totaled $12,852,000 for the nine months ended September 30, 2006, which was a decrease
of approximately 4.6% from the $13,465,000 for September 30, 2005. The primary reason for this
decrease was due to reduced order volumes.
Sales to other customers for the nine months ended September 30, 2006, decreased approximately
18.9% to $20,023,000 from $24,690,000 for the nine months ended September 30, 2005. The decrease
in sales was primarily due to the decrease in sales to Yamaha due to their decision during the
third quarter of 2005 to diversify their supplier base, as previously disclosed.
Gross margin was approximately 18.5% of sales for the nine months ended September 30, 2006,
compared with 19.1% for the nine months ended September 30, 2005. The decrease in gross margin, as
a percentage of sales from the prior year, was primarily due to the dilutive effect of tooling
sales on gross margin.
Selling, general and administrative expenses (SG&A) totaled $10,823,000 for the nine months
ended September 30, 2006, increasing from $9,588,000 for the nine months ended September 30, 2005.
The primary reasons for the increase in SG&A expenses were due to approximately $570,000 from the addition
of the Batavia, Ohio facility, as well as increases in certain employee benefits.
Net interest expense totaled $31,000 for the nine months ended September 30, 2006, decreasing
from $454,000 for the nine months ended September 30, 2005. The decrease is primarily due to
interest income of $466,000 for the nine months ended September 30, 2006 compared to $123,000 for
the same time period a year ago, as well as regularly scheduled principal payments made in 2006.
The increase in interest income is primarily related to an increase in cash balances and the
increase in interest rate earned on these cash balances. Variable interest rates experienced by
Core Molding Technologies with respect to its long-term borrowing facilities have increased;
however, due to the interest rate swaps Core Molding Technologies entered into, the interest rate
is essentially fixed for these two debt instruments.
Income taxes for the nine months ended September 30, 2006, are estimated to be approximately
36% of total earnings before income taxes or 4,392,000. In the nine months ended September 30,
2005 income taxes were estimated to be 39% of total earnings before income taxes. The difference
between the effective tax rate and the statutory tax rate for the nine months ended September 30,
2005 is due primarily to expensing previously recorded deferred tax assets that Core Molding
Technologies would not be able to realize as a result of a change in
Ohio state corporate tax
legislation enacted on June 30, 2005.
Net income for the nine months ended September 30, 2006, was $7,723,000, or $.77 per basic and
$.74 per diluted share, representing an increase of $2,521,000 over the net income for the nine
months ended September 30, 2005, of $5,202,000, or $.53 per basic and $.50 per diluted share.
Liquidity and Capital Resources
Core Molding Technologies primary sources of funds have been cash generated from operating
activities and borrowings from third parties. Primary cash requirements are for operating
expenses, capital expenditures and acquisitions.
15
Cash provided by operating activities before changes in working capital for the nine months
ended September 30, 2006 totaled $11,101,000. Changes in working capital decreased cash provided by
operating activities by $2,706,000 to $8,395,000. Net income contributed $7,723,000 to operating
cash flows. Non-cash deductions of depreciation and amortization contributed $2,021,000 to
operating cash flow. In addition, the increase in the postretirement healthcare benefits liability
of $1,438,000 is not a current cash obligation, and this item will not be a cash obligation until
retirees begin to utilize their retirement medical benefits. Changes in working capital primarily
relate to an increase in accounts receivable, which is primarily related to increased sales
volumes, and increases in accounts payable and accrued and other liabilities due to payment timing
differences.
Cash used for investing activities was $4,905,000 for the nine months ended September 30,
2006. Capital expenditures totaled $4,910,000, which was primarily related to the acquisition of
machinery and equipment and the expansion of the Columbus, Ohio manufacturing facility. Core
Molding Technologies anticipates spending an additional $1,337,000 for the remainder of the year
for capital projects and $2,880,000 for the early buyout of leases of capital equipment, which will
be funded by cash from operations.
