COLUMBUS, Ohio, May 11, 2020 /PRNewswire/ -- Core Molding Technologies, Inc. (NYSE American: CMT) ("Core Molding", "Core" or the "Company") today announced results for the first quarter ended March 31, 2020.
The Company had net income of $8.0 million in the first quarter of 2020 compared to a net loss of $3.8 million for the first quarter of 2019.
"The turn-around phase of Core Molding is complete and we are now focusing our efforts on continuous improvement and profitable growth," said David Duvall, President and Chief Executive Officer. "Our immediate focus is on providing a safe work environment for our employees and supporting our local communities in getting through the COVID-19 pandemic by producing personal protective equipment. How we treat people and customers during this difficult time will be how we are remembered. We expect to come out of the pandemic stronger than when it started. I especially want to thank all of our employees for their contributions and dedication throughout this challenging time," Duvall continued.
Sales declined in the first quarter of 2020, due to the industry demand decline in North American heavy-duty trucks. Based on industry analysts' estimates, the North American heavy-duty truck industry production decreased approximately 28% in the first quarter of 2020 compared to the same period in the prior year. Net sales decreased $8.2 million or 11.4% for the first quarter of 2020 compared to the same period last year. Product sales, excluding tooling sales, decreased $9.5 million or 13.3% for the first quarter of 2020 compared to the first quarter of 2019.
First Quarter 2020 Compared to First Quarter 2019:
Net sales were $64.0 million compared to $72.3 million.
Product sales were $61.9 million compared to $71.5 million.
Gross margin was 16.8% compared to 4.4%.
Selling, general and administrative expenses were $6.5 million compared to $7.2 million.
Operating income was $4.3 million compared to operating loss of $4.0 million.
Net income was $8.0 million, or $0.97 per diluted share, compared with net loss of $3.8 million, or $0.49 per diluted share.
Cash flow from operations was $5.4 million compared to $2.9 million.
First quarter 2020 gross margin improved by 3.8 times or 282% compared to first quarter of the prior year. Significantly improved operational performance, reduced selling, general and administrative expenses and a $5.6 million favorable impact from the utilization of a fully reserved tax net operating loss allowed the company to achieve a net income of $8.0 million for the quarter. Excluding the net operating loss benefit, net income would have been $2.3 million or $.0.28 per share for the first quarter. "We are now seeing the results in the overall operating performance, as our integrated operational systems begin working together to create flow and eliminate daily disruptions," said Eric Palomaki, Executive Vice President of Operations. "The improvement in financial performance was driven by sustained productivity improvements, across the organization, that we have been relentlessly focused on improving throughout the turnaround. It is a clear picture showing that we are now running a profitable business. It has taken a lot of work by all of us to make this happen and I want to thank the entire team for bringing Core back to profitability," said John Zimmer, Chief Financial Officer. "It is both rewarding and exciting to see the winning culture that has been created at Core. We are building a strong employer brand that will help us retain and hire highly qualified team members," said Renee Anderson, Executive Vice President of Human Resources.
Financial Position at March 31, 2020:
Total assets of $174.7 million.
Total debt of $44.2 million.
Stockholders' equity of $90.7 million.
The Company's debt to equity ratio is 49%. During the first quarter 2020 the Company reduced its outstanding debt by $5.3 million. The Company is currently in default of its credit facility as a result of not achieving certain financial covenant requirements. The Company is operating under a forbearance agreement that extends through May 29, 2020. The Company continues to seek refinancing alternatives, although the impact of COVID-19 and the resulting economic uncertainty due to the pandemic have delayed the Company's ability to complete a refinancing. The Company and its current lenders intend to extend the forbearance period to allow the Company to complete its refinancing once the immediate impacts of COVID-19 subside.