Edgar Filing: CORE MOLDING TECHNOLOGIES INC

Core Molding Technologies, Inc. 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-12505

CORE MOLDING TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware		31-1481870
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

800 Manor Park Drive, P.O. Box 28183, Columbus, Ohio		43228 - 0183
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (614) 870-5000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Stock, par value $.01		American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 the definitions of “large accelerated filer,” “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 þ (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates computed by reference to the closing price of the American Stock Exchange was $43,307,800 as of June 30, 2007, the last business day of registrant’s most recently completed second fiscal quarter. The number of shares of registrant’s Common Stock outstanding as of March 28, 2008 was 6,794,387.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s 2008 definitive Proxy Statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year are incorporated herein by reference in Part III of this Form 10-K.

CONTENTS


	Page
	No.
Defined Terms
Part I
Item 1. Business		3
Item 1A. Risk Factors		10
Item 1B. Unresolved Staff Comments		13
Item 2. Properties		14
Item 3. Legal Proceedings		15
Item 4. Submission of Matters to a Vote of Security Holders		15
Part II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities		16
Item 6. Selected Financial Data		17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		24
Item 8. Financial Statements and Supplementary Data		25
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		47
Item 9A(T). Controls and Procedures		47
Item 9B. Other Information		47
Part III
Item 10. Directors, Executive Officers, and Corporate Governance		48
Item 11. Executive Compensation		48
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		48
Item 13. Certain Relationships, Related Transactions, and Director Independence		48
Item 14. Principal Accounting Fees and Services		48
Part IV
Item 15. Exhibits and Financial Statement Schedules		49
Signatures		50
Exhibit Index
EX-10(I)
EX-23
EX-24
EX-31(A)
EX-31(B)
EX-32(A)
EX-32(B)

PART I

ITEM 1. BUSINESS

HISTORICAL DEVELOPMENT OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.

In 1996, RYMAC Mortgage Investment Corporation (“RYMAC”) incorporated Core Molding Technologies, Inc. (“Core Molding Technologies” or the “Company”), formerly known as Core Materials Corporation before changing its name on August 28, 2002, for the purpose of acquiring the Columbus Plastics unit of Navistar, Inc. (“Navistar”) formerly known as International Truck & Engine Corporation. On December 31, 1996, RYMAC merged with the Company with the result being that the Company was the surviving entity. Immediately after the merger, the Company acquired substantially all the assets and liabilities of the Columbus Plastics unit from Navistar in return for a secured note, which has been repaid, and 4,264,000 shares of newly issued common stock of the Company. On July 18, 2007, the Company entered into a stock repurchase agreement with Navistar, pursuant to which the Company repurchased 3,600,000 shares of the Company’s common stock, from Navistar. Navistar currently owns 664,000 shares (9.9%) of the outstanding stock of the Company.

In the first quarter of 1998, the Company opened a second compression molding plant located in Gaffney, South Carolina as part of the Company’s growth strategy to expand its customer base. This facility provided the Company with additional capacity and a strategic geographic location to serve both current and prospective customers.

In October 2001, the Company incorporated Core Composites Corporation as a wholly owned subsidiary under the laws of the State of Delaware. This entity was established for the purpose of holding and establishing operations for Airshield Corporation’s assets, which the Company acquired on October 16, 2001 (“the Airshield Asset Acquisition”) as part of the Company’s diversified growth strategy. Airshield Corporation was a privately held manufacturer and marketer of fiberglass reinforced plastic parts primarily for the truck and automotive aftermarket industries. The Company purchased substantially all the assets of Airshield Corporation through the United States Bankruptcy Court as Airshield Corporation had been operating under Chapter 11 bankruptcy protection since March 2001.

In conjunction with establishment of operations for the assets acquired from Airshield Corporation, the Company also incorporated two corporations and leased a facility in Mexico. In October 2001, the Company (5% owner) and Core Composites Corporation (95% owner) incorporated Composites Services de Mexico, S. de R.L. de C.V. (“Composites Services”) and Corecomposites de Mexico, S. de R.L. de C.V. (“Corecomposites”) in Matamoros, Mexico. Composites Services was established to be the employer of all Mexican national employees for the Company’s operations in Mexico. Corecomposites was organized to operate under a maquiladora program whereby substantially all product produced is exported back to Core Composites Corporation who sells such product to United States based external customers. In October 2005, Composites Services merged with Corecomposites resulting in one remaining legal entity, Corecomposites de Mexico, S. de R.L. de C.V.

In September 2004, the Company formed Core Automotive Technologies, LLC (“Core Automotive”), a Delaware limited liability company and wholly owned subsidiary of the Company. This entity was established for the purpose of holding and establishing operations for Keystone Restyling, Inc. assets, which the Company acquired on September 27, 2004 as part of the Company’s diversified growth strategy. Keystone Restyling, Inc. was a privately held manufacturer and marketer of fiberglass reinforced plastic parts primarily for the automotive and light truck aftermarket industries. The Company’s facility in Matamoros, Mexico provides manufacturing services for Core Automotive Technologies.

In August 2005, the Company formed Core Composites Cincinnati, LLC (“Core Composites Cincinnati”), a Delaware limited liability company and wholly owned subsidiary of the Company. This entity was established for the purpose of holding and establishing operations for the Cincinnati Fiberglass Division of Diversified Glass Inc. assets, which the Company acquired on August 1, 2005. The Cincinnati Fiberglass Division of Diversified Glass, Inc. was a privately held manufacturer and distributor of fiberglass reinforced plastic components supplied primarily to the heavy-duty truck market. As a result of this acquisition, the Company has leased a manufacturing facility in Batavia, Ohio.

DESCRIPTION OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.

Certain statements under this caption of this Annual Report on Form 10-K constitute 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; general economic conditions in the markets in which Core Molding Technologies operates; dependence upon two major 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 and retain 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; management’s 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 this Annual Report on Form 10-K.

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 of sheet molding compound (“SMC”) in a closed mold process. The Batavia facility produces reinforced plastic products by a spray-up open molding process and resin transfer molding (“RTM”) closed mold process utilizing multiple insert tooling (“MIT”). The Matamoros facility utilizes spray-up and hand lay-up open mold processes and resin transfer closed molding process utilizing vacuum infusion to produce reinforced plastic products.

Reinforced plastics compete largely against metals and have the strength to function well during prolonged use. Management believes that reinforced plastic components offer many advantages over metals, including:

	•		heat resistance

	•		corrosion resistance

	•		lighter weight

	•		lower cost

	•		greater flexibility in product design

	•		part consolidation for multiple piece assemblies

	•		lower initial tooling costs for lower volume applications

	•		high strength-to-weight ratio

	•		dent-resistance in comparison to steel or aluminum.

The largest markets for reinforced plastics are transportation (automotive and truck), construction, marine, and industrial applications. The Company currently has four manufacturing facilities producing reinforced plastic products. Our manufacturing facilities utilize various production processes; however, end products are similar and are not unique to a facility or customer base. Operating decision makers (officers of the Company) are headquartered in Columbus, Ohio and oversee all manufacturing operations for all products as well as oversee customer relationships with all customers. The Company’s two major customers are Navistar and PACCAR, Inc. (“PACCAR”), which are supplied reinforced plastic products for medium and heavy-duty trucks. The Company also supplies reinforced plastic products to other truck manufacturers, to automotive suppliers, to manufacturers of personal watercraft and other commercial products, and to wholesale distributors and other end users of automotive aftermarket products. In general, product growth and diversification are achieved in several different ways: (1) resourcing of existing reinforced plastic product from another supplier by an original equipment manufacturer (“OEM”); (2) obtaining new reinforced plastic products

through a selection process in which an OEM solicits bids; (3) successful marketing of reinforced plastic products for previously non-reinforced plastic applications; (4) successful marketing of reinforced plastic products for the automotive and light truck aftermarket, and (5) acquiring an existing business. The Company’s efforts are currently directed towards all five areas.

MAJOR COMPETITORS

The Company believes that it is one of the four largest compounders and molders of reinforced plastics using the SMC, spray-up, hand-lay-up, VRIM, and MIT molding processes in the United States. The Company faces competition from a number of other molders including, most significantly, Meridian Automotive Systems, Molded Fiber Glass Companies, Continental Structural Plastics/Budd Plastics, Polywheels, Sigma Industries and Premix. The Company believes that the Company is well positioned to compete based primarily on manufacturing capability, product quality, engineering capability, cost, and delivery. However, the industry remains highly competitive and some of the Company’s competitors have greater financial resources, research and development facilities, design engineering, manufacturing, and marketing capabilities.

MAJOR CUSTOMERS

The Company currently has two major customers, Navistar and PACCAR. Major customers are defined as customers whose current year sales individually consist of more than ten percent of total sales. The loss of a significant portion of sales to Navistar or PACCAR would have a material adverse effect on the business of the Company. In the previous year the Company identified Freightliner as a major customer; however, in 2007 Freightliner’s individual sales represented less than ten percent of the Company’s total sales.

Relationship with Navistar

In October 2006, the Company entered into a Comprehensive Supply Agreement with Navistar, which renewed the previous supply agreement that would have expired October 31, 2006. Under this Comprehensive Supply Agreement, which runs through October 31, 2011, the Company continues as the primary supplier of Navistar’s original equipment and service requirements for fiberglass reinforced parts using the SMC process, as long as the Company remains competitive in cost, quality, and delivery.

The Company makes products for Navistar’s Chatham (Canada) assembly plant, its Springfield, Ohio assembly plant, its Garland, Texas assembly facility, its bus facilities in Conway, Arkansas and Tulsa, Oklahoma and its Escobedo, Mexico assembly facility. The Company works closely on new product development with Navistar’s engineering and research personnel at Navistar’s Fort Wayne, Indiana Technical Center. Some of the products sold to Navistar include hoods, roofs, air deflectors, air fairings, fenders, splash panels, and other components.

The North American truck market in which Navistar competes is highly competitive and the demand for heavy and medium duty trucks is subject to considerable volatility as it moves in response to cycles in the overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled. Truck demand also depends on general economic conditions, among other factors. Sales to Navistar amounted to approximately 44%, 50%, and 51%, of total sales for 2007, 2006, and 2005, respectively.

Relationship with PACCAR

As a result of the August 1, 2005, acquisition of the Cincinnati Fiberglass Division of Diversified Glass, Inc., the Company increased its supply relationship with PACCAR. The Company produces roofs, back panels, shrouds, hoods, and other components for PACCAR who uses such products on its heavy and medium-duty trucks.

In April 2007, the Company entered into a Supply Agreement with PACCAR to supply certain fiberglass reinforced products. The supply agreement will expire on June 30, 2010 unless extended by the parties.

The Company makes products for PACCAR’s Chillicothe, Ohio, Madison, Tennessee, Denton, Texas, Renton, Washington, St. Therese (Canada), and Mexicali, Mexico assembly facilities. The Company also works closely on new product development with PACCAR’s engineering and research personnel. Some of the products sold to PACCAR include hoods, roofs, back panels, air deflectors, air fairings, fenders, splash panels, and other components.

The North American truck market in which PACCAR competes is highly competitive and the demand for trucks is subject to considerable volatility as it moves in response to cycles in the overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled. Truck demand also depends on general economic conditions, among other factors. Sales to PACCAR amounted to approximately 33%, 22%, and 12% of total sales for 2007, 2006, and 2005, respectively.

OTHER CUSTOMERS

The Company also produces products for other truck manufacturers, the marine industry, commercial product industries, the automotive aftermarket industries, and various other customers. In 2007, sales to these customers individually were all less than 10% of total annual sales. Sales to these customers amounted to approximately 23%, 28% and 37% of total sales for 2007, 2006 and 2005 respectively.

EXPORT SALES

The Company provides products to some of its customers that have manufacturing and service locations in Canada and Mexico. Export sales, which are denominated in United States dollars, were approximately $18,509,000, $32,098,000, and $25,820,000, for the years ended 2007, 2006, and 2005, respectively. These export sales dollars represent approximately 15%, 20%, and 20%, of total sales for 2007, 2006, and 2005, respectively.

FOREIGN OPERATIONS

As a result of the Airshield Asset Acquisition, the Company began importing products into the United States, as many products produced in the Company’s Mexican facility are sold to customers in the United States. Import sales, which are denominated in United States dollars, were approximately $18,329,000, $23,897,000 and 18,354,000, for the years ended 2007, 2006 and 2005 respectively. The sales of products imported were approximately 15%, 15%, and 14%, of total sales in 2007, 2006, and 2005, respectively.

The Company owns long-lived assets totaling $956,000 at December 31, 2007 that are located in its Mexican facility.

PRODUCTS

SMC Compound

SMC compound is a combination of resins, fiberglass, catalysts, and fillers compounded and cured in sheet form. The sheet is then used to manufacture compression-molded products, as discussed below, and on a limited basis sold to other molders.

The Company incorporates a sophisticated computer program that assists in the compounding of various complex SMC formulations tailored to customer needs. The system provides for the following:

	•		Control information during various production processes; and

	•		Data for statistical batch controls.

The Company has the capacity to manufacture approximately 48 million pounds of SMC sheet material annually. The following table shows production of SMC for 2007, 2006, and 2005. The decrease in pounds produced is primarily a result of the reduced sales orders in 2007 as a result of the industry wide general decline in truck orders due to the new federal emission standards that went into effect January 1, 2007.


	SMC Pounds
	Produced
Year	(Millions)
2007		22

2006		31

2005		31

Glass Mat Thermoplastic (“GMT”)

GMT compound is a combination of glass and thermoplastic resins purchased in the form of a sheet. The GMT compound is heated just prior to being used to manufacture compression-molded products.

Closed Molded Products

The Company manufactures reinforced plastic products using both compression molding and vacuum resin infusion molding process methods of closed molding.

Compression Molding — Compression molding is a process whereby SMC or GMT is molded to form by matched die steel molds through which a combination of heat and pressure are applied via a molding press. This process produces high quality, dimensionally consistent products. This process is typically used for higher volume products, which is necessary to justify the customers’ investment in molds.

The Company currently owns 19 compression-molding presses in its Columbus, Ohio plant, which range in size from 500 to 4,500 tons. The Company also owns nine presses and leases two presses in its Gaffney, South Carolina plant, which range in size from 1,000 to 3,000 tons.

Large platen, high tonnage presses (greater than 2,000 tons) provide the ability to compression mold very large SMC parts. The Company believes that it possesses a significant portion of the large platen, high tonnage molding capacity in the industry.