Cash
used for financing activities was $1,228,000 for the nine months
ended September 30, 2006. Core Molding Technologies made principal
repayments on the bank note payable of $964,000 and regularly scheduled payments on the Industrial
Revenue Bond of $365,000. Partially offsetting these payments were proceeds of $101,000 from the
issuance of common stock related to the exercise of 32,750 stock options.
At September 30, 2006, Core Molding Technologies had cash on hand of $11,677,000 and an
available line of credit of $7,500,000, which is scheduled to mature on April 30, 2007 (Line of
Credit). At September 30, 2006, Core Molding Technologies had no outstanding borrowing on the
Line of Credit. As of September 30, 2006, Core Molding Technologies was in compliance with its
financial debt covenants for the Line of Credit and letter of credit securing the Industrial
Revenue Bond and certain equipment leases. These covenants relate to maintaining certain financial
ratios. Management expects Core Molding Technologies to meet these covenants for the year 2006.
However, if a material adverse change in the financial position of Core Molding Technologies should
occur, Core Molding Technologies liquidity and ability to obtain further financing to fund future
operating and capital requirements could be negatively impacted.
Recently Issued and Adopted Accounting Standards
In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R),
Share-Based Payment. SFAS 123(R) is a revision of FASB Statement 123, Accounting for Stock-Based
Compensation and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its
related implementation guidance. The statement focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R)
requires a public entity to measure the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award. That cost is to be
recognized over the period during which an employee is required to provide service in exchange for
the award. The Company has adopted SFAS No. 123R on January 1, 2006 using the modified prospective
method. The impact of adopting this standard is discussed in Note 8.
In
July 2006, the FASB issued Interpretation No. 48 (FIN
48), Accounting for Uncertainty in
Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the
financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN
48 provides guidance on the financial statement recognition and measurement of a tax position
taken, or expected to be taken, in a tax return.
FIN 48 also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosures, and transition. This interpretation is effective for
fiscal years beginning after December 15, 2006. Core Molding Technologies is currently evaluating
the impact of this standard on the Consolidated Financial Statements.
In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements. SFAS No. 157
defines fair value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not
require any new fair value measurements, rather it applies under existing accounting pronouncements
that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS No. 157
on the consolidated financial statements.
16
Also
in September 2006, the FASB issued FAS No. 158, Employers Accounting for Defined
Benefits Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106,
and 132(R) (FAS 158). FAS 158 requires an employer to recognize the funded status of defined
benefit pension and other postretirement benefit plans as an asset or liability. This
interpretation is effective for fiscal years ending after December 15, 2006 and requires certain
additional disclosures. Core Molding Technologies is currently evaluating the impact of this
standard on the Consolidated Financial Statements.
Critical Accounting Policies and Estimates
This Managements Discussion and Analysis of Financial Condition and Results of Operations
discusses Core Molding Technologies condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the United States. The
preparation of these condensed 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 Core Molding
Technologies customers were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required. Core Molding Technologies recorded an allowance
for doubtful accounts of $318,000 at September 30, 2006, and $214,000 at December 31, 2005.
Management also records estimates for customer returns, discounts offered to customers, and for
price adjustments. Additional allowances may be required should customer returns, discounts and
price adjustments fluctuate from the estimated amounts. Core Molding Technologies has reduced
accounts receivable for chargebacks of $1,294,000 at September 30, 2006, and $807,000 at December
31, 2005.
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:
Long-lived assets consist primarily of property and equipment, goodwill, and a customer list.
The recoverability of long-lived assets is evaluated by an analysis of operating results and
consideration of other significant events or changes in the business environment. The Company
evaluates whether impairment exists for
property and equipment and the customer list on the basis of undiscounted expected future cash
flows from operations before interest. For goodwill, the Company evaluates annually on December
31st whether impairment exists on the basis of estimated fair value of the associated
reporting unit. If impairment exists, the carrying amount of the long-lived assets is reduced to
its estimated fair value, less any costs associated with the final settlement. Core Molding
Technologies has not recorded any impairment to goodwill or long-lived assets for the nine months
ended September 30, 2006 or the year ended December 31, 2005.
