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CM

CORE MOLDING TECHNOLOGIES INC (CMT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $79.2M (+6.3% q/q; -10.7% y/y) and diluted EPS was $0.47, with gross margin held at 18.1% amid weaker truck and powersports demand and higher tooling mix .
  • Against S&P Global consensus, CMT delivered a modest beat: revenue $79.24M vs $75.46M*, and EPS $0.47 vs $0.46*; coverage remains thin (one estimate), limiting signal strength *.
  • Management reiterated full-year gross margin framework (17–19%) and guided H2 2025 y/y sales declines to a manageable 4–6%, citing phase-out of a truck program and persistent demand weakness; free cash flow was $5.2M for 1H25 and liquidity stood at $93.2M .
  • Strategic catalysts: $47M new business wins YTD; a $25M Mexico capacity investment to support Volvo Mexico programs launching Q1 2027 (anticipated $150M revenue over 7–10 years), plus ongoing buybacks (88,207 shares at $15.07 in Q2) .

Estimates disclaimer: Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Gross margin resilience within the 17–19% range despite softer demand and adverse mix; CFO: “we held gross margins in our projected range of 17% to 19%” .
  • Strong liquidity and cash generation: 1H25 cash from operations $9.6M and free cash flow $5.2M; total liquidity $93.2M (cash $43.2M, undrawn facilities $50M) .
  • Strategic growth execution: $47M new business wins YTD; Mexico expansion ($25M) supporting Volvo programs expected to contribute ~$150M revenue over 7–10 years; CEO emphasized progress in “Invest For Growth” strategy .

What Went Wrong

  • Top-line and margin pressure y/y: revenue down 10.7%; operating margin compressed to 6.6% (from 8.4% y/y) as fixed-cost leverage softened with volume, and product mix shifted toward lower-margin tooling .
  • End-market weakness: truck and powersports demand “persistent,” compounded by phase-out of a truck program; truck and powersports represent ~75% of total revenue, heightening exposure to downturns .
  • Adjusted EBITDA margin fell y/y (12.0% vs 13.0%) with unfavorable fixed-cost leverage (-220 bps) and operational efficiencies/product mix (-90 bps), only partially offset by price/raw material tailwinds (+120 bps) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$88.743 $61.447 $79.239
Diluted EPS ($)$0.73 $0.25 $0.47
Gross Margin %20.0% 19.2% 18.1%
Operating Income ($USD Millions)$7.489 $2.839 $5.214
Operating Margin %8.4% 4.6% 6.6%
Adjusted EBITDA ($USD Millions)$11.563 $7.164 $9.544
Adjusted EBITDA Margin %13.0% 11.7% 12.0%
Segment/Product Sales by Market ($USD Thousands)Q2 2024Q2 2025
Medium & heavy-duty truck$46,841 $31,246
Powersports$20,902 $14,208
Building products$5,429 $4,671
Industrial & utilities$4,175 $5,874
All other$6,609 $5,634
Net product revenue$83,956 $61,633
KPIsQ2 2025
Cash and Equivalents ($USD Millions)$43.212
Total Liquidity ($USD Millions)$93.2
Term Debt ($USD Millions)$20.611
Cash from Operations (1H25, $USD Millions)$9.594
Free Cash Flow (1H25, $USD Millions)$5.207
ROCE (TTM) %7.2%
ROCE excl. cash (TTM) %9.6%
Shares repurchased (Q2)88,207 @ $15.07
YTD shares repurchased151,584 @ $14.82
Results vs Estimates (Q2 2025)Consensus*ActualSurprise
Revenue ($USD Millions)$75.46*$79.24 +$3.78M / +5.0%*
EPS ($)$0.46*$0.47 +$0.01 / +2.2%*
# of Estimates1*——

Non-GAAP note: Q2 2025 adjusted net income $4.588M and adjusted diluted EPS $0.53 include add-backs for severance ($0.48M pre-tax; $0.04 per share net-of-tax) and footprint optimization ($0.20M pre-tax; $0.02 per share net-of-tax) .

