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CM

CORE MOLDING TECHNOLOGIES INC (CMT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $62.5M (down 15.3% YoY) with gross margin at 15.8% (up 100 bps YoY) and diluted EPS of $0.00; adjusted diluted EPS was $0.10, reflecting severance charges in the quarter .
  • Management guided FY 2025 net sales to be essentially flat YoY despite a ~$30M Volvo program phase-out, with H1 2025 down 5–10% and gross margin maintained in the 17–19% range; capex planned at $10–12M and tooling revenue expected at ~$30–40M, signaling a back-half ramp tied to new program launches and truck cycle recovery .
  • Record FY 2024 operating cash flow of $35.2M and free cash flow of $23.6M, strong liquidity of $91.8M and term debt/TTM Adjusted EBITDA of 0.64x underscore balance sheet resilience and capital deployment capacity (repurchased ~172K shares at $17.09) .
  • Catalysts: tooling ramp in 2025, anticipated truck cycle upturn in H2 2025–2026, commercial build-out under newly appointed CCO (Oct-2024) and potential strategic M&A; tariffs seen as pass-through items, reducing margin risk .

What Went Well and What Went Wrong

What Went Well

  • Margin stability despite lower volumes: Q4 gross margin rose to 15.8% vs 14.8% YoY; FY gross margin held 17.6% within the 17–19% target, aided by variable cost controls, raw material reductions, and pricing .
  • Cash generation and balance sheet strength: FY operating cash flow $35.2M, FCF $23.6M, liquidity $91.8M, term debt/TTM Adjusted EBITDA 0.64x; continued buybacks (172K shares at $17.09) .
  • Commercial momentum: ~$45M new wins in 2024 and ~$275M pipeline; initiatives include topcoat paint in Matamoros, SMC material sales, and entry into new verticals (construction turf mats, hospital bed frames) .

Quote: “Gross margin should remain between 17% and 19% for the full year [2025] even with the change in revenue mix to higher tooling sales.” — CFO John Zimmer .

What Went Wrong

  • Demand headwinds: Q4 product sales declined (truck and powersports weakness); Q4 operating income fell to $0.9M and bottom line turned to a slight loss; SG&A rose on severance and FX .
  • Volvo program transition: ~$30M FY 2025 revenue headwind necessitates offset via tooling and new programs; H1 2025 revenue guided down 5–10% .
  • Non-GAAP adjustments underscore underlying pressure: Q4 severance ($1.07M) and FX increased costs; adjusted EBITDA fell to $5.7M (9.2% margin) vs $7.1M (9.6%) YoY .

Financial Results

Sequential Trend (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Millions)$88.7 $73.0 $62.5
Gross Margin ($USD Millions)$17.7 $12.3 $9.9
Gross Margin (%)20.0% 16.9% 15.8%
Operating Income ($USD Millions)$7.5 $3.6 $0.9
Net Income ($USD Millions)$6.4 $3.2 $(0.04)
Diluted EPS ($USD)$0.73 $0.36 $0.00
Adjusted EBITDA ($USD Millions)$11.6 $7.5 $5.7
Adjusted EBITDA Margin (%)13.0% 10.3% 9.2%

YoY Comparison (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024
Net Sales ($USD Millions)$73.8 $62.5
Gross Margin ($USD Millions)$10.9 $9.9
Gross Margin (%)14.8% 15.8%
Operating Income ($USD Millions)$2.5 $0.9
Net Income ($USD Millions)$2.2 $(0.04)
Diluted EPS ($USD)$0.25 $0.00
Adjusted Diluted EPS ($USD)$0.30 $0.10
Adjusted EBITDA ($USD Millions)$7.1 $5.7
Adjusted EBITDA Margin (%)9.6% 9.2%

Estimates vs Actuals (Q4 2024)

MetricActualWall Street Consensus
Net Sales ($USD Millions)$62.5 N/A (consensus unavailable via S&P Global at time of writing)
Diluted EPS ($USD)$0.00 N/A (consensus unavailable via S&P Global at time of writing)
Adjusted Diluted EPS ($USD)$0.10 N/A (consensus unavailable via S&P Global at time of writing)

Segment/Product Sales Breakdown (Q4 2024)

MarketQ4 2024 Product Sales ($USD Millions)
Medium & Heavy-Duty Truck$34.2
Powersports$12.2
Building Products$2.7
Industrial & Utilities$6.3
All Other$4.6
Total Product Revenue$60.0

KPIs and Balance Sheet (FY 2024)