Self-Insurance:
The Company is self-insured with respect to most of its Columbus, Ohio and Gaffney, South
Carolina medical and dental claims and Columbus, 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, 2006 and
December 31, 2005 of $1,045,000 and $1,002,000, respectively.
17
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 11 of the Consolidated
Notes to Financial Statements, which are contained in the 2005 Annual Report to Shareholders. Core
Molding Technologies recorded a liability for post retirement healthcare benefits based on
actuarially computed estimates of $11,204,000 at September 30, 2006, and $9,767,000 at December 31,
2005.
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, 2006 the Company has recorded a net liability related to
tooling in progress of $1,256,000, which represents approximately $14,086,000 of progress tooling
billings and $12,830,000 of progress tooling expenses. At December 31, 2005 the Company has
recorded a net liability related to tooling in progress of $1,148,000, which represents
approximately $11,164,000 of progress tooling billings and $10,016,000 of progress tooling
expenses.
Income taxes:
The Condensed Consolidated Balance Sheet at September 30, 2006 and December 31, 2005, includes
a deferred tax asset of $8,358,000 and $8,373,000, respectively. Core Molding Technologies
performs analyses to evaluate the amount 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.
18
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 Revenue Bond with a variable interest rate. The Company has an interest rate
swap to fix the interest rate at 4.89%; (2) revolving line of credit, which bears a variable
interest rate; (3) bank note payable with a variable interest rate. The Company entered into a
swap agreement effective January 1, 2004, to fix the interest rate at 5.75%; (4) foreign currency
purchases in which Core Molding Technologies purchases Mexican pesos with United States dollars to
meet certain obligations that arise due to the facility located in Mexico; and (5) raw material
purchases in which Core Molding Technologies purchases various resins for use in production. The
prices of these resins 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 affect on operating
margins.
Assuming a hypothetical 10% change in short-term interest rates in both the nine month periods
ended September 30, 2006, and 2005, interest expense would not change significantly, as the
interest rate swap agreement would generally offset the impact.
19
Part I Financial Information
Item 4
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 were accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosures, 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 reasonable likely to materially affect, our internal control over financial
reporting.
20
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 2005 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
No submission of matters to a vote of security holders occurred during the three
months ended September 30, 2006.
Item 5. Other Information
None
Item 6. Exhibits
See Index to Exhibits
21
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.
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CORE MOLDING TECHNOLOGIES, INC. |
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Date: November 14, 2006
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By:
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/s/ James L. Simonton
James L. Simonton
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President, Chief Executive Officer and
Director |
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Date: November 14, 2006
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By:
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/s/ Herman F. Dick, Jr.
Herman F. Dick, Jr.
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Treasurer and Chief Financial Officer |
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22
INDEX TO EXHIBITS
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Exhibit No. |
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Description |
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Location |
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2(a)(1)
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Asset Purchase Agreement
Dated as of September 12, 1996,
As amended October 31, 1996,
between Navistar International Transportation
Corporation and RYMAC Mortgage Investment
Corporation1
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Incorporated by
reference to
Exhibit 2-A to
Registration
Statement on Form
S-4 (Registration
No. 333-15809) |
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2(a)(2)
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Second Amendment to Asset Purchase
Agreement dated December 16, 19961
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Incorporated by
reference to
Exhibit 2(a)(2) to
Annual Report on
Form 10-K for the
year-ended December
31, 2001 |
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2(b)(1)
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Agreement and Plan of Merger dated as of
November 1, 1996, between Core Molding
Technologies, Inc. and RYMAC Mortgage
Investment Corporation
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Incorporated by
reference to
Exhibit 2-B to
Registration
Statement on Form
S-4 (Registration
No. 333-15809) |
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2(b)(2)
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First Amendment to Agreement and Plan
of Merger dated as of December 27, 1996
Between Core Molding Technologies, Inc. and
RYMAC Mortgage Investment Corporation
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Incorporated by
reference to
Exhibit 2(b)(2) to
Annual Report on
Form 10-K for the
year ended December
31, 2002 |
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2(c)(1)
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Asset Purchase Agreement dated as of October
10, 2001, between Core Molding Technologies,
Inc. and Airshield Corporation
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Incorporated by
reference to
Exhibit 1 to Form
8-K filed October
31, 2001 |
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3(a)(1)
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Certificate of Incorporation of
Core Molding Technologies, Inc.