Estimates disclaimer: Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Margin %FY 202517–19% range 17–19% range reiterated Maintained
Sales OutlookH2 2025FY25 “flat” (offsetting ~$30M Volvo phase-out with tooling/new wins) H2 y/y decline 4–6% (manageable) Updated/clarified (more specific H2 view)
Sales MixFY 2025Higher tooling revenue mix expected Higher tooling mix reiterated; margin pressure vs product sales Maintained
CapexFY 2025$10–12M $10–12M plus $8–10M of the $25M Mexico investment by YE25 (total $25M over ~18 months) Raised incremental investment
Share RepurchasesOngoingOpportunistic buybacks; ~$2M in 2025 to date Continued buybacks; 88,207 shares @ $15.07 in Q2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Demand/Truck CycleExpect second-half 2025 upturn; regulation changes into 2027; FY25 flat due to ~$30M Volvo phase-out Softer first half; recovery expected in second half; truck scenarios highly uncertain H2 y/y decline 4–6% framed as manageable; continued end-market weakness in truck/powersports Cautious/Stable
Tooling MixHigher tooling revenue expected in 2025 impacting margins Sales mix meaningfully impacted by higher tooling in 2025; lower GM than product Tooling mix continues to pressure gross margin vs product sales Persistent headwind
Invest For Growth$45M new wins in 2024; pipeline ~$275M; diversification focus $15M new wins in Q1; SMC material agreements accelerate quote-to-cash $47M new wins 1H25; diverse end-markets (building products, EV-transportation, aerospace, powersports) Strengthening
Mexico Expansion/VolvoNot specifiedLiquidity supports organic/inorganic growth; ~ $45M cash reserves $25M investment (Matamoros expansion; Monterrey new plant with DCPD & paint); Volvo Mexico launch Q1 2027 (~$150M over 7–10 yrs) New capacity/capabilities
Capital AllocationStrong FY24 FCF; ROCE 9.9%, 13.1% excl. cash Cash supports growth priorities; buybacks opportunistic Liquidity $93.2M; term debt/TTM adj EBITDA <1x; ongoing repurchases Balance sheet strength
M&A/StrategicPursuing M&A to expand channels/footprint/processes Continued focus on strategic initiatives Commentary focused on organic investment; M&A not updated On hold/secondary
Macro/TariffsMacro uncertainty; tariffs noted as risk Monitoring trucking scenarios; macro/political uncertainties Forward-looking caution maintained Unchanged risk backdrop

Management Commentary

  • CEO David Duvall: “I am proud of our team’s disciplined execution in our ability to maintain gross margins… We have won $47 million in new incremental business… new programs will launch over the next two years… including building products, EV - transportation, aerospace, and powersports” .
  • CEO on Mexico: “We are investing $25 million… expansion of our Matamoros plant and a new plant and equipment in Monterrey… adds DCPD molding and paint capabilities… These are long-term programs which we anticipate will provide revenues of $150 million over the next seven to ten years” .
  • CFO Alex Panda: “Similar to the first quarter, the majority of the sales declines resulted from the previously announced truck program phase-out… Despite pressure on fixed cost leverage and sales mix this quarter, we held gross margins in our projected range of 17% to 19%” .
  • CFO on outlook: “We expect year-over-year sales comparisons to improve, with projected sales moderating to a manageable 4% to 6% decline range in the second half… higher tooling sales… pressured gross margins compared to product sales” .

Q&A Highlights

  • The Q2 2025 earnings call was scheduled for 10:00 a.m. ET on Aug 5; a replay/webcast link was provided. However, the full transcript was not available in the document set at the time of this analysis, so Q&A highlights are unavailable .

Estimates Context

  • Q2 2025 delivered modest beats vs S&P Global consensus: revenue $79.24M vs $75.46M* (+5.0%), EPS $0.47 vs $0.46 (+2.2%); only one estimate in each, suggesting limited coverage and lower statistical confidence .
  • Forward consensus (thin coverage) indicates expected sequential revenue moderation in Q3–Q4 with EPS normalizing into the mid- to low-40¢ range amid mix headwinds, before potential 2026 uplift with program launches; this may adjust as H2 demand clarity improves*.

Estimates disclaimer: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Operational execution supported margins in a soft demand environment; adjusted EBITDA margin at 12.0% highlights cost discipline despite mix headwinds .
  • Near-term revenue trajectory remains pressured (H2 4–6% y/y decline), but the mix of new wins ($47M YTD) positions 2026–2027 for growth; watch conversion timelines and margin profile of these programs .
  • Mexico investments ($25M) add capacity and DCPD/paint capabilities closer to customers; Volvo Mexico program (launch Q1 2027) indicates multi-year revenue visibility (~$150M over 7–10 years) .
  • Strong liquidity ($93.2M) and sub-1x term debt/TTM adj EBITDA provide flexibility for organic growth and opportunistic buybacks; FCF positive in 1H25 despite slower demand .
  • Mix shift toward tooling is a durable headwind for gross margin; expect non-GAAP adjustments (severance/footprint optimization) to normalize as footprint work completes .
  • Trading lens: modest estimate beats, conservative H2 framing, and visible long-term growth catalysts (Mexico/Volvo, diversification) could support the stock on pullbacks; monitor truck/powersports demand inflection and pace of new program ramps .

Financials and commentary sourced from company 8‑K and press releases . Estimates from S&P Global.*