To enhance the surface quality and paint finish of products, the Company uses both in-mold coating and vacuum molding processes. In-mold coating is a manufacturing process performed by injecting a liquid over the molded part surface and then applying pressure at elevated temperatures during an extended molding cycle. The liquid coating serves to fill and/or bridge surface porosity as well as provide a barrier against solvent penetration during subsequent top-coating operations. Likewise, vacuum molding is the removal of air during the molding cycle for the purpose of reducing the amount of surface porosity. The Company believes that it is among the industry leaders in in-mold coating and vacuum molding applications, based on the size and complexity of parts molded.

Resin Transfer Molding (“RTM”) — This process employs two molds, typically a core and a cavity, similar to matched die molding. The composite is produced by placing glass mat, chopped strand, or continuous strand fiberglass in the mold cavity in the desired pattern. Parts that would be used for cosmetic purposes in their end use would typically have a gel coat applied to the mold surface. The core mold is then fitted to the cavity, and upon a satisfactory seal, a vacuum is applied. When the proper vacuum is achieved, the resin is injected into the mold to fill the part. Finally, the part is allowed to cure, and then it is removed from the mold and trimmed to shape. Fiberglass reinforced products produced from the RTM process exhibit a high quality surface on both sides of the part and excellent part thickness. Multiple insert tooling (“MIT”) technique can be utilized in the RTM process to improve throughput based upon volume requirements.

Open Molded Products

The Company produces reinforced plastic products using both the spray-up and hand-lay-up methods of open molding.

Hand-Lay-Up — This process utilizes a shell mold, typically the cavity, where glass cloth, either chopped strand or continuous strand glass mat, is introduced into the cavity. Resin is then applied to the cloth and rolled out to achieve a uniform wet-out from the glass and to remove any trapped air. The part is then allowed to cure and removed from the mold. After removal, the part typically undergoes trimming to achieve the net shape desired. Parts that would be cosmetic in their end use would have a gel coat applied to the mold surface prior to the lay-up to improve the surface quality of the finished part. Parts produced from this process have a smooth outer surface and an unfinished or rough interior surface. These fiberglass-reinforced products are typically non-cosmetic components or structural reinforcements that are sold externally or used internally as components of larger assemblies.

Spray-Up — This process utilizes the same type of shell mold, but instead of using glass cloth to produce the composite part, a chopper/spray system is employed. Glass yarns and resin feed the chopper/spray gun. The resin coated, chopped glass, which is approximately one inch in length, is sprayed into the mold to the desired thickness. The resin coated glass in the mold is then rolled out to ensure complete wet-out and to remove any trapped air. The part is then allowed to cure, is removed from the mold and is then trimmed to the desired shape. Parts that would be used for cosmetic purposes in their end use would typically have a gel coat

applied to the mold surface prior to the resin-coated glass being sprayed into the mold to improve the surface quality of the finished part. Parts produced from this process have a smooth outer surface and an unfinished, or rough interior surface.

The Company currently operates 13 separate spray-up or hand lay up cells in the Matamoros, Mexico facility that are capable of producing fiberglass-reinforced products with and without gel coat surfaces. As a result of the Cincinnati Fiberglass acquisition, the Company also has a chain driven robotic gelcoating and spray up line and a hand spray up cell at the Batavia, Ohio location. Part sizes weigh from a few pounds to well over a hundred pounds with surface quality tailored for the end use application.

Assembly, Machining, and Paint Products

Many of the products molded by the Company are assembled, machined, and/or prime painted to result in a completed product used by the Company’s end-customers.

The Company has demonstrated manufacturing flexibility that accepts a range of low volume, hand assembly, and machining work to high volume, highly automated assembly and machining systems. Robotics are used as deemed productive for material handling, machining, and adhesive applications. In addition to conventional machining methods, water-jet cutting technology is also used where appropriate. The Company utilizes paint booths and batch ovens in its facilities when warranted. The Company generally contracts with outside parties when customers require that the Company provide a finish of a top coat of paint.

RAW MATERIALS

The principal raw materials used in the compounding of SMC and the closed and open molding processes are polyester, vinylester and epoxy resins, fiberglass rovings, and filler. Other significant raw materials include adhesives for assembly of molded components and in-mold coating, gelcoat, prime paint for preparation of cosmetic surfaces, and hardware (steel components). Many of the raw materials used by the Company are petroleum and energy based, and therefore, the costs of certain raw materials can fluctuate based on changes in costs of these underlying commodities. The Company has experienced price increases for certain of these materials, which has caused suppliers to be reluctant to enter into long-term contracts. Because of this, the Company continues to reevaluate its strategy and consider alternative suppliers. Each raw material generally has supplier alternatives, which are being evaluated as the current agreements expire. The Company is regularly evaluating its supplier base for certain supplies, repair items, and componentry to improve its overall purchasing position as supply of these items is generally available from multiple sources.

BACKLOG

The Company relies on production schedules provided by its customers to plan and implement production. These schedules are typically provided on a weekly basis and are considered firm typically for four weeks. Some customers can update these schedules daily for changes in demand that allow them to run their inventories on a “just-in-time” basis. The ordered backlog was approximately $ 9.0 million and $10.8 million at December 31, 2007 and 2006, respectively, all of which the Company expects to ship during the first quarter of the following year.

CAPACITY CONSTRAINTS

In previous years, the Company has been required to work an extended shift and day schedule, up to a seven-day/three shift operation, to meet its customers’ production requirements. The Company has used various methods from overtime to a weekend manpower crew to support the different shift schedules required.

Based on recent and expected 2008 production schedules, the Company has not had and does not foresee difficulty in providing various shift schedules necessary to meet customer requirements.

See further discussion of machine and facility capacities at Item 2 “Properties” contained elsewhere in this Annual Report on Form 10-K.

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT

Capital expenditures totaled approximately $2.7 million, $9.2 million, and $3.0 million for 2007, 2006, and 2005, respectively. Capital expenditures in 2007 consist primarily of the buyout of certain equipment leases in 2007 and purchase of production equipment to manufacture parts as well as storage racks, computers, and office furniture and fixtures. Capital expenditures in 2006 were substantially higher as compared to 2007 due to the expansion of the Columbus Plant as well as the additional equipment leases that were bought out during 2006.

Product development is a continuous process at the Company. Research and development activities focus on developing new SMC formulations, new reinforced plastic products, and improving existing products and manufacturing processes.

The Company does not maintain a separate research and development organization or facility but uses its production equipment, as necessary, to support these efforts and cooperates with its customers and its suppliers in research and development efforts. Likewise, manpower to direct and advance research and development is integrated with the existing manufacturing, engineering, production, and quality organizations. Management of the Company has estimated that internal costs related to research and development activities approximate $223,000 in 2007, $254,000 in 2006, and $360,000 in 2005.

ENVIRONMENTAL COMPLIANCE

The Company’s manufacturing operations are subject to federal, state, and local environmental laws and regulations, which impose limitations on the discharge of hazardous and nonhazardous pollutants into the air and waterways. The Company has established and implemented standards for the treatment, storage, and disposal of hazardous waste. The Company’s policy is to conduct its business with due regard for the preservation and protection of the environment. The Company’s environmental waste management involves the regular auditing of satellite hazardous waste accumulation points, hazardous waste activities and authorized treatment, storage and disposal facility. As part of the Company’s environmental policy all employees are trained on waste management and other environmental issues. Through continual auditing the Company can ensure that all facilities are in compliance with the applicable federal, state, and local environmental laws and regulations.

In June 2003, the Ohio Environmental Protection Agency (“Ohio EPA”) issued Core Molding Technologies’ final Title V Operating Permit for the Columbus, Ohio facility, and in May 2004 the Ohio EPA issued final Title V Operating Permit for the Cincinnati, Ohio facility. In August 2005, the South Carolina Department of Health and Environmental Control issued a final Title V Operating Permit for the Gaffney, South Carolina facility. Since that time, Core Molding Technologies has substantially complied with the requirements of these permits. Core Molding Technologies does not believe that the cost to comply with these permits will have a material effect on its operations, competitive position, or capital expenditures.

EMPLOYEES

As of December 31, 2007, the Company employed a total of 942 employees, which consists of 571 employees in its United States operations and 371 employees in its Mexican operations. Of these 942 employees, 266 are covered by a collective bargaining agreement with the International Association of Machinists and Aerospace Workers (“IAM”), which extends to August 4, 2010, and 311 are covered by a collective bargaining agreement with Sindicato de Jorneleros y Obreros, which extends to January 16, 2009.

PATENTS, TRADE NAMES, AND TRADEMARKS

The Company will evaluate, apply for, and maintain patents, trade names, and trademarks where it believes that such patents, trade names, and trademarks are reasonably required to protect its rights in its products. The Company does not believe that any single patent, trade name, or trademark or related group of such rights is materially important to its business or its ability to compete.

SEASONALITY & BUSINESS CYCLE

The Company’s business is affected annually by the production schedules of its customers. Certain of the Company’s customers typically shut down their operations on an annual basis for a period of one to several weeks during the Company’s third quarter. Certain customers also typically shut down their operations during the last week of December, as well. As a result, demand for the Company’s products drops significantly during the third and fourth quarters. Similarly, demand for medium and heavy-duty trucks, personal watercraft, and automotive products fluctuate on a cyclical and seasonal basis, causing a corresponding fluctuation for demand of the Company’s products.

ITEM 1A. RISK FACTORS

The following risk factors describe various risks that may affect our business, financial condition, and operations. References to “we,” “us,” and “our” in this “Risk Factors” section refer to Core Molding Technologies and its subsidiaries, unless otherwise specified or unless the context otherwise requires.

We are dependent on sales to a small number of our major customers.

Sales to Navistar and PACCAR constituted approximately 44% and 33% respectively, of our 2007 net sales. No other customer accounted for more than 10% of our net sales for this period. The loss of any significant portion of sales to any of our major customers could have a material adverse effect on our business, results of operations, or financial condition.

We are a regular supplier to each of these customers, which results in recurring revenues. If we could not maintain our supplier relationship with any of our major customers it could have a material adverse effect on our business, results of operations, or financial condition.

We are continuing to engage in efforts intended to improve and expand our relations with Navistar and PACCAR as well as provide support for our entire customer base. We have supported our position with customers through direct and active contact through our sales, quality, engineering, and operational personnel. We cannot make any assurances that we will maintain or improve our customer relationships, whether these customers will continue to do business with us as they have in the past or whether we will be able to supply these customers or any of our other customers at current levels.

Our business is affected by the cyclical nature of the industries and markets that we serve.

The North American heavy and medium duty truck industries are highly cyclical. These industries and markets fluctuate in response to factors that are beyond our control, such as general economic conditions, interest rates, federal and state regulations (including engine emissions regulations, tariffs, import regulations, and other taxes), consumer spending, fuel costs, and our customers’ inventory levels and production rates. 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. In addition, our operations are typically seasonal as a result of regular customer maintenance shutdowns, which typically vary from year to year based on production demands and occur in the third and fourth quarter of each calendar year. This seasonality may result in decreased net sales and profitability during the third and fourth fiscal quarters of each calendar year. Weakness in overall economic conditions or in the markets that we serve, or significant reductions by our customers in their inventory levels or future production rates, could result in decreased demand for our products and could have a material adverse effect on our business, results of operations, or financial condition.

Price increases in raw materials and availability of raw materials could adversely affect our operating results and financial condition.

Core Molding Technologies purchases resins and fiberglass for use in production as well as steel and other components for product assembly. The prices of resins are affected by the prices of crude oil, natural gas, and benzine as well as processing capacity versus demand and the Company has incurred increases in raw material costs over the past few years. The Company attempts to reduce its exposure to increases by working with suppliers, evaluating new suppliers, improving material efficiencies, and when necessary through sales price adjustments to customers. If we are unsuccessful in developing ways to mitigate these raw material increases we may not be able to improve productivity or realize our ongoing cost reduction programs sufficiently to help offset the impact of these increased raw material costs. As a result, higher raw material costs could result in declining margins and operating results.

Cost reduction and quality improvement initiatives by original equipment manufacturers could have a material adverse effect on our business, results of operations, or financial condition.

We are primarily a components supplier to the heavy and medium duty truck industries, which are characterized by a small number of OEMs that are able to exert considerable pressure on components suppliers to reduce costs, improve quality, and provide additional design and engineering capabilities. Given the fragmented nature of the industry, OEMs continue to demand and receive price reductions and measurable increases in quality through their use of competitive selection processes, rating programs, and various other arrangements. We may be unable to generate sufficient production cost savings in the future to offset such price reductions. OEMs may also seek to save costs by relocating production to countries with lower cost structures, which could in turn

lead them to purchase components from suppliers with lower production costs. Additionally, OEMs have generally required component suppliers to provide more design engineering input at earlier stages of the product development process, the costs of which have, in some cases, been absorbed by the suppliers. Future price reductions, increased quality standards, and additional engineering capabilities required by OEMs may reduce our profitability and have a material adverse effect on our business, results of operations, or financial condition.

We operate in highly competitive markets.

The markets in which we operate are highly competitive. We compete with a number of other manufacturers that produce and sell similar products. Our products primarily compete on the basis of capability, product quality, cost, and delivery. Some of our competitors have greater financial resources, research and development facilities, design engineering, manufacturing, and marketing capabilities.

We may be subject to additional shipping expense or late fees if we are not able to meet our customers’ on-time demand for our products.

We must continue to meet our customers’ demand for on-time delivery of our products. Factors that could result in our inability to meet customer demands include a failure by one or more of our suppliers to supply us with the raw materials and other resources that we need to operate our business effectively or poor management of our company or one or more of its’ plants and an unforeseen spike in demand for our products, among other factors. If this occurs, we may be required to incur additional shipping expenses to ensure on-time delivery or otherwise be required to pay late fees, which could have a material adverse effect on our business, results of operations, or financial condition.

If we fail to attract and retain key personnel our business could be harmed.

Our success largely depends on the efforts and abilities of key personnel within the company. Their skills, experience, and industry contacts significantly benefit us. The inability to retain key personnel could have a material adverse effect on our business, results of operations, or financial condition. Our future success will also depend in part upon our continuing ability to attract and retain highly qualified personnel.

Work stoppages or other labor issues at our facilities or at our customers’ facilities could adversely affect our operations.

As of December 31, 2007, unions at our Columbus, Ohio and Matamoros, Mexico facilities represented approximately 61% of our entire workforce. As a result, we are subject to the risk of work stoppages and other labor-relations matters. The current Columbus, Ohio and Matamoros, Mexico union contracts extend through August 4, 2010 and January 16, 2009, respectively. Any prolonged work stoppage or strike at either our Columbus, Ohio or Matamoros, Mexico unionized facilities could have a material adverse effect on our business, results of operations, or financial condition. These collective bargaining agreements expire at various times. Any failure by us to reach a new agreement upon expiration of such union contracts may have a material adverse effect on our business, results of operations, or financial condition.

