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Jun 30, 2022
Core Molding Q2 2022 Earnings Report
Reported record quarterly sales and faced gross margin pressures due to product mix shifts and inflation.
Key Takeaways
Core Molding Technologies reported record quarterly sales of $98.7 million, a 23% increase year-over-year. However, gross margins were impacted by product mix shifts, production inefficiencies, and inflation, leading to a decrease in operating income and net income compared to the prior year.
Net sales increased by 22.7% to $98.7 million compared to the prior year.
Raw material cost recoveries were approximately $7.8 million, representing 7.9% of net sales.
Operating income decreased to $4.4 million, or 4.4% of net sales, compared to $6.2 million in the prior year.
Net income decreased to $2.2 million, or $0.26 per diluted share, compared to $4.1 million in the prior year.
Core Molding
Core Molding
Forward Guidance
The Company has planned 2022 capital expenditures of approximately $20 million. Expenditures for automation and the addition of three presses in the direct long fiber and structural foam processes will provide added capacity to allow the Company to meet its current demand and to add new business.
Positive Outlook
- Major programs are ramping up throughout 2022.
- New business wins continue to be the primary growth driver.
- An extension of Volvo supply agreement through 2027.
- The new terms will provide a financial benefit starting in the third quarter of 2022.
- Demand remains strong which allows sales team to be more selective on new business opportunities.
Challenges Ahead
- Gross margins were impacted by inflationary pressures recoveries.
- Operating inefficiencies driven by high demand and product mix shift.