KPIValue
Operating Cash Flow ($USD Millions)$35.2
Free Cash Flow ($USD Millions)$23.6
Capital Expenditure ($USD Millions)$11.5
Liquidity ($USD Millions)$91.8
Cash & Equivalents ($USD Millions)$41.8
Term Debt ($USD Millions)$21.5
Debt / TTM Adjusted EBITDA (x)0.64x
ROCE (%)9.9%
ROCE ex-Cash (%)13.1%
Share Repurchases (FY)~172K shares at $17.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2025N/A“Essentially flat” YoY; H1 down 5–10%; ~$30M Volvo phase-out offset by higher tooling and new program revenueInitiated
Gross Margin (%)FY 2025N/A (2024 targeted 17–19%)17–19%Maintained range
Tooling Revenue ($)FY 2025N/A~$30–40MInitiated
Capex ($)FY 2025N/A~$10–12MInitiated
Tariff HandlingOngoingN/ATariff costs to be passed through to customers; mitigation where possiblePolicy clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Truck cycleNoted cyclical slowdown; ACT softer into 2025; strong rebound expected in 2026 Continued downturn; rebound expected H2’25–2026 H2’25 upturn expected; planning for 2026 peak Stabilizing; recovery setup
Volvo transitionBegins H2’24; ~$10M FY24 impact Transition in process, largest impact in 2025 ~$30M FY25 headwind; offset via tooling/new wins Headwind peaking in 2025
Sales/marketing transformationBuilding sales resources; pipeline >$250M; CCO search CCO appointed (Alex Bantz); pipeline >$270M Invest For Growth: wallet share, diversification, M&A; ~$45M wins Execution progressing
New products/verticalsLead gen; diversified wins Hospital bed frames; SMC; turf mats Turf protection mats; SMC material sales; medical Expanding adjacencies
Tariffs & supply chainMonitoring macro/consumer; no tariff detail No detailed tariff policy Clear pass-through surcharge and PO process; supplier coordination Risk mitigation enhanced
Capital allocationLiquidity $87.8M; buybacks (24K shares) Buybacks (~112K shares) Buybacks (~172K shares), M&A priority, balanced deployment Balanced; disciplined

Management Commentary

  • “Fiscal 2024 was another successful year... stabilize margins, even with lower sales... record operational cash flow of $35 million.” — CEO David Duvall .
  • “We expect full year 2025 net sales to be essentially flat... H1 down 5–10%... Volvo transition will reduce revenues by approximately $30 million... Gross margin should remain between 17% and 19%.” — CFO John Zimmer .
  • “Tooling revenue probably would be in the $30 million to $40 million range this year [2025]... it is an indicator of future new business.” — CFO John Zimmer .
  • “We are actively engaged in evaluating acquisitions and confident we will execute an acquisition this year.” — CEO David Duvall .

Q&A Highlights

  • Tariffs: Company pre-established surcharge processes to pass-through tariff costs as importer of record; coordinated supplier outreach; lessons learned from prior raw material inflation .
  • Margins and mix: Volvo exit helps margin mix; SMC material sales carry attractive margins with lower fixed cost burden; confident in maintaining 17–19% GM despite higher tooling mix .
  • Tooling ramp: Tooling revenue guided to ~$30–40M in 2025; heavier in Q3–Q4; strong indicator of FY 2026 product revenue ramp .
  • H2 2025 trajectory: Combination of truck rebound, new program product launches, and tooling activity expected to drive second-half improvement; product revenue ramps after tooling validation .
  • Capital allocation: Continued share repurchases alongside organic growth and selective M&A; disciplined approach to acquisition pipeline .

Estimates Context

  • Wall Street consensus estimates via S&P Global (EPS and revenue) for Q4 2024 were unavailable at the time of writing; therefore, formal beat/miss analysis versus consensus could not be performed. The analysis above references company-reported actuals and management guidance only. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Expect a transitional FY 2025: H1 revenue down 5–10% from Volvo phase-out, with H2 improvement on truck cycle and program launches; monitor quarterly tooling bookings as leading indicators for 2026 .
  • Margin durability is intact: 17–19% GM guidance maintained despite mix shift; SMC material sales and pricing discipline support resilience; watch SG&A normalization post severance .
  • Strong cash and low leverage enable optionality: $91.8M liquidity, 0.64x debt/TTM EBITDA, record $35.2M CFO—supports balanced buybacks, capex, and tuck-in M&A .
  • Commercial execution is the swing factor: ~$45M 2024 wins and ~$275M pipeline under new CCO; wallet-share expansion with blue-chip customers and diversification into construction/medical are central to the growth narrative .
  • Tariff strategy reduces surprise risk: pass-through surcharge processes and supplier coordination lower margin risk from policy volatility; monitor customer demand sensitivity across US/MX/CA footprints .
  • Trading implications: Near-term softness likely in H1 2025; improving visibility via tooling revenue and truck indicators (ACT) into H2; shares may react to M&A announcements, large program awards, or visible tooling inflections .
  • Medium-term thesis: Reacceleration in 2026 on truck peak and program ramps, supported by margin stability and disciplined capital deployment; execution on M&A and commercial build-out will be key to multiple expansion .