In addition, if any of our customers or suppliers experiences a material work stoppage, that customer may halt or limit the purchase of our products or the supplier may interrupt supply of our necessary production components. This could cause us to shut down production facilities relating to these products, which could have a material adverse effect on our business, results of operations, or financial condition

Increases in energy prices will increase our operating costs and likely reduce our profitability.

We use energy to manufacture our products. Our operating costs increase if energy costs rise. During periods of higher energy costs, we may not be able to recover our operating cost increases through production efficiencies and price increases. While we may hedge our exposure to higher prices via future energy purchase contracts, increases in energy prices will increase our operating costs and likely reduce our profitability.

Our business is subject to risks associated with manufacturing processes.

We convert raw materials into molded products through a manufacturing process at production facilities in Columbus, Ohio; Gaffney, South Carolina; Batavia, Ohio; and Matamoros, Mexico. While we maintain insurance covering our manufacturing

and production facilities, including business interruption insurance, a catastrophic loss of the use of all or a portion of our facilities due to accident, fire, explosion, or natural disaster, whether short or long-term, could have a material adverse effect on the Company.

Unexpected failures of our equipment and machinery may result in production delays, revenue loss, and significant repair costs, as well as injuries to our employees. Any interruption in production capability may require us to make large capital expenditures to remedy the situation, which could have a negative impact on our profitability and cash flows. Our business interruption insurance may not be sufficient to offset the lost revenues or increased costs that we may experience during a disruption of our operations. Because we supply our products to OEMs, a temporary or long-term business disruption could result in a permanent loss of customers. If this were to occur, our future sales levels and therefore our profitability could be materially adversely affected.

Our insurance coverage may be inadequate to protect against the potential hazards incident to our business.

We maintain property, business interruption, product liability, and casualty insurance coverage, but such insurance may not provide adequate coverage against potential claims, including losses resulting from war risks, terrorist acts, or product liability claims relating to products we manufacture. Consistent with market conditions in the insurance industry, premiums and deductibles for some of our insurance policies have been increasing and may continue to increase in the future. In some instances, some types of insurance may become available only for reduced amounts of coverage, if at all. In addition, there can be no assurance that our insurers would not challenge coverage for certain claims. If we were to incur a significant liability for which we were not fully insured or that our insurers disputed, it could have a material adverse effect on our financial position.

We have made acquisitions and may make acquisitions in the future. We may not realize the improved operating results that we anticipate from these acquisitions or from acquisitions we may make in the future, and we may experience difficulties in integrating the acquired businesses or may inherit significant liabilities related to such businesses.

We explore opportunities to acquire businesses that we believe are related to our core competencies from time to time, some of which may be material to us. We expect such acquisitions will produce operating results consistent with our other operations, however, we cannot provide assurance that this assumption will prove correct with respect to any acquisition.

Any acquisitions may present significant challenges for our management due to the increased time and resources required to properly integrate management, employees, information systems, accounting controls, personnel, and administrative functions of the acquired business with those of Core Molding Technologies and to manage the combined company on a going forward basis. The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of these businesses could adversely impact our business, results of operations, and liquidity, and the benefits we anticipate may never materialize.

If we are unable to meet future capital requirements, our business may be adversely affected.

As we grow our business, we may have to incur significant capital expenditures. We may make capital investments to, among other things, upgrade our facilities, purchase leased facilities and equipment, and enhance our production processes. We cannot assure you that we will have, or be able to obtain, adequate funds to make all necessary capital expenditures when required, or that the amount of future capital expenditures will not be materially in excess of our anticipated or current expenditures. If we are unable to make necessary capital expenditures we may not have the capability to support our customer demands, which, in turn could reduce our sales and profitability and impair our ability to satisfy our customers’ expectations. In addition, even if we are able to invest sufficient resources, these investments may not generate net sales that exceed our expenses, generate any net sales at all, or result in any commercially acceptable products.

Our products may be rendered obsolete or less attractive if there are changes in technology, regulatory requirements, or competitive processes.

Changes in technology, regulatory requirements, and competitive processes may render certain products obsolete or less attractive. Our ability to anticipate changes in these areas will be a significant factor in our ability to remain competitive. If we are unable to identify or compensate for any one of these changes it may have a material adverse effect on our business, results of operations, or financial condition.

Our stock price can be volatile.

Our stock price can fluctuate widely in response to a variety of factors. Factors include actual or anticipated variations in our quarterly operating results, our relatively small public float, changes in securities analysts’ estimates of our future earnings, and

the loss of major customers or significant business developments relating to us or our competitors, and other factors, including those described in this “Risk Factors” section. Our common stock also has a low average daily trading volume, which limits a person’s ability to quickly accumulate or quickly divest themselves of large blocks of our stock. In addition, a low average trading volume can lead to significant price swings even when a relatively few number of shares are being traded.

We are subject to environmental rules and regulations that may require us to make substantial expenditures.

Our operations, facilities, and properties are subject to extensive and evolving laws and regulations pertaining to air emissions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes, the investigation and remediation of contamination, and otherwise relating to health, safety, and the protection of the environment and natural resources. As a result, we may be involved from time to time in administrative or legal proceedings relating to environmental, health and safety matters, and may need to incur capital costs and other expenditures relating to such matters.

Although we do not presently anticipate terminating any senior management employees, certain senior management employees have entered into potentially costly severance arrangements with us if terminated after a change in control.

We have entered into executive severance agreements with certain senior management employees that provide for significant severance payments in the event such employee’s employment with us is terminated within 2 years of a change in control (as defined in the severance agreement) either by the employee for good reason (as defined in the severance agreement) or by us for any reason other than cause (as defined in the severance agreement), or for death, or disability. A change in control under these agreements includes any transaction or series of related transactions as a result of which less than fifty percent (50%) of the combined voting power of the then-outstanding securities immediately after such transaction are held in the aggregate by the holders of voting stock of the Company immediately prior to such transaction; any person has become the beneficial owner of securities representing 50% or more of the voting stock of the Company; the Company files a report or proxy statement with the Securities and Exchange Commission that a change in control of the Company has occurred; or within any two year period, the directors at the beginning of the period cease to constitute at least a majority thereof. These agreements would make it costly for us to terminate certain of our senior management employees and such costs may also discourage potential acquisition proposals, which may negatively affect our stock price.

Our stock price may be adversely affected as a result of shares eligible for future sale by Navistar.

Navistar received 4,264,000 shares of the Company’s stock in connection with the sale of the Columbus Plastics unit to Core Molding Technologies, Inc. in 1996. On July 18, 2007, the Company entered into a stock repurchase agreement with Navistar, pursuant to which the Company purchased 3,600,000 of these shares from Navistar. The remaining 664,000 shares of Core Molding Technologies Common Stock which Navistar received and still owns may not be sold in the absence of registration under the Securities Act or an exemption therefrom, including the exemptions contained in Rule 144 under the Securities Act. Core Molding Technologies previously entered into a Registration Rights Agreement with Navistar pursuant to which Navistar and its transferees were granted the right to demand registration of the resale of such shares of Core Molding Technologies Common Stock at any time. Navistar was also granted unlimited piggyback registration rights with respect to these shares under the Registration Rights Agreement. No prediction can be made as to the effect, if any, of future sales of shares of Core Molding Technologies Common Stock by Navistar, if any, on the market price of the Core Molding Technologies Common Stock prevailing from time to time. Sales of substantial amounts of Core Molding Technologies Common Stock by Navistar, or the perception that such sales could occur, could adversely affect prevailing market prices for those securities.

Our foreign operations subject us to risks that could negatively affect our business.

We operate a manufacturing facility in Matamoros, Mexico and, as a result, our business and operations are subject to the risk of changes in economic conditions, tax systems, consumer preferences, social conditions, and political conditions inherent in Mexico, including changes in the laws and policies that govern foreign investment, as well as changes in United States laws and regulations relating to foreign trade and investment. In addition, our results of operations and the value of our foreign assets are affected by fluctuations in Mexican currency exchange rates, which may favorably or adversely affect reported earnings. There can be no assurance as to the future effect of any such changes on our results of operations, financial condition, or cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company owns two production plants in the United States that are situated in Columbus, Ohio and Gaffney, South Carolina. As a result of the August 2005 acquisition of Cincinnati Fiberglass, the Company leases a third United States production facility in Batavia, Ohio. The Company also leases a production facility in Matamoros, Mexico as a result of the acquisition of Airshield Corporation in 2001. The Company believes that, through productive use, these facilities have adequate production capacity to meet current production volume.

At the Columbus, Ohio and Gaffney, South Carolina facilities the Company measures molding capacity in terms of its twelve large molding presses (i.e. 2,000 tons and greater). The approximate large press capacity utilization for the molding of production products in the Company’s United States production facilities was 50%, 62%, and 62%, in the fourth quarter of 2007, 2006, and 2005, respectively. Capacity utilization decreased in 2007 due to the lower volumes of sales due to the downturn in the industry at both facilities. Capacity utilization is measured on the basis of a five day, three-shifts per day operation.

The Columbus, Ohio plant is located at 800 Manor Park Drive on approximately 28.2 acres of land. The approximate 331,558 square feet of available floor space at the Columbus, Ohio plant is comprised of the following which includes an expansion of the manufacturing facility of 7,962 square feet that was completed in 2006:


	Approximate
	Square Feet
Manufacturing/Warehouse		315,409
Office		16,149

Total		331,558

The Company acquired the property at 800 Manor Park Drive in 1996 as a result of the Asset Purchase Agreement with Navistar.

The Gaffney, South Carolina plant, which was opened in early 1998, is located at 24 Commerce Drive, Meadow Creek Industrial Park on approximately 20.7 acres of land. The approximate 110,900 square feet of available floor space at the Gaffney, South Carolina plant is comprised of the following:


	Approximate
	Square Feet
Manufacturing/Warehouse		105,700
Office		5,200

Total		110,900

The Columbus, Ohio and Gaffney, South Carolina properties are subject to liens and security interests as a result of the properties being pledged by the Company as collateral for its debt as described in Note 7 of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.

As a result of the acquisition of the Cincinnati Fiberglass Division of Diversified Glass, Inc., the Company leases a production plant in Batavia, Ohio located at 4174 Half Acre Road on approximately 9 acres of land. The term of the lease is seven years through July 2012. The Company has the option to terminate the lease at any time, by providing written notice to the lessor no later than 90 days prior to the intended termination date. The Company has the option to purchase the property at the end of every lease year. The approximate 107,740 square feet of available floor space at the Batavia, Ohio plant is comprised of the following:


	Approximate
	Square Feet
Manufacturing/Warehouse		103,976
Office		3,764

Total		107,740

The capacity of production in this facility is not linked directly to equipment capacities, as in the Company’s other facilities, due to the nature of the products produced. Capacity of the facility is tied to available floor space and the availability of personnel. The approximate capacity utilization for this operation was 37%, 62% and 56% in the fourth quarter of 2007, 2006 and 2005, respectively.

In conjunction with the establishment of operations in Mexico, as discussed above, the Company leases a production plant in Matamoros, Mexico, located at Ave. Uniones Y Michigan, Matamoros, Tamps. Mexico. The term of the lease is ten years through October 2011, with an option to renew for an additional ten years and with an option to buy the facility at any time within the first seven years of the lease. The lease is cancelable by the Company with six months notice. The facility consists of approximately 313,000 square feet on approximately 12 acres.


	Approximate
	Square Feet
Manufacturing/Warehouse		309,400
Office		3,600

Total		313,000

The capacity of production in this facility is not linked directly to equipment capacities, as in the Company’s other facilities, due to the nature of the products produced. Capacity of the facility is tied to available floor space and the availability of personnel. The approximate capacity utilization for this operation was 44%, 66%, and 65% in the fourth quarter of 2007, 2006, and 2005, respectively. Capacity utilization for the Matamoros’ operation is measured on the basis of five days, two 9.6 hour shifts per day.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation incidental to the conduct of its business. However, the Company is presently not involved in any legal proceedings, which in the opinion of management are likely to have a material adverse effect on the Company’s consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company submitted no matters to a vote of its security holders during the fourth quarter of its fiscal year ended December 31, 2007.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is traded on the American Stock Exchange under the symbol “CMT”.

The table below sets forth the high and low sale prices of the Company for each full quarterly period within the two most recent fiscal years for which such stock was traded, as reported on the American Stock Exchange Composite Tape.


Core Molding Technologies, Inc.		High		Low
Fourth Quarter	2007	$	7.71	$	6.75
Third Quarter	2007		8.74		6.70
Second Quarter	2007		8.48		6.56
First Quarter	2007		10.35		7.05

Fourth Quarter	2006	$	11.22	$	6.59
Third Quarter	2006		7.10		5.25
Second Quarter	2006		7.90		5.02
First Quarter	2006		8.99		5.05

The Company’s common stock was held by 329 holders of record on March 26, 2008.

The Company made no payments of cash dividends during 2007 and 2006. The Company currently expects that its earnings will be retained to finance the growth and development of its business and does not anticipate paying dividends on its common stock in the foreseeable future.

Equity Compensation Plan Information

The following table shows certain information concerning our common stock to be issued in connection with our equity compensation plans as of December 31, 2007:

Number of Shares

Weighted

to be Issued Upon

Average

Number of

Exercise of

Exercise Price

Shares

Outstanding

of Outstanding

Remaining

Options or Vesting

Options or

Available for

of Restricted

Restricted

Future

Plan Category

Grants

Issuance

Equity compensation plans approved by stockholders

682,116

3.66

2,023,730

Equity compensation plans not approved by stockholders (1)

155,650

3.21

—


(1)		On August 4, 2003, the Company issued 261,250 options that were not covered under the Plan at $3.21 to its Directors.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Core Molding Technologies Inc., The S&P Smallcap 600 Index
And The S&P Construction & Farm Machinery & Heavy Trucks Index


*		$100 invested on 12/31/02 in stock or index-including reinvestment of dividends. Fiscal year ending December 31.

		Copyright © 2008, Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. All rights reserved. www.researchdatagroup.com/S&P.htm

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data are derived from the audited consolidated financial statements of the Company. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the financial statements and related notes included elsewhere in this Annual Report on Form 10-K.


