On Wednesday, Core Molding Technologies, Inc. (NYSEMKT:CMT) released its 2015 annual report for the year ending December 31, 2015. The company announced record sales totalling $199 million, a 14% increase from the $175 million reported for the previous corresponding period.
- Net sales were $199.1 million compared to $175.2 million
- Product sales were $189.1 million compared to $169.7 million
- Gross margin was 18.2% compared to 17.2%
- Operating income was $18.5 million compared to $14.6 million
- Net income was $12.1 million, or $1.58 per diluted share, compared with $9.6 million, or $1.28 per diluted share
This is welcome news for Core Molding, whose share price was down almost 48% prior to the announcement.
About Core Molding
Core Molding is a manufacturer of sheet molding compound (SMC) and molder of fiberglass reinforced thermoset and thermoplastic materials. The company specializes in large-format moldings and offers a wide range of fiberglass processes, including compression molding of SMC, glass mat thermoplastics (GMT) and bulk molding compounds (BMC); compression and transfer molding of direct long-fiber thermoplastics (D-LFT); spray-up, lay-up, resin transfer (RTM) and vacuum resin transfer molding (V-RTM).
Core Molding serves a wide variety of markets, including the medium and heavy-duty truck, marine, automotive, agriculture, construction and other commercial products markets.
Headquartered in Columbus, Ohio, the company maintains plants in Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota; and Matamoros, Mexico.
“We achieved record sales, net income and earnings per share in 2015,” stated Kevin L. Barnett, President and Chief Executive Officer of Core Molding. “Our strong year-over-year sales growth was due, in part, to the launch of several new programs with existing customers as well as an overall increase in customer demand.”
“Additionally, our March 2015 acquisition of CPI Binani provided us with new production capabilities in direct long-fiber thermoplastics, along with new customers in several industries and incremental revenue. We generated record net income as a result of the overall sales increase and an improvement in profitability which pushed net income as a percent of sales to 6.1% in 2015 compared to 5.5% in 2014.”
“While the second half of 2015 was impacted by a slowdown in demand by our truck customers, we still managed to produce solid overall results in the fourth quarter.”
Mr. Barnett continued, “Looking at full year 2016, industry sources forecast a decline in production of Class 8 trucks of approximately 20%, which represents a relatively moderate down-cycle compared to the slowdowns experienced in the past two decades.”
“While truck sales continue to represent more than 75% of our total sales, we expect our increasing end market diversification efforts, aided by our CPI Binani acquisition, along with other strategic investments we have made in new process offerings, to partially offset the impact of the truck production slowdown.”
“Over the long term, we believe we are well positioned to deliver profitable growth as we continue to diversify our markets, materials and processes and drive operational enhancements.”
Core Molding currently sits at #13 in the Small and Micro Cap Screen here at The Acquirer’s Multiple. The company has an enterprise value of $96 million and operating earnings of $19 million. This gives it an Acquirer’s Multiple of 5.13. The company currently trades on a P/E of 7.38, and has a FCF/EV ratio of 13%.
Core Molding is good news for contrarian investors!
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