Core Molding Technologies (CMT) 16th Annual Midwest Ideas Conference summary

Strategic transformation and operational turnaround

• Focused on internal execution and leadership engagement to drive cultural and operational turnaround, reducing employee turnover to under 6% and stabilizing the business after emerging from bank default in 2019.

• Implemented a 'fix or get out' approach, raising prices to market levels and exiting unprofitable programs, which led to regaining lost business and improving gross margins, especially in 2022-2023.

• Diversified revenue streams, reducing truck market exposure from 92% to 54% over seven years, and expanded into power sports, building products, industrial, and utilities.

• Invested in sales and business development teams to support growth and customer diversification.

Market leadership, innovation, and product expansion

• Holds 87% market share in personal watercraft and 30% in the truck market, with high barriers to entry due to capital-intensive equipment and proprietary processes.

• Developed proprietary SMC formulations and expanded SMC production capacity, now selling externally as a new revenue stream with a $200 million addressable market.

• Introduced top coat paint capabilities to capture new markets, such as construction and agriculture, and launched innovative composite solutions for various industries.

• Won a $150 million, nine-year Volvo contract, prompting a $25 million investment in new and expanded facilities in Monterrey and Matamoros, Mexico.

Financial performance and capital allocation

• Maintains a strong balance sheet with $40 million in cash, $20 million in debt, and a $50 million credit line, supporting organic growth, M&A, and shareholder returns.

• Achieved 14%-16% return on capital targets over the past two years, with $52 million in free cash flow generated over three years and capacity for $425-$475 million in sales.

• Authorized $7.5 million in share buybacks, with $2.5 million remaining and plans to renew authorization.

• Long-term goals include reaching $500 million in revenue, 8%-10% operating income, and sustaining 14%-16% return on capital within three to five years.