	Years Ended December 31,
(In thousands,
except per share data)	2007			2006			2005			2004			2003
Operating Data:
Product sales	$	101,045		$	150,174		$	124,910		$	103,733		$	81,295
Tooling sales		21,667			12,156			5,633			8,112			11,488

Net sales		122,712			162,330			130,543			111,845			92,783
Gross margin		16,968			29,869			23,275			17,113			13,898
Income before interest and taxes		5,569			15,856			10,394			6,572			4,403
Net income		3,726			10,411			6,286			5,135			1,665
Earnings Per Share Data:
Net income per common share:
Basic		.43			1.03			.63			.53			.17
Diluted		.41			1.00			.60			.52			.17
Balance Sheet Data:
Total assets		61,695			89,506			74,221			68,960			56,152
Working capital		6,253			27,575			22,766			13,530			8,544
Long-term debt		5,914			7,779			9,595			11,371			12,999
Stockholders’ equity		21,827			42,694			34,141			26,277			20,854
Return on Equity		17	%		24	%		18	%		20	%		8	%

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s 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; general economic conditions in the markets, sometimes driven by federal and state regulations(including engine emission regulations), which Core Molding Technologies operates; dependence upon two major 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 and retain key personnel; compliance changes to federal, state and local environmental laws and regulations; the availability of capital; the ability of Core Molding Technologies to provide on-time delivery to customers, which may require additional shipping expenses to ensure on-time delivery or otherwise result in late fees; risk of cancellation or rescheduling of orders; management’s 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 this Annual Report 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 Navistar’s 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.

Core Molding Technologies recorded net income for 2007 of $3,726,000 or $0.43 per basic and $0.41 per diluted share, compared with $10,411,000 or $1.03 per basic and $1.00 per diluted share, in the year 2006. Net income was negatively impacted by decreased sales volumes due to lower demand resulting from an industry wide decline in truck orders. Stricter federal emission standards for 2007 increased demand throughout 2006 for heavy and medium-duty trucks as customers purchased vehicles in advance of the new 2007 emission standards. Demand in 2007 has declined as anticipated by industry analysts who estimated a twenty to forty percent decrease in new orders for heavy and medium-duty trucks compared to 2006 demand. In addition to the

effect of lower sales, net income was negatively impacted by production inefficiencies resulting from new product launches and varying production levels caused by inconsistent customer orders as well as lower fixed cost absorption.

RESULTS OF OPERATIONS

2007 COMPARED WITH 2006

Net sales for 2007 totaled $122,712,000, an approximate 24% decrease from the $162,330,000 reported for 2006. Included in total sales are tooling project revenues of $21,667,000 for 2007 and $12,156,000 for 2006. Tooling project sales result from billings to customers for molds and assembly equipment built specifically for their products. These sales are sporadic in nature and do not represent a recurring trend. Tooling project revenues relate to both replacement models and new business awarded to the Company. Total product sales revenue for 2007, excluding tooling project revenue, totaled $101,045,000, an approximate 33% decrease from the $150,174,000 reported for 2006. The primary reason for the decrease in product sales is lower demand resulting from an industry wide general decline in truck orders due to the new federal emissions standards that went into effect on January 1, 2007 and was partially offset by new business awarded to the Company.

Sales to Navistar in 2007 totaled $53,629,000, an approximate 34% decrease from the 2006 amount of $81,223,000. Included in total sales is $8,323,000 of tooling sales for 2007 compared to $10,206,000 in 2006. Total product sales to Navistar have decreased by 36% for 2007 as compared to 2006. The primary reason for the decrease in product sales is lower demand resulting from an industry wide general decline in truck orders as noted above, and was partially offset by new business with Navistar.

Sales to PACCAR in 2007 totaled $40,331,000, an approximate 11% increase from 2006 sales amount of $36,222,000. Included in total sales is $12,518,000 of tooling sales for 2007 compared to $1,232,000 in 2006. Total product sales to PACCAR have decreased by 21% for 2007 as compared to 2006. The primary reason for the decrease in sales to PACCAR is a result of the industry wide decline in truck orders as noted above, which was partially offset by new business with PACCAR.

Sales to other customers decreased by approximately 36% to $28,751,000 in 2007 from $44,885,000 in 2006. This decrease is primarily related to the general decline in truck orders from other truck manufacturers Core Molding Technologies serves and reduced sales to an automotive supplier.

Gross margin was approximately 14% of sales in 2007 compared to 18% of sales in 2006. The decrease in gross margin was due to a combination of factors including production inefficiencies resulting from new product launches and varying production levels caused by inconsistent customer orders. Also contributing to the decrease in gross margin was lower fixed cost absorption due to lower product sales volumes. Our manufacturing operations have significant fixed costs such as labor, energy, depreciation, lease expense and post retirement healthcare costs that do not change proportionately with sales. Partially offsetting the decrease in gross margin was lower profit sharing expense due to lower earnings.

Selling, general, and administrative expenses (“SG&A”) totaled $11,399,000 in 2007, decreasing from $14,013,000 incurred in 2006. The primary reasons for this decrease are lower profit sharing expense due to lower earnings, lower wage and benefit costs related to reductions in personnel, as well as lower professional fees, outside services and insurance costs.

Interest income decreased to $542,000 in 2007 compared to $645,000 in 2006. This change is primarily due to the repurchase of 3.6 million shares of stock from Navistar. On July 18, 2007, $19,000,000 of cash balances were used to partially finance this repurchase, resulting in lower interest income. Interest expense increased to $717,000 in 2007 compared to $488,000 in 2006. The increase in interest expense is related to borrowings of $7,100,000 against the line of credit that was used to finance the remaining portion of the stock repurchase from Navistar. Partially offsetting higher interest expense from the share repurchase was a reduction in interest associated with reductions of long term debt due to regularly scheduled payments. 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 previously entered into by Core Molding Technologies, the interest rate is essentially fixed for these two debt instruments.

Income tax expense for 2007 was approximately 31% of total income before taxes compared to approximately 35% in 2006. The decrease is primarily due to the Company qualifying for certain manufacturing production activity deductions for its U.S. manufacturing facilities under Section 199 of the Internal Revenue Code as well as state and local tax refunds received. Section 199 deductions as a percentage of income are ratably higher in 2007 compared to 2006.

Net income for 2007 was $3,726,000 or $.43 per basic share and $.41 per diluted share, representing a decrease of $6,685,000 from the 2006 net income of $10,411,000 or $1.03 per basic share and $1.00 per diluted share.

2006 COMPARED WITH 2005

Net sales for 2006 totaled $162,330,000, an approximate 24% increase from the $130,543,000 reported for 2005. Included in total sales are tooling project revenues of $12,156,000 for 2006 and $5,633,000 for 2005. Tooling project sales result from billings to customers for molds and assembly equipment built specifically for their products. These sales are sporadic in nature and do not represent a recurring trend. Total product sales revenue for 2006, excluding tooling project revenue, totaled $150,174,000, an approximate 20% increase from the $124,909,000 reported for 2005. The primary reason for this increase was due to the full year effect of the Batavia, Ohio facility which was acquired in August of 2005, customers purchasing vehicles in advance of the new 2007 emission standard and the positive impact general economic conditions had on the demand for medium and heavy-duty trucks.

Sales to Navistar totaled $81,223,000, an approximate 22% increase from the 2005 amount of $66,382,000. Included in total sales is $10,206,000 of tooling sales for 2006 compared to $4,991,000 in 2005. Total product sales to Navistar have increased by 16% for 2006 as compared to 2005. The primary reason for the increase was due to customers purchasing vehicles in advance of the new 2007 emission standard and the positive impact general economic conditions have had, as referenced above, as well as the recognition of tooling revenue.

Sales to PACCAR in 2006 totaled $36,222,000, a significant increase from 2005 sales amount of $15,512,000. Included in total sales is $1,232,000 of tooling sales for 2006 compared to $65,000 in 2005. Total product sales to PACCAR have increased by 127% for 2006 as compared to 2005. The primary reason for the increase in sales to PACCAR is due to the full year effect of the Batavia, Ohio facility which was acquired August of 2005, customers purchasing vehicles in advance of the new 2007 emission standard, and the positive impact general economic conditions have had, as referenced above.

Sales to other customers decreased by approximately 8% to $44,885,000 in 2006 from $48,649,000 in 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.

Gross margin was 18.4% of sales in 2006 compared to 17.8% of sales in 2005. The primary reason for the increase in gross margin, as a percentage of sales was due to better absorption of fixed costs of production due to the increases in production volumes. These gains were partially offset by increased profit sharing amounts resulting from improved profits.

Selling, general, and administrative expenses totaled $14,013,000 in 2006, which was greater than the $12,881,000 incurred in 2005. The increase from 2005 was primarily due to increases in the Company’s profit sharing amounts resulting from increased profits and increases in professional and outside services.

Interest income increased to $645,000 in 2006 compared to $226,000 in 2005 due to increases in cash balances and the increase in the interest rate earned on those cash balances. Interest expense decreased to $488,000 in 2006 compared to $751,000 in 2005. Contributing to the reduction of net interest expense was capitalized interest in 2006 of approximately $125,000 relating to the Columbus plant expansion, as well as a reduction in debt from regularly scheduled principal payments. There was no capitalized interest recorded in 2005. Interest rates experienced by Core Molding Technologies with respect to its long-term borrowing facilities were favorable; however, due to the interest rate swaps Core Molding Technologies entered into, the interest rate is essentially fixed for these debt instruments.

Income tax expense for 2006 was approximately 35% of total income before taxes compared to approximately 36% in 2005. The decrease is primarily due to the Company qualifying for certain manufacturing production activity deductions for its U.S. manufacturing facilities under Section 199 of the Internal Revenue Code. These deductions are now available to the Company as it has utilized all net operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties. The Company’s primary cash requirements are for operating expenses and capital expenditures.

Cash provided by operating activities totaled $11,948,000. Net income contributed $3,726,000 to operating cash flow. Non-cash deductions of depreciation and amortization contributed $3,410,000 to operating cash flow. In addition, the increase in the postretirement healthcare benefits liability of $1,816,000 is not a current cash obligation, and this item will not be a significant cash obligation until more retirees begin to utilize their retirement medical benefits. Changes in working capital increased cash provided by operating activities by $2,560,000. Changes in working capital primarily relate to collection of accounts receivable partially being offset by reductions in accounts payable and accrued liabilities due to payment timing differences.

Cash used for investing activities was $2,740,000 for the year ended December 31, 2007. Capital expenditures totaled $2,743,000, which was primarily related to equipment lease buyouts and the acquisition of machinery and equipment at production facilities. At December 31, 2007, commitments for capital expenditures in progress were $486,000. Capital expenditures for 2008 are anticipated to be $2,268,000, primarily related to the acquisition of machinery and equipment.

Financing activities reduced cash flow by $25,305,000. The primary financing activity was cash payments of $26,215,000 for the repurchase of Core Molding Technologies stock and related expenses on July 18, 2007 from Navistar. Additionally the Company has made principal repayments on its secured note payable of $1,286,000 and its industrial revenue bond of $530,000. Partially offsetting these payments were net borrowings on the line of credit of $2,252,000 and proceeds of $358,000 from the issuance of common stock from the exercise of 115,256 stock options and the related tax benefit of $116,000.

At December 31, 2007, the Company had no cash on hand and an available line of credit of $15,000,000 (“Line of Credit”), which is scheduled to mature on April 30, 2009. At December 31, 2007, Core Molding Technologies had outstanding borrowings on the Line of Credit of $2,252,000. Management expects these resources to be adequate to meet Core Molding Technologies’ liquidity needs.

As of December 31, 2007, the Company was in compliance with its two financial debt covenants for the Line of Credit and letter of credit securing the Industrial Revenue Bond and certain equipment leases. The covenants relate to maintaining certain financial ratios. Management expects Core Molding Technologies to meet these covenants for the year 2008. 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.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET TRANSACTIONS

The Company has the following minimum commitments under contractual obligations, including purchase obligations, as defined by the United States Securities and Exchange Commission (“SEC”). A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Other long-term liabilities are defined as long-term liabilities that are reflected on the Company’s balance sheet under accounting principles generally accepted in the United States. Based on this definition, the table below includes only those contracts which include fixed or minimum obligations. It does not include normal purchases, which are made in the ordinary course of business.

The following table provides aggregated information about contractual obligations and other long-term liabilities as of December 31, 2007.


	2008		2009 - 2010		2011 - 2012		2013 and after		Total
Debt	$	1,866,000	$	3,866,000	$	1,627,000	$	420,000	$	7,779,000
Line of credit		2,252,000		—		—		—		2,252,000
Interest		365,000		419,000		115,000		4,000		903,000
Operating lease obligations		604,000		941,000		11,000		—		1,556,000
Contractual commitments for capital expenditures		486,000		—		—		—		486,000
Postretirement benefits		489,000		934,000		1,396,000		13,623,000		16,442,000
Unrecognized tax benefit		24,000		—		—		—		24,000

Total	$	6,086,000	$	6,160,000	$	3,149,000	$	14,047,000	$	29,442,000

Interest is calculated based on adjusting the variable interest rate to the effective interest rate due to the swap agreements in place for both long-term borrowings. As of December 31, 2007, the Company had no off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss the Company’s 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 Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company had recorded an allowance for doubtful accounts of $334,000 at December 31, 2007 and $262,000 at December 31, 2006. Management also records estimates for chargebacks such as customer returns, customer rework chargebacks, discounts offered to customers, and price adjustments. Should these customer returns, chargebacks, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company has reduced accounts receivable for chargebacks of $1,576,000 at December 31, 2007 and $1,426,000 at December 31, 2006.

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 31st. Should actual results differ from the assumptions used to determine impairment, additional provisions may be required. In particular, decreases in future cash flows from operating activities below the assumptions could have an adverse effect on the Company’s ability to recover its long-lived assets. The Company has not recorded any impairment to goodwill for long-lived assets for the years ended December 31, 2007 and 2006.

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 worker’s compensation claims incurred but not reported at December 31, 2007, and 2006 of $1,141,000 and $1,036,000, respectively.

Post Retirement Benefits

Management records an accrual for postretirement 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. Core Molding Technologies recorded a liability for postretirement healthcare benefits based on actuarially computed estimates of $16,442,000 at December 31, 2007, and $16,107,000 at December 31, 2006.

Revenue Recognition

Revenue from product sales is recognized at the time products are shipped and title transfers. Allowances for returned products, chargebacks 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 Company’s balance sheet.

Income Taxes.

Management records a valuation allowance to reduce its deferred tax assets to the amount that it believes is more likely than not to be realized. The Company has considered future taxable income in assessing the need for a valuation allowance and has not recorded a valuation allowance due to anticipating it being more likely than not that the Company will realize these benefits.