as filed with the Secretary of State
of Delaware on October 8, 1996
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Incorporated by
reference to
Exhibit 4(a) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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3(a)(2)
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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
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Incorporated by
reference to
Exhibit 4(b) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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3(a)(3)
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Certificate of Incorporation of Core
Molding Technologies, Inc., reflecting
Amendments through November 6,
1996 [for purposes of compliance
with Securities and Exchange
Commission filing requirements only]
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Incorporated by
reference to
Exhibit 4(c) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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3(a)(4)
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Certificate of Amendment of Certificate of
Incorporation as filed with the Secretary of
State of Delaware on August 28, 2002
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Incorporated by
reference to
Exhibit 3(a)(4) to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2002 |
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Exhibit No. |
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Description |
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Location |
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3(b)
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By-Laws of Core Molding Technologies, Inc.
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Incorporated by
reference to
Exhibit 3-C to
Registration
Statement on Form
S-4 (Registration
No. 333-15809) |
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4(a)(1)
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Certificate of Incorporation of Core Molding
Technologies, Inc. as filed with the
Secretary of State of Delaware on October 8,
1996
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Incorporated by
reference to
Exhibit 4(a) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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4(a)(2)
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Certificate of Amendment of Certificate
of Incorporation of Core Materials
Corporation as filed with the Secretary of
State of Delaware on November 6, 1996
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Incorporated by
reference to
Exhibit 4(b) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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4(a)(3)
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Certificate of Incorporation of Core Materials
Corporation, reflecting amendments through
November 6, 1996 [for purposes of compliance
with Securities and Exchange Commission
filing requirements only]
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Incorporated by
reference to
Exhibit 4(c) to
Registration
Statement on Form
S-8 (Registration
No. 333-29203) |
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4(a)(4)
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Certificate of Amendment of Certificate of
Incorporation as filed with the Secretary of
State of Delaware on August 28, 2002
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Incorporated by
reference to
Exhibit 3(a)(4) to
Quarterly Report on
Form 10-Q for the
quarter ended
September 30, 2002 |
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4(b)
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By-Laws of Core Molding Technologies, Inc.
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Incorporated by
reference to
Exhibit 3-C to
Registration
Statement on Form
S-4 (Registration
No. 333-15809) |
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Exhibit No. |
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Description |
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Location |
11
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Computation of Net Income per Share
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Exhibit 11 omitted
because the required
information is
Included in Notes to
Financial Statement |
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31(a)
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Section 302 Certification by James
L. Simonton, President and Chief
Executive Officer
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Filed Herein |
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31(b)
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Section 302 Certification by Herman
F. Dick, Jr., Treasurer and Chief
Financial Officer
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Filed Herein |
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32(a)
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Certification of James L. Simonton,
Chief Executive Officer of Core
Molding Technologies, Inc., dated
November 14, 2006, pursuant to 18
U.S.C. Section 1350
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Filed Herein |
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32(b)
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Certification of Herman F. Dick, Jr., Chief
Financial Officer of Core Molding Technologies,
Inc., dated November 14, 2006, pursuant to 18
U.S.C. Section 1350
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Filed Herein |
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1 |
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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. |
25