An analysis is performed to determine the amount of the deferred tax asset that will be realized. Such analysis is based upon the premise that the Company is and will continue as 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. Management reviews all available evidence, both positive and negative, to assess the long-term earnings potential of the Company using a number of alternatives to evaluate financial results in economic cycles at various industry volume conditions. Other factors considered are the Company’s relationships with its two largest customers (Navistar and PACCAR), and the Company’s recent customer diversification efforts. The projected availability of taxable income to realize the tax benefits from net operating loss carryforwards and the reversal of temporary differences before expiration of these benefits are also considered. Management believes that, with the combination of available tax planning strategies and the maintenance of its relationships with its key customers, earnings are achievable in order to realize the net deferred tax asset of $7,799,000.

The deferred tax asset of $7,799,000 at December 31, 2007 primarily includes temporary differences relating to post-retirement and pension benefits of $5,842,000 and temporary differences between the book and tax basis of the Company’s property and equipment of approximately $425,000.

INFLATION

Inflation generally affects the Company by increasing the cost of labor, equipment, and raw materials. Due to the cost of crude oil and natural gas, raw material prices have increased and may continue to rise in 2008. These increases could have a significant impact on the future results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

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.

In February 2007, the FASB issued SFAS No. 159, Establishing the Fair Value Option for Financial Assets and Liabilities, to permit all entities to choose to elect to measure eligible financial instruments at fair value. SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with early adoption permitted for an entity that has also elected to apply the provisions of SFAS No. 157, Fair Value Measurements. An entity is prohibited from retrospectively applying SFAS No. 159, unless it chooses early adoption. Management is currently evaluating the impact of SFAS No. 159 on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R to improve the relevance, representational faithfulness, and comparability of information that a reporting entity provides in its financial reports regarding business combinations and its effects, including recognition of assets and liabilities, the measurement of goodwill and required disclosures. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 and earlier adoption is prohibited. Management is currently evaluating the impact of the provisions of SFAS No. 141R on the consolidated financial statements.

In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2 defers the effective date provision of SFAS 157. As a result of the issuance of FSP FAS 157-2, the provisions of SFAS 157 are effective for fiscal years beginning after November 15, 2008. Management is currently evaluating the impact of adopting SFAS 157 on the consolidated financial statements.

ITEM 7A. 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 (“IRB”) with a variable interest rate. Core Molding Technologies 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. Core Molding Technologies has an interest rate swap 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 operations at 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 effect on operating margins.

Assuming a hypothetical 10% change in short-term interest rates in both 2007 and 2006, interest expense would not change significantly for 2006, as the interest rate swap agreements would generally offset the impact and there was no balance on the revolving line of credit. In 2007, to support the purchase of treasury stock, Core Molding Technologies’ utilized the revolving line of credit which has a balance of $2,252,000 at December 31, 2007. The interest rate is impacted by LIBOR. A hypothetical 10% change in short-term interest rates in 2007 could impact the interest paid by the company, however, it would not have a material effect on earnings before tax.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Core Molding Technologies, Inc.
Columbus, Ohio

We have audited the accompanying consolidated balance sheets of Core Molding Technologies, Inc. and subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Core Molding Technologies, Inc. and subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 9 to the consolidated financial statements, effective January 1, 2006, the Company changed the manner in which it accounts for share-based compensation; in addition, as discussed in Note 11, the Company changed the manner in which it records the funded status of its postretirement health and life insurance benefits plans, effective December 31, 2006.


/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Columbus, Ohio
March 28, 2008

Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Income


	Years Ended December 31,
	2007			2006			2005
Net sales:
Products	$	101,045,056		$	150,173,598		$	124,909,485
Tooling		21,666,831			12,156,392			5,633,379

Total sales		122,711,887			162,329,990			130,542,864

Cost of sales		103,350,263			130,093,453			105,054,151
Postretirement benefits expense		2,393,642			2,367,602			2,213,622

Total cost of sales		105,743,905			132,461,055			107,267,773


Gross margin		16,967,982			29,868,935			23,275,091


Selling, general, and administrative expense		10,856,539			13,488,297			12,353,191
Postretirement benefits expense		542,221			524,889			528,147

Total selling, general, and administrative expense		11,398,760			14,013,186			12,881,338


Income before interest and income taxes		5,569,222			15,855,749			10,393,753

Interest income		542,167			645,120			226,202

Interest expense		(717,162	)		(488,310	)		(750,763	)


Income before income taxes		5,394,227			16,012,559			9,869,192

Income taxes:
Current		1,540,421			3,956,972			828,012
Deferred		127,333			1,644,940			2,755,124

Total income taxes		1,667,754			5,601,912			3,583,136


Net income	$	3,726,473		$	10,410,647		$	6,286,056


Net income per common share:
Basic	$	.43		$	1.03		$	0.63

Diluted	$	.41		$	1.00		$	0.60


Weighted average common shares outstanding:
Basic		8,686,905			10,078,800			9,913,209

Diluted		9,004,429			10,387,122			10,412,774

See notes to consolidated financial statements.

Core Molding Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets


	December 31,
	2007			2006
Assets
Current assets:
Cash	$	—		$	16,096,223
Accounts receivable (less allowance for doubtful accounts:
2007 - $334,000 and 2006 - $262,000)		12,469,502			22,456,177
Inventories:
Finished and work in process goods		3,333,119			2,793,993
Stores		5,011,291			4,598,983

Total inventories		8,344,410			7,392,976

Deferred tax asset		1,625,781			1,529,592
Foreign sales tax receivable		959,767			1,032,058
Income tax receivable		—			1,432,324
Prepaid expenses and other current assets		632,329			730,109

Total current assets		24,031,789			50,669,459

Property, plant, and equipment		59,906,910			56,927,053
Accumulated depreciation		(29,691,245	)		(26,389,062	)

Property, plant, and equipment — net		30,215,665			30,537,991

Deferred tax asset		6,173,514			6,916,348
Goodwill		1,097,433			1,097,433
Customer list/ Non-compete		87,629			138,814
Other assets		89,168			145,668


Total	$	61,695,198		$	89,505,713


Liabilities and Stockholders’ Equity
Current liabilities:
Current portion long-term debt	$	1,865,716		$	1,815,716
Notes payable line of credit		2,251,863			—
Accounts payable		8,537,895			10,735,295
Tooling in progress		102,419			1,179,684
Current portion graduated lease payments		—			70,373
Current portion of postretirement benefit liability		489,000			247,000
Accrued liabilities:
Compensation and related benefits		3,350,867			7,111,475
Interest payable		89,721			76,373
Taxes		23,221			—
Other		1,067,792			1,858,662

Total current liabilities		17,778,494			23,094,578

Long-term debt		5,913,563			7,779,279
Interest rate swaps		223,566			35,848
Graduated lease payments		—			41,050
Postretirement benefits liability		15,952,891			15,860,558

Total Liabilities		39,868,514			46,811,313

Commitments and Contingencies
Stockholders’ Equity:
Preferred stock — $0.01 par value, authorized shares - 10,000,000; outstanding shares: 2007 and 2006 - 0		—			—
Common stock — $0.01 par value, authorized shares - 20,000,000; outstanding shares: 2007 - 6,727,871 and 2006 - 10,204,607		67,279			102,046
Paid-in capital		22,614,127			21,872,723
Accumulated other comprehensive loss, net of income tax effect		(2,209,540	)		(3,019,315	)
Treasury stock		(26,179,054	)		—
Retained earnings		27,533,872			23,738,946

Total stockholders’ equity		21,826,684			42,694,400


Total	$	61,695,198		$	89,505,713

See notes to consolidated financial statements.

Core Molding Technologies, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
for the Years Ended December 31, 2007, 2006, and 2005


											Accumulated
	Common Stock										Other						Total
	Outstanding						Paid-In		Retained		Comprehensive			Treasury			Stockholders’
	Shares			Amount			Capital		Earnings		Income (Loss)			Stock			Equity

Balance at January 1, 2005		9,780,067		$	97,801		$	19,451,378	$	7,042,243	$	(314,536	)	$	—		$	26,276,886

Net Income										6,286,056								6,286,056
Hedge accounting effect of the interest rate swap, net of deferred income tax expense of $125,794												255,645						255,645

Comprehensive income																		6,541,701

Common shares issued from exercise of stock options		261,400			2,614			805,747										808,361
Tax effect from exercise of stock options								513,819										513,819

Balance at December 31, 2005		10,041,467			100,415			20,770,944		13,328,299		(58,891	)		—			34,140,767


Net Income										10,410,647								10,410,647
Hedge accounting effect of the interest rate swap, net of deferred income tax expense of $25,541												39,576						39,576

Comprehensive income																		10,450,223

Common shares issued from exercise of stock options		152,270			1,522			483,495										485,017
Tax effect from exercise of stock options								279,505										279,505
Restricted stock issued		10,870			109			89,821										89,930
Share-based compensation								248,958										248,958
Adoption of SFAS 158, net of deferred income tax benefit of $1,740,000												(3,000,000	)					(3,000,000	)

Balance at December 31, 2006		10,204,607			102,046			21,872,723		23,738,946		(3,019,315	)		—			42,694,400


Net Income										3,726,473								3,726,473
Hedge accounting effect of the interest rate swap, net of deferred income tax benefit of $63,824												(89,230	)					(89,230	)
Deferral of unrecognized net gain, net of tax expense of $485,096												730,005						730,005
Amortization of unrecognized net loss, net of tax expense of $98,041												169,000						169,000

Comprehensive income																		4,536,248

Common shares issued from exercise of stock options		115,256			1,153			357,071										358,224
Tax effect from exercise of stock options								116,139										116,139
Restricted stock issued		8,008			80			56,705										56,785
Share-based compensation								211,489										211,489
Cumulative impact of change in accounting for uncertainties in income taxes (FIN 48 - Note 10)										68,453								68,453
Purchase of Treasury stock		(3,600,000	)		(36,000	)									(26,179,054	)		(26,215,054	)

Balance at December 31, 2007		6,727,871		$	67,279		$	22,614,127	$	27,533,872	$	(2,209,540	)	$	(26,179,054	)	$	21,826,684

See notes to consolidated financial statements.

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows


	Years Ended December 31,
	2007			2006			2005
Cash flows from operating activities:
Net income	$	3,726,473		$	10,410,647		$	6,286,056

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,409,867			2,715,517			2,255,702
Deferred income taxes		127,332			1,644,804			2,755,124
Interest expense (income) related to ineffectiveness of swap		34,664			(3,401	)		7,746
Loss (Gain) on disposal of assets		(3,116	)		49,049			14,701
Share-based compensation		268,274			338,888			—
Amortization of gain on sale/leaseback transactions		—			(648,054	)		(453,554	)
Loss (Gain) on translation of foreign currency financial statements		7,826			27,814			(19,506	)
Change in operating assets and liabilities (net of effects from acquisition in 2005):
Accounts receivable		9,986,675			(176,589	)		(3,112,488	)
Inventories		(951,434	)		(97,955	)		(81,663	)
Prepaid expenses and other assets		170,072			(57,507	)		568,315
Accounts payable		(2,442,408	)		169,719			(2,697,636	)
Accrued and other liabilities		(4,202,820	)		935,226			794,198
Postretirement benefits liability		1,816,475			1,601,014			1,731,770

Net cash provided by operating activities		11,947,880			16,909,172			8,048,765


Cash flows from investing activities:
Purchase of property, plant, and equipment		(2,742,675	)		(9,226,312	)		(3,044,643	)
Proceeds from sale of property and equipment		3,116			10,563			65,000
Acquisition of Cincinnati Fiberglass, Inc.		—			—			(688,077	)
Proceeds from maturities on mortgage-backed security investment		—			—			88,239

Net cash used in investing activities		(2,739,559	)		(9,215,749	)		(3,579,481	)


Cash flows from financing activities:
Proceeds from issuance of common stock		358,224			485,017			808,361
Net borrowing on revolving Line of Credit		2,251,863			—			—
Tax effect from exercise of stock options		116,139			279,505			513,819
Payment of principal on bank note		(1,285,716	)		(1,285,716	)		(1,285,716	)
Payment of principal on industrial revenue bond		(530,000	)		(490,000	)		(450,000	)
Payments related to purchase of Treasury Stock		(26,215,054	)		—			—

Net cash used in financing activities		(25,304,544	)		(1,011,194	)		(413,536	)


Net increase (decrease) in cash and cash equivalents		(16,096,223	)		6,682,229			4,055,748

Cash and cash equivalents at beginning of year		16,096,223			9,413,994			5,358,246


Cash and cash equivalents at end of year	$	—		$	16,096,223		$	9,413,994

Cash paid during the year for:
Interest	$	627,873		$	578,300		$	668,709

Income taxes (net of tax refunds)	$	19,912		$	5,054,371		$	526,918

See notes to consolidated financial statements.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. Business Formation and Nature of Operations

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 4), produces reinforced plastic products by a spray-up open mold process and resin transfer molding (“RTM”) closed mold process utilizing multiple insert tooling (“MIT”). The Matamoros facility utilizes spray-up and hand lay-up open mold processes and resin transfer (“RTM”) closed molding utilizing the vacuum infusion 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.

The Company operates in one business segment as a compounder of sheet molding composites (“SMC”) and molder of fiberglass reinforced plastics. The Company produces and sells both SMC compound and molded products for varied markets, including light, medium, and heavy-duty trucks, automobiles and automotive aftermarket, personal watercraft, and other commercial products.

2. Summary of Significant Accounting Policies

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of all subsidiaries after elimination of all intercompany accounts, transactions, and profits.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition - Revenue from product sales is recognized at the time products are shipped and title transfers. Allowances for returned products, chargebacks 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 Company’s 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 December 31, 2007 the Company has recorded a net liability related to tooling in progress of $102,000, which represents approximately $4,738,000 of progress tooling billings and $4,636,000 of progress tooling expenses. At December 31, 2006 the Company had recorded a net liability related to tooling in progress of $1,180,000, which represents approximately $15,881,000 of progress tooling billings and $14,701,000 of progress tooling expenses.

Cash and Cash Equivalents - The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash is held primarily in one bank. At December 31, 2007 the Company had no cash on hand and book overdrafts in the amount of $2,945,000 which are recorded in accounts payable on the Consolidated Balance Sheet.

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 Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company had recorded an allowance for doubtful accounts of $334,000 at December 31, 2007 and $262,000 at December 31, 2006. Management also records estimates for chargebacks such as customer returns, customer rework chargebacks, discounts offered to customers, and price adjustments. Should these customer returns, chargebacks, discounts, and price adjustments fluctuate from the estimated amounts, additional allowances may be required. The Company has reduced accounts receivable for chargebacks of $1,576,000 at December 31, 2007 and $1,426,000 at December 31, 2006. There have been no material changes in the methodology of these calculations.

Inventories - Inventories are stated at the lower of cost (first-in, first-out) or market. The Company has recorded an allowance for slow moving and obsolete inventory of $294,000 at December 31, 2007 and $341,000 at December 31, 2006.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

Property, Plant, and Equipment – Property, plant, and equipment are recorded at cost. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The carrying amount of long-lived assets is evaluated annually to determine if adjustment to the depreciation period or to the unamortized balance is warranted.

Ranges of estimated useful lives for computing depreciation are as follows:


Land improvements		20 years
Building and improvements		20-40 years
Machinery and equipment		3-15 years
Tools, dies and patterns		3-5 years

Depreciation expense was $3,302,000, $2,613,000, and $2,158,000 for 2007, 2006, and 2005, respectively. In 2007, approximately $18,000 of interest cost was capitalized in property, plant, and equipment. In 2006 approximately $125,000 of interest cost was capitalized. No interest costs were capitalized in 2005.

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 31^st whether impairment exists. 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. For the years ended December 31, 2007, 2006, and 2005, there was no impairment of the Company’s long-lived assets.

Self-insurance – The Company is self-insured with respect to 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 worker’s compensation claims incurred but not reported at December 31, 2007, and 2006 of $1,141,000 and $1,036,000, respectively.

Fair Value of Financial Instruments – The Company’s financial instruments consist of long-term debt, an interest rate swap, accounts receivable, and accounts payable. The carrying amount of these financial instruments approximated their fair value.

Concentration of Credit Risk – The Company has significant transactions with two major customers (see Note 3), which together comprised 77%, 72%, and 63% of total sales in 2007, 2006, and 2005, respectively and 64% and 68% of the accounts receivable balances at December 31, 2007 and 2006, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition. The Company maintains reserves for potential bad debt losses, and such bad debt losses have been historically within the Company’s expectations. Export sales, including sales to Canada and Mexico, for products provided to certain customers’ manufacturing and service locations totaled 15%, 20%, and 20% of total sales for 2007, 2006, and 2005, respectively.

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 are computed similarly but include the effect of the assumed exercise of dilutive stock options and restricted stock under the treasury stock method.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

The computation of basic and diluted earnings per common share is as follows:


	Years Ended December 31,
	2007		2006		2005
Net income	$	3,726,473	$	10,410,647	$	6,286,056

Weighted average common shares outstanding		8,686,905		10,078,800		9,913,209
Plus: dilutive options assumed exercised		587,700		748,956		1,027,700
Plus: weighted average non-vested restricted stock		33,532		15,616		—
Less: shares assumed repurchased with proceeds from exercise		303,708		456,250		528,135

Weighted average common and potentially issuable common shares outstanding		9,004,429		10,387,122		10,412,774

Basic earnings per common share	$	.43	$	1.03	$	0.63
Diluted earnings per common share	$	.41	$	1.00	$	0.60

33,000 shares at December 31, 2007, 51,000 shares at December 31, 2006, and 5,000 shares at December 31, 2005 were not included in diluted earnings per share as they were anti-dilutive.

Research and Development – Research and development costs, which are expensed as incurred, totaled approximately $223,000 in 2007, $254,000 in 2006, and $360,000 in 2005.

Deferred Gain – Deferred gains resulted from sales leaseback transactions that occurred in 1997 and 1998 and were being amortized over the lease period.

Recent Accounting Pronouncements – 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, and will become effective for the Company on January 1, 2007. For benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The impact of the adoption of FIN 48 is discussed in Note 10.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 and earlier adoption is prohibited. Management is currently evaluating the impact of the provisions of SFAS No. 141R on the consolidated financial statements.

Foreign Currency Adjustments – In conjunction with the Company’s acquisition of certain assets of Airshield Corporation, the Company established operations in Mexico. The functional currency for the Mexican operations is the United States dollar. All foreign currency asset and liability amounts are remeasured into United States dollars at end-of-period exchange rates. Income statement accounts are translated at the monthly average rates. Gains and losses resulting from translation of foreign currency financial statements into United States dollars and gains and losses resulting from foreign currency transactions are included in current results of operations. Aggregate foreign currency translation and transaction (gains) losses included in Selling General and Administration totaled $5,975 in 2007, ($17,219) in 2006, and $90,131 in 2005.

3. Major Customers

The Company currently has two major customers, Navistar, Inc. (“Navistar”) formerly known as International Truck & Engine Corporation, and PACCAR, Inc. (“PACCAR”). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales. The loss of a significant portion of sales to Navistar, or PACCAR would have a material adverse effect on the business of the Company. In previous years the Company identified Freightliner, LLC (“Freightliner”) as a major customer; however, in 2007 Freightliner’s individual sales were less than ten percent of total sales.

The following table presents net sales for the above-mentioned customers for the years ended December 31, 2007, 2006, and 2005:


	2007		2006		2005
Navistar product sales	$	45,306,691	$	71,016,465		61,391,320
Navistar tooling sales		8,322,599		10,206,378		4,990,603

Total Navistar sales		53,629,290		81,222,843		66,381,923

PACCAR product sales		27,813,324		34,990,325		15,446,600
PACCAR tooling sales		12,518,169		1,232,015		65,484

Total PACCAR sales		40,331,493		36,222,340		15,512,084

Other product sales		27,925,041		44,166,808		48,071,565
Other tooling sales		826,063		717,999		577,292

Total other sales		28,751,104		44,884,807		48,648,857

Total product sales		101,045,056		150,173,598		124,909,485
Total tooling sales		21,666,831		12,156,392		5,633,379

Total sales	$	122,711,887	$	162,329,990	$	130,542,864

4. 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. The acquisition was part of the Company’s growth strategy. 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.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

The acquisition was recorded using the purchase method of accounting and, accordingly, the operating results of the Batavia facility have been included with those of the Company subsequent to August 3, 2005.

The following table presents the allocation of the purchase price:


Inventories	$	668,862
Property and Equipment		95,000
Non-compete agreement		5,000
Tooling accounts receivable		36,265

Total assets purchased		805,127

Accrued vacation assumed		(117,050	)

Net purchase price	$	688,077

5. Foreign Operations

In conjunction with the Company’s acquisition of assets of Airshield Corporation on October 16, 2001, the Company established manufacturing operations in Mexico (under the Maquiladora program). The Mexican operation is a captive manufacturing facility of the Company and the functional currency is United States dollars. Essentially all sales of the Mexican operation are made to United States customers in United States dollars, which totaled $18,800,000 in 2007, $28,737,000 in 2006, and $25,005,000 in 2005. Expenses are incurred in the United States dollar and the Mexican peso. Expenses incurred in pesos include labor, utilities, supplies and materials, and amounted to approximately 41% of sales in 2007, 33% of sales in 2006, and 31% of sales in 2005. The Company owns long-lived assets that are geographically located at the Mexican operation, which have a net book value of $956,000 at December 31, 2007. The Company’s manufacturing operation in Mexico is subject to various political, economic, and other risks and uncertainties inherent to Mexico. Among other risks, the Company’s Mexican operations are subject to domestic and international customs and tariffs, changing taxation policies, and governmental regulations.

6. Property, Plant, and Equipment

Property, plant, and equipment consist of the following at December 31:


	2007			2006
Land and land improvements	$	2,311,507		$	2,311,507
Buildings		20,257,248			20,140,860
Machinery and equipment		36,062,831			32,360,557
Tools, dies, and patterns		765,268			733,160
Additions in progress		510,056			1,380,969


Total		59,906,910			56,927,053
Less accumulated depreciation		(29,691,245	)		(26,389,062	)


Property, plant, and equipment – net	$	30,215,665		$	30,537,991

Additions in progress at December 31, 2007 and 2006 primarily relate to the purchase and installation of equipment at the Company’s operating facilities. At December 31, 2007 and 2006, commitments for capital expenditures in progress were $486,000 and $682,000, respectively.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

7. Debt and Leases


	December, 31
	2007			2006
Revolving line of credit, collateralized by all the Company’s assets.	$	2,251,863		$	—

Note Payable to bank, interest at a variable rate with monthly payments of interest and principal over a seven-year period through December 2010, collateralized by a security interest in all the Company’s assets.		3,964,279			5,249,995

Industrial Revenue Bond, interest adjustable weekly (2007 average 3.78%; 2006 average 3.60%), payable quarterly, principal due in variable quarterly installments through April, 2013, secured by a bank letter of credit with a balance of $3,930,000 as of December 31, 2007.		3,815,000			4,345,000

Total		10,031,142			9,594,995
Less current portion		(4,117,579	)		(1,815,716	)

Long-term debt	$	5,913,563		$	7,779,279

Note Payable – Bank

On December 30, 2003, the Company borrowed $9,000,000 in the form of a note payable collateralized by the Company’s assets. The note payable bears interest at a variable rate of LIBOR plus 200 basis points or the prime rate and this rate was 7.23% at December 31, 2007.

Industrial Revenue Bond

In May 1998, the Company borrowed $7,500,000 through the issuance of an Industrial Revenue Bond (“IRB”). The IRB bears interest at a weekly adjustable rate and matures in April 2013. The maximum interest rate that may be charged at any time over the life of the IRB is 10%.

As security for the IRB, the Company obtained a letter of credit from a commercial bank, which has a balance of $3,930,000 as of December 31, 2007. The letter of credit can only be used to pay principal and interest on the IRB. Any borrowings made under the letter of credit bear interest at the bank’s prime rate and are secured by a lien and security interest in all of the Company’s assets. The letter of credit expires in April 2010, and the Company intends to extend the letter of credit each year as required by the IRB.

Revolving Line of Credit

At December 31, 2007, the Company had available a $15,000,000 variable rate bank revolving line of credit scheduled to mature on April 30, 2009. The line of credit bears interest at LIBOR plus 200 basis points or at the prime rate. The line of credit is collateralized by all the Company’s assets. At December 31, 2007 there was a balance of $2,252,000 on the bank revolving line of credit. There was no outstanding balance on the bank revolving line of credit at December 31, 2006. The outstanding balance on the line of credit is not due until April 2009; however the Company anticipates paying off the balance within the next 12 months and therefore has classified the outstanding balance as a current liability on the Consolidated Balance Sheets.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

Annual maturities of long-term debt are as follows:


2008	$	4,118,000
2009		1,906,000
2010		1,960,000
2011		837,000
2012		790,000
Thereafter		420,000

Total	$	10,031,000

Interest Rate Swaps

In conjunction with its variable rate Industrial Revenue Bond, 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 recorded to interest expense. 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 matches 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.

Interest expense includes $28,000 of income in 2007, $26,000 of income in 2006, and $162,000 of expense in 2005 for settlements related to the swaps.

Bank Covenants

The Company is subject to formal debt covenants related to minimum fixed charge coverage and total funded obligations debt ratios. As of December 31, 2007, the Company was in compliance with these covenants.

Leases

The Company leases a portion of its manufacturing facilities, manufacturing equipment and a warehouse facility under operating lease agreements. During 2007 the Company purchased machinery and equipment amounting to $1,169,000 by exercising an early buyout option and as a result a gain of $49,000 was recognized from the reversal of a graduated lease payment liability.

In August 2005, in conjunction with the acquisition of the Cincinnati Fiberglass Division of Diversified Glass, Inc., Core Composites Cincinnati, LLC entered into a 7-year operating lease agreement through July 2012 for the manufacturing facility located in Batavia, Ohio. The Company has the option to terminate the lease effective any time after July 31, 2006, by providing written notice to the lessor no later than 90 days prior to intended termination date. The Company has the option to purchase the property at the end of every lease year.

In October 2001, in conjunction with the Airshield Asset Acquisition, the Company’s Mexican subsidiary entered into a 10-year operating lease agreement through October 2011 for a manufacturing facility in Matamoros, Mexico. The Company has an option to purchase the facility at any time during the first seven years. The Company may cancel the lease upon giving six months notice to the lessor.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

Total rental expense was $2,611,000, $3,892,000, and $4,195,000 for 2007, 2006, and 2005, respectively. The future minimum lease payments under non-cancelable operating leases that have lease terms in excess of one year are as follows:


2008	$	604,000
2009		603,000
2010		338,000
2011		11,000

Total minimum lease payments	$	1,556,000

8. Equity

Treasury Stock

On July 18, 2007, the Company entered into a stock repurchase agreement with Navistar, pursuant to which the Company repurchased 3,600,000 shares of the Company’s common stock, from Navistar in a privately negotiated transaction at $7.25 per share, for a total purchase price of $26,100,000. Navistar continues to be a significant stockholder of the Company’s common stock with 664,000 shares, or approximately 9.9% of the shares outstanding after the repurchase. Navistar is also the Company’s largest customer, accounting for approximately 44% of the Company’s 2007 sales. The Company used approximately $19 million of existing cash and $7.1 million from its revolving line of credit to fund the repurchase. The Company also incurred approximately $115,000 in costs related to the stock repurchase agreement, which are recorded as part of the cost of its treasury stock.

Anti-takeover Measures

The Company’s Certificate of Incorporation and By-laws contain certain provisions designed to discourage specific types of transactions involving an actual or threatened change of control of the Company. These provisions, which are designed to make it more difficult to change majority control of the Board of Directors without its consent, include provisions related to removal of Directors, the approval of a merger and certain other transactions as outlined in the Certificate of Incorporation and any amendments to those provisions.

Restrictions on Transfer

On July 16, 2007, the Board of Directors approved a Shareholders Rights Plan (the “Plan”) in conjunction with the approval of the repurchase of shares of stock from Navistar. The Plan was implemented to protect the interests of the Company’s stockholders by encouraging potential buyers to negotiate directly with the Board prior to attempting a takeover. Under the Plan, each shareholder will receive a dividend of one right per share of common stock of the Company owned on the record date, July 18, 2007. The rights will not initially be exercisable until, subject to action by the Board of Directors, a person acquires 15% or more of the voting stock without approval of the Board. If the rights become exercisable, all holders except the party triggering the rights shall be entitled to purchase shares of the Company at a discount. Each right entitles the registered holder to purchase from the Company a unit consisting of one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share. In connection with the adoption of the Rights Agreement, on July 18, 2007, the Company filed a Certificate of Designations of Series A Junior Participating Preferred Stock with the Secretary of State of the State of Delaware.

The Company’s Certificate of Incorporation contains a provision (the “Prohibited Transfer Provision”) designed to help assure the continued availability of the Company’s previous substantial net operating loss and capital loss carryforwards (see Note 10) by seeking to prevent an “ownership change” as defined under current Treasury Department income tax regulations. Under the Prohibited Transfer Provision, if a stockholder transfers or agrees to transfer stock, the transfer will be prohibited and void to the extent that it would cause the transferee to hold a “Prohibited Ownership Percentage” (as defined in the Company’s Certificate of Incorporation, but generally, means direct and indirect ownership of 4.5% or more of the Company’s common stock) or if the transfer would result in the transferee’s ownership increasing if the transferee had held a Prohibited Ownership Percentage within the three prior years or if the transferee’s ownership percentage already exceeds the Prohibited Ownership Percentage under applicable Federal income tax rules. The Prohibited Transfer Provision does not prevent transfers of stock between persons who do not hold a Prohibited Ownership Percentage.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

9. 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.

The options that have been granted under the 2006 Plan have vesting schedules of five or nine and one-half years from the date of grant, or immediately upon change in ownership, are not exercisable after ten years from the date of grant, and were 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 the individuals receiving the grants to maintain certain common stock ownership thresholds and vest over three years or upon the date of the participants’ sixty-fifth birthday, death, disability or change in control.

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 employee’s 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-K 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 123R 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. The total impact of adoption on results of operations, net of tax benefit, recorded in 2006 was $311,000 or $.03 per basic and diluted share.

Under APB No. 25 there was no compensation cost recognized for non-qualified stock options awarded in the year ended December 31, 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.


	Year Ended
	December 31,
	2005
Net income, as reported	$	6,286,056
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(264,813	)

Pro forma net income	$	6,021,243

Earnings per share:
Basic – as reported	$	0.63
Basic – pro forma	$	0.61
Diluted – as reported	$	0.60
Diluted – pro forma	$	0.58

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

Stock Options

There were no grants of options in the years ended December 31, 2007 and 2006. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average fair value of options granted during 2005 was $4.12. The fair value of the options granted in 2005 were estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk free interest rate of 4.37%, no expected dividend yield, expected lives of 8 to 10 years and expected volatility of 91%. Total compensation cost related to incentive stock options for the years ended December 31, 2007 and 2006 was $129,671 and $243,220, respectively. Compensation expense is allocated such that $96,687 and $186,151 is included in selling, general, and administrative expenses and $32,984 and $57,069 is recorded in cost of sales for the year ended December 31, 2007 and 2006, respectively. There was no tax benefit recorded for this compensation cost as the expense primarily relates to incentive stock options that do not qualify for a tax deduction until, and only if, a disqualifying disposition occurs.

During the year ended December 31, 2007, Core Molding Technologies received approximately $358,000 in cash from the exercise of stock options. The aggregate intrinsic value of these options was approximately $641,000. Tax benefits received as a result of disqualified dispositions were $116,000. During the year ended December 31, 2006, Core Molding Technologies received approximately $485,000 in cash from the exercise of stock options. The aggregate intrinsic value of these options was approximately $896,000. Tax benefits received as a result of disqualified dispositions, were $280,000. During the year ended December 31, 2005, Core Molding Technologies received approximately $808,000 in cash from the exercise of stock options. The aggregate intrinsic value of these options was approximately $1,448,000. Tax benefits received as a result of a disqualified dispositions were $514,000.

The following summarizes all stock option activity for the years ended December 31:


	2007					2006					2005
				Weighted					Weighted					Weighted
	Number			Average		Number			Average		Number			Average
	of			Exercise		of			Exercise		of			Exercise
	Options			Price		Options			Price		Options			Price
Outstanding — beginning of year		799,956		$	3.35		1,032,700		$	3.33		1,203,900		$	3.12
Granted		—			—		—			—		123,000			4.95
Exercised		(115,256	)		3.11		(152,270	)		3.19		(261,400	)		3.09
Forfeited		(64,000	)		3.96		(80,474	)		3.45		(32,800	)		2.80


Outstanding — end of year		620,700		$	3.33		799,956		$	3.35		1,032,700		$	3.33


Exercisable at December 31		458,350		$	3.28		493,176		$	3.23		514,625		$	3.18

The following summarizes the activity relating to stock options under the Original Plan mentioned above for the years ended December 31, 2007:


						Weighted
	Number			Weighted		Average		Aggregate
	of			Average		Remaining		Intrinsic
	Shares			Exercise Price		Contractual Term		Value
Outstanding at December 31, 2006		799,956		$	3.35
Exercised		(115,256	)		3.11			$	641,000
Granted		—			—
Forfeited		(64,000	)		3.96

Outstanding at December 31, 2007		620,700		$	3.33		6.32	$	2,316,000

Exercisable at December 31, 2007		458,350		$	3.28		6.13	$	1,731,000

Vested or expected to vest at December 31, 2007		613,062		$	3.33		6.56	$	2,288,000

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

The following summarizes the status of, and changes to, unvested options during the years ended December 31, 2007, 2006 and 2005:


				Weighted
	Number			Average
	Of			Grant Date
	Shares			Fair Value
Unvested at December 31, 2004		596,044		$	3.04
Granted		123,000			4.95
Vested		(168,172	)		3.10
Forfeited		(32,800	)		2.80

Unvested at December 31, 2005		518,072			3.49
Granted		—			—
Vested		(130,818	)		3.39
Forfeited		(80,474	)		3.45

Unvested at December 31, 2006		306,780			3.54
Granted		—			—
Vested		(83,930	)		3.36
Forfeited		(60,500	)		4.24

Unvested at December 31, 2007		162,350		$	3.46

At December 31, 2007, there was $282,000 of total unrecognized compensation cost, related to unvested stock options granted under the Original Plan expected to be recognized over a weighted average of 2.02 years.

The following table summarizes information about stock options outstanding and exercisable as of December 31, 2007:


	Options Outstanding						Options Exercisable
					Weighted
			Weighted		Average				Weighted
Range of	Number of		Average		Contractual Life		Number of		Average
Exercise Prices	Options		Exercise Price		In Years		Options		Exercise Price
$2.75		94,600	$	2.75		6.4		29,700	$	2.75
$3.21		436,100		3.21		6.1		391,450		3.21
$3.28 to $3.50		57,000		3.29		7.0		24,000		3.30
$6.40 to $7.98		33,000		6.64		7.9		13,200		6.64

		620,700	$	3.33				458,350	$	3.28

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements – (Continued)

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 and changes during the years ended December 31:


	2007					2006
				Weighted					Weighted
	Number			Average		Number			Average
	of			Grant Date		of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested balance at beginning of year		22,972		$	6.70		—		$	—
Granted		51,105			7.15		36,305			6.70
Vested		(8,008	)		7.09		(10,870	)		6.70
Forfeited		(4,653	)		6.70		(2,463	)		6.70

Unvested at end of year		61,416		$	7.02		22,972		$	6.70

Vested and expected to vest at December 31, 2007		77,223		$	6.98		32,675		$	6.70

As of December 31, 2007 there was $304,000 of total unrecognized compensation cost related to Restricted Stock granted. That remaining cost is expected to be recognized over the weighted-average period of 2.29 years. The total fair value of shares that vested during the years ended December 31, 2007 and 2006 was $57,000 and $96,000 and was recorded as selling, general, and administrative compensation expense.

10. Income Taxes

Components of the provision (credit) for income taxes are as follows:


	2007			2006			2005
Current:
Federal – US	$	1,606,000		$	3,284,000		$	494,000
Federal – Foreign		137,000			104,000			107,000
State and local		(202,000	)		569,000			227,000

		1,541,000			3,957,000			828,000

Deferred:
Federal		(142,000	)		1,655,000			2,065,000
State and local		269,000			(10,000	)		690,000

		127,000			1,645,000			2,755,000

Provision for income taxes	$	1,668,000		$	5,602,000		$	3,583,000

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

A reconciliation of the income tax provision based on the federal statutory income tax rate of 34% to the Company’s income tax provision for the years ended December 31 is as follows:


	2007			2006			2005
Provision at federal statutory rate – US	$	1,834,000		$	5,444,000		$	3,356,000
Effect of foreign taxes		(81,000	)		(81,000	)		(71,000	)
State and local tax expense, net of federal benefit		83,000			407,000			285,000
Federal manufacturing deduction		(98,000	)		(106,000	)		—
Other		(70,000	)		(62,000	)		13,000

Provision for income taxes	$	1,668,000		$	5,602,000		$	3,583,000

The American Jobs Creation Act provides a tax deduction calculated as a percentage of qualified income from manufacturing in the United States. The percentage increases from 3% to 9% over a six-year period beginning in 2005. The amount of the deduction available to the Company in 2005 was not significant, however the deduction taken in 2006 was $316,000 and the deduction is estimated to be $289,000 in 2007. In December 2004, the FASB issued a new staff position providing for this deduction to be treated as a special deduction, as opposed to a tax rate reduction in accordance with SFAS No. 109.

Certain tax benefits related to incentive stock options recorded directly to additional paid in capital totaled $116,000, $280,000 and $514,000 in 2007, 2006 and 2005, respectively.

Deferred tax assets (liabilities) consist of the following at December 31:


	2007			2006
Current Asset:
Accrued liabilities	$	674,000		$	736,000
Accounts receivable		672,000			572,000
Inventory		376,000			345,000
Other, net		(96,000	)		(124,000	)

Total current asset		1,626,000			1,529,000


Non-current asset (liability):
Property, plant, and equipment		425,000			1,295,000
Postretirement benefits		5,842,000			5,907,000
Interest rate swap		76,000			12,000
Other, net		(170,000	)		(298,000	)

Total non-current asset		6,173,000			6,916,000


Total deferred tax asset – net	$	7,799,000		$	8,445,000

At December 31, 2007, a provision has not been made for U.S. taxes on accumulated undistributed earnings of approximately $2,338,000 of the Company’s Mexican subsidiary that would become payable upon repatriation to the United States. It is the intention of the Company to reinvest all such earnings in operations and facilities outside of the United States.

On January 1, 2007, the Company adopted the provisions of FIN 48. As a result of the implementation of FIN 48, the Company recognized a $68,000 increase to the opening balance of retained earnings. This increase is represented by the recognition of state tax benefits of $212,000 and related accrued interest receivable of $16,000. These benefits generate a federal tax liability of $60,000. The Company also recorded a liability for unrecognized tax benefits of $52,000 and $48,000 related to uncertain state and foreign tax positions, respectively, and the amounts were recorded in accrued taxes in the Consolidated Balance Sheet.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

Below is a reconciliation of the change in unrecognized tax benefits recorded on Consolidated Balance Sheets from the January 1, 2007 FIN 48 adoption through December 31, 2007 is as follows:


Unrecognized Tax Benefits – Opening Balance	$	99,000
Settlement		(75,000	)

Unrecognized Tax Benefits – Ending Balance	$	24,000

As of December 31, 2007 the Consolidated Balance Sheets reflects a reduction of $75,000 in the liability for unrecognized tax benefits from the January 1, 2007 amount. The liability was reduced by $48,000 to offset a $65,000 payment made to settle a foreign tax case. The payment in excess of liability was recorded to income tax expense. The liability was also reduced by $28,000 due to collection of state tax claims. This amount was recorded to income tax expense. The remaining liability of $24,000 at December 31, 2007 relates to uncertain state tax positions and the entire amount if recognized would affect the effective tax rate.

There are no federal or state income tax audits in process. During the year ended December 31 2007, the Company recorded interest income of $9,000 from state tax refunds, which was coded to income tax expense. During the year ended December 31, 2006, the Company recorded no interest expense or penalties related to unrecognized tax benefits and no interest and penalties were accrued on the Consolidated Balance Sheets at December 31, 2006.

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 years before 2003 due to the expiration of the statute of limitations and is subject to income tax examinations by Mexican authorities since the Company began business in Mexico in 2001. The Company does not anticipate that the unrecognized tax benefits will significantly change within the next twelve months.

11. Postretirement Benefits

The Company provides postretirement benefits to some of its United States employees. Costs associated with postretirement benefits include postretirement health care and life insurance expense and expense related to contributions to two 401(k) defined contribution plans. In addition, all of the Company’s United States union employees are covered under a multi-employer defined benefit pension plan administered under a collective bargaining agreement. The Company does not administer this plan and contributions are determined in accordance with provisions in the negotiated labor contract.

Prior to the acquisition of Columbus Plastics, certain of the Company’s employees were participants in Navistar’s postretirement plan. In connection with the acquisitions the postretirement health and life insurance plan provides healthcare and life insurance for certain employees upon their retirement, along with their spouses and certain dependents and requires cost sharing between the Company, Navistar and the participants in the form of premiums, co-payments, and deductibles. The Company and Navistar share the cost of benefits for certain employees, using a formula that allocates the cost based upon the respective portion of time that the employee was an active service participant after the acquisition of Columbus Plastics to the period of active service prior to the acquisition of Columbus Plastics.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

The funded status of the Company’s postretirement health and life insurance benefits plan as of December 31, 2007 and 2006 and reconciliation with the amounts recognized in the consolidated balance sheets are provided below:


	Postretirement Benefits
	2007			2006
Change in benefit obligation:
Benefit obligation at beginning of year	$	16,107,000		$	15,081,000
Service cost		798,000			797,000
Interest cost		995,000			862,000
Unrecognized gain		(1,215,000	)		(519,000	)
Benefits paid		(243,000	)		(114,000	)

Benefit obligation at end of year	$	16,442,000		$	16,107,000


Plan Assets		—			—


Amounts recorded in other comprehensive income:	$	3,259,000		$	4,740,000


Weighted-average assumptions as of December 31:
Discount rate used to determine benefit obligation		6.50	%		5.60	%


Discount rate used to determine net periodic benefit cost		5.90	%		5.60	%

The components of expense for all of the Company’s postretirement benefits plans are as follows:


	2007		2006		2005
Pension Expense:
Multi-employer plan contributions	$	424,000	$	423,000	$	382,000
Defined contribution plan contributions		452,000		510,000		483,000

Total pension expense		876,000		933,000		865,000


Health and life insurance:
Service cost		798,000		797,000		901,000
Interest cost		995,000		862,000		737,000
Amortization of net loss		267,000		300,000		238,000

Net periodic benefit cost		2,060,000		1,959,000		1,876,000


Total postretirement benefits expense	$	2,936,000	$	2,892,000	$	2,741,000

Effective December 31, 2006, the Company adopted SFAS No. 158, which requires the recognition of the funded status of a defined benefit pension or postretirement plan in the consolidated statements of financial position. For the year ended December 31, 2007, the Company recognized net actuarial gains of $1,215,000 on the balance sheet. This amount was recorded as other comprehensive income in the amount of $730,000, net of tax, for the year ended December 31, 2007. Upon adoption at December 31, 2006 the Company recognized net actuarial losses of $4,740,000 on the balance sheet. This was recorded as other comprehensive loss in the amount of $3,000,000, net of tax.

The amount in accumulated other comprehensive loss expected to be recognized as a component of net periodic post retirement costs during 2008 consists of a net loss amortization of $128,000, or $82,000 net of tax.

The weighted average rate of increase in the per capita cost of covered health care benefits is projected to be 8%. The rate is projected to decrease gradually to 5% by the year 2013 and remain at that level thereafter. The comparable assumptions for the prior year were 8% and 5%, respectively.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

The effect of changing the health care cost trend rate by one-percentage point for each future year is as follows:


	1- Percentage		1-Percentage
	Point Increase		Point Decrease
Effect on total of service and interest cost components	$	365,000	$	(289,000	)
Effect on postretirement benefit obligation	$	2,597,000	$	(2,127,000	)

The estimated future benefit payments of the health care plan are:


Fiscal 2008	$	489,000
Fiscal 2009	$	424,000
Fiscal 2010	$	510,000
Fiscal 2011	$	625,000
Fiscal 2012	$	771,000
Fiscal 2013 – 2017	$	5,572,000

12. Related Party Transactions

In connection with the acquisition of Columbus Plastics, the Company and Navistar entered into a Supply Agreement. Under the terms of the Supply Agreement, Navistar agreed to purchase from the Company, and the Company agreed to sell to Navistar all of Navistar’s original equipment and service requirements for fiberglass reinforced parts using the Sheet Molding Compound process as they then existed or as they may be improved or modified. In October 2006, the Company renewed the Comprehensive Supply Agreement, which was effective as of November 1, 2006. Under this Comprehensive Supply Agreement, the Company is the primary supplier of Navistar’s original equipment and service requirements for fiberglass reinforced parts, as long as the Company remains competitive in cost, quality and delivery, through October 31, 2011.

In 1996, the Company acquired substantially all of the assets and liabilities of the Columbus Plastics unit from Navistar, in return for a secured note, which has been repaid, and 4,264,000 shares of Common Stock of the Company. On July 18, 2007, the Company entered into a stock repurchase agreement with Navistar, pursuant to which the Company repurchased 3,600,000 shares of common stock, from Navistar as detailed in Note 8 of the December 31, 2007 Form 10-K. At December 31, 2007, Navistar owns 9.9% of the Company’s outstanding common stock. Sales to Navistar were $53,629,000 in 2007, $81,223,000 in 2006 and $66,382,000 in 2005, of which $6,144,000 and $10,671,000 had not been received as of December 31, 2007 and 2006 and were included in accounts receivable. Receivables as of December 31, 2007 and 2006 also include $443,000 and $1,008,000 respectively, for tooling costs owed by Navistar.

13. Labor Concentration

14. Commitments and Contingencies

From time to time, the Company is involved in litigation incidental to the conduct of its business. However, the Company is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company’s consolidated financial position or results of operations.

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

15. Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2007 and 2006.


	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total Year
2007:
Product sales	$	30,650,936	$	24,685,106	$	23,744,611	$	21,964,403	$	101,045,056
Tooling sales		578,155		13,610,170		6,175,333		1,303,173		21,666,831

Net sales		31,229,091		38,295,276		29,919,944		23,267,576		122,711,887
Gross margin		4,825,686		4,605,074		4,079,067		3,458,155		16,967,982
Income before interest and taxes		1,734,103		1,817,912		1,292,471		724,736		5,569,222
Net income		1,212,770		1,266,133		717,182		530,388		3,726,473
Net income per common share:
Basic (1)	$	0.12	$	0.12	$	0.10	$	0.08	$	0.43
Diluted (1)	$	0.11	$	0.12	$	0.09	$	0.08	$	0.41

2006:
Product sales	$	35,354,658	$	38,425,961	$	38,854,393	$	37,538,586	$	150,173,598
Tooling sales		1,147,656		1,084,696		9,223,766		700,274		12,156,392

Net sales		36,502,314		39,510,657		48,078,159		38,238,860		162,329,990
Gross margin		6,828,571		7,846,899		8,292,674		6,900,791		29,868,935
Income before interest and taxes		3,652,100		3,946,030		4,547,151		3,710,468		15,855,749
Net income		2,281,906		2,503,027		2,937,775		2,687,939		10,410,647
Net income per common share:
Basic	$	0.23	$	0.25	$	0.29	$	0.26	$	1.03
Diluted (1)	$	0.22	$	0.24	$	0.28	$	0.25	$	1.00


(1)		Sum of the quarters do not sum to total year due to rounding.


ITEM 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


		Not applicable.

ITEM 9A(T). CONTROLS AND PROCEDURES

Disclosure 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 Company’s management, including its Chief Executive Officer and its Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were (i) effective to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act were accumulated and communicated to the Company’s 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 Company’s 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.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the Company’s financial statements would be prevented or detected.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's internal control over financial reporting based on the framework and criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2007.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes In Internal Controls

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.


ITEM 9B.		OTHER INFORMATION


		None.

PART III


ITEM 10.		DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this Part III, Item 10 is incorporated by reference from the Company’s definitive proxy statement for its annual meeting of stockholders to be held on or about May 14, 2008, which is expected to be filed with the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.


ITEM 11.		EXECUTIVE COMPENSATION

The information required by this Part III, Item 11 is incorporated by reference from the Company’s definitive proxy statement for its annual meeting of stockholders to be held on or about May 14, 2008, which is expected to be filed with the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.


ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Part III, Item 12 is incorporated by reference from the Company’s definitive proxy statement for its annual meeting of stockholders to be held on or about May 14, 2008, which is expected to be filed with the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.


ITEM 13.		CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Part III, Item 13 is incorporated by reference from the Company’s definitive proxy statement for its annual meeting of stockholders to be held on or about May 14, 2008, which is expected to be filed with the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.


ITEM 14.		PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Part III, Item 14 is incorporated by reference from the Company’s definitive proxy statement for its annual meeting of stockholders to be held on or about May 14, 2008, which is expected to be filed with the SEC pursuant to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Documents filed as Part of this Report:

(1)

Financial Statements

The following consolidated financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:

			Report of Independent Registered Public Accounting Firm

			Consolidated Statements of Income for the Years Ended December 31, 2007, 2006, and 2005

			Consolidated Balance Sheets as of December 31, 2007 and 2006

			Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2007, 2006, and 2005

			Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006, and 2005

			Notes to Consolidated Financial Statements

(2)

Financial Statement Schedules

The following consolidated financial statement schedules are filed with this Annual Report on Form10-K:

			Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2007, 2006, and 2005

			All other schedules are omitted because of the absence of the conditions under which they are required.

(3)

Exhibits

See Index to Exhibits filed with this Annual Report on Form 10-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

		By		/s/ Kevin L. Barnett

				Kevin L. Barnett
				President and Chief Executive Officer

Date: March 28, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


/s/ Kevin L. Barnett
Kevin L. Barnett	President, Chief Executive Officer, and Director	March 28, 2008

/s/ Herman F. Dick, Jr.
Herman F. Dick, Jr.	Vice President, Secretary, Treasurer, and Chief Financial Officer	March 28, 2008

*
Thomas R. Cellitti	Director	March 28, 2008

*
James F. Crowley	Director	March 28, 2008

*
Ralph O. Hellmold	Director	March 28, 2008

*
Malcolm M. Prine	Director	March 28, 2008

*By /s/ Herman F. Dick, Jr.
Herman F. Dick, Jr.	Attorney-In-Fact	March 28, 2008

Core Molding Technologies, Inc. and Subsidiaries

Schedule II

Consolidated valuation and qualifying accounts and reserves for the years ended December 31, 2007, 2006, and 2005.

Reserves deducted from asset to which it applies — allowance for doubtful accounts.


			Additions
	Balance at		Charged to		Charged to
	Beginning		Costs &		Other		Deductions		Balance At
	of Year		Expenses		Accounts		(A)		End of Year
Year Ended December 31, 2007	$	262,000	$	107,000		—	$	35,000	$	334,000

Year Ended December 31, 2006	$	214,000	$	120,000		—	$	72,000	$	262,000

Year Ended December 31, 2005	$	235,000	$	93,000		—	$	114,000	$	214,000


(A)		Amount represents uncollectible accounts written off.

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 RYMAC¹	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 and RYMAC	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 and RYMAC	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)


Exhibit No.	Description	Location
3(a)(3)	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]	Incorporated by reference to Exhibit 4(c) to Registration Statement on Form S-8 (Registration No. 333-29203)

3(a)(4)	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)(5)	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

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 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)

4(a)(3)	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]	Incorporated by reference to Exhibit 4(c) to Registration Statement on Form S-8 (Registration No. 333-29203)

4(a)(4)	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


Exhibit No.	Description	Location
4(a)(5)	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 Form 8-K filed July 19, 2007

10(a)	Supply Agreement, dated October 31, 2006 between Core Molding Technologies, Inc. and Core Composites Corporation and International Truck and Engine Corp.⁵	Incorporated by reference to Exhibit 10(b) to Annual Report on Form 10-K for the year ended December 31, 2006

10(b)	Supply and Management Agreement dated as of June 1, 2006 between PACCAR Inc. and Core Molding Technologies, Inc.⁵	Incorporated by reference to Exhibit 10(a) to Quarterly Report on Form 10-Q for the quarter ended June 30, 2007

10(c)	Registration Rights Agreement, dated December 31, 1996, by and between Navistar International Transportation Corp. and various other persons who become parties pursuant to the agreement	Incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K for the year ended December 31, 2001

10(d)	Loan Agreement, dated December 3, 1997, by and between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10(e) to Annual Report on Form 10-K for the year ended December 31, 2002

10(e)(1)	Amendment, dated March 29, 2001, to the Loan Agreement dated December 3, 1997 by and between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10(e)(1) to Annual Report on Form 10-K for the year ended December 31, 2002

10(e)(2)	Amendment, dated December 12, 2002, to the Loan Agreement dated December 3, 1997 by and between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10(e)(2) to Annual Report on Form 10-K for the year ended December 31, 2002

10(e)(3)	Loan Agreement, dated December 30, 2003, by and between Core Molding Technologies, Inc. and Key Bank National Association²	Incorporated by reference to Exhibit 10(e)(3) to Annual Report on Form 10-K for the year ended December 31, 2003

10(e)(4)	Second Amendment to Loan Agreement, Revolving Variable Rate Cognovit Promissory Note and Security Agreement, dated as of July 1 2007, between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10.1 to Form 8-K 7, filed July 19, 2007


Exhibit No.	Description	Location
10(f)	Master Equipment Lease Agreement³ by and between KeyCorp Leasing, a division of Key Corporate Capital, Inc. and Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 10(f) to Annual Report on Form 10-K for the year ended December 31, 2002

10(f)(1)	Amendment, dated March 26, 2001, to Master Equipment Lease Agreement³by and between KeyCorp Leasing, a division of Key Corporate Capital, Inc. and Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 10(f)(1) to Annual Report on Form 10-K for the year ended December 31, 2000

10(g)	Loan Agreement, dated April 1, 1998, by and between South Carolina Jobs — Economic Development Authority and Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 10(g) to Annual Report on Form 10-K for the year ended December 31, 2003

10(h)	Reimbursement Agreement, dated April 1, 1998, by and between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10(h) to Annual Report on Form 10-K for the year ended December 31, 2003

10(h)(1)	Amendment, dated March 29, 2001, to Reimbursement Agreement, dated April 1, 1998, by and between Core Molding Technologies, Inc. and Key Bank National Association	Incorporated by reference to Exhibit 10(h)(1) to Annual Report on Form 10-K for the year ended December 31, 2000

10(i)	Core Molding Technologies, Inc. Employee Stock Purchase Plan⁴	Incorporated by reference to Exhibit 4(e) to Registration Statement on Form S-8 (Registration No. 333-60909)

10(i)(1)	2002 Core Molding Technologies, Inc. Employee Stock Purchase Plan (as amended May 17, 2006)⁴	Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated May 23, 2006

10(j)	Letter Agreement Regarding Terms and Conditions of Interest Rate Swap Agreement between Key Bank National Association and Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 10(j) to Annual Report on Form 10-K for the year ended December 31, 2003

10(k)	2006 Core Molding Technologies, Inc. Long Term Equity Incentive Plan⁴	Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated May 23, 2006

10(l)	Core Molding Technologies, Inc. 2007 Cash Profit Sharing Plan⁴	Filed Herein

10(m)	Form of Amended and Restated Executive Severance Agreement between Core Molding Technologies, Inc. and certain executive officers ⁴	Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated January 4, 2008


Exhibit No.	Description	Location
10(n)	Form of Amended and Restated Restricted Stock Agreement between Core Molding Technologies, Inc. and certain executive officers ⁴	Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated January 4, 2008

10(o)	Form of Executive Severance Agreement between Core Molding Technologies, Inc. and certain executive officers⁴	Incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated May 23, 2006

10(p)	Form of Restricted Stock Agreement between Core Molding Technologies, Inc. and certain executive officers⁴	Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated May 23, 2006

10(q)	Stock repurchase agreement dated July 17, 2007 between International Truck and Engine Corp and Core Molding Technologies Inc.	Incorporated by reference to Exhibit 10(b) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2007

11	Computation of Net Income per Share	Exhibit 11 is omitted because the required information is included in the Notes to Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K

14	Code of Conduct and Business Ethics	Incorporated by reference to Exhibit 14 to Annual Report on Form 10-K for the year ended December 31, 2003

23	Consent of Deloitte & Touche LLP	Filed Herein

24	Powers of Attorney	Filed Herein

31(a)	Section 302 Certification by Kevin L. Barnett, President and Chief Executive Officer	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 March 28, 2008, pursuant to 18 U.S.C. Section 1350	Filed Herein

32(b)	Certification of Herman F. Dick, Jr., Vice President, Treasurer, Secretary, and Chief Financial Officer of Core Molding Technologies, Inc., dated March 28, 2008, pursuant to 18 U.S.C. Section 1350	Filed Herein


¹		The Asset Purchase Agreement, as filed with the SEC 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 SEC upon request.

²		The Loan Agreement filed with this Annual Report on Form 10-K, omits the exhibits (including Revolving Credit Note, Term Note, Security Agreement, Ohio Mortgage, South Carolina Mortgage, and Guaranty) and schedules. Core Molding Technologies, Inc. will provide any omitted exhibit to the SEC upon request.

³		The Master Equipment Lease, incorporated by reference in the Exhibits to this Annual Report on Form 10-K, omits certain schedules (including addendum to the schedules) which separately identify equipment subject to the Master Equipment Lease and certain additional terms applicable to the lease of such equipment. New schedules may be added under the terms of the Master Equipment Lease from time to time and existing schedules may change. Core Molding Technologies, Inc. will provide any omitted schedule to the SEC upon request.

⁴		Indicates management contracts or compensatory plans that are required to be filed as an exhibit to this Annual Report on Form 10-K.

⁵		Certain portions of this Exhibit have been omitted intentionally subject to a confidentiality treatment request. A complete version of the Exhibit has been filed separately with the Securities and Exchange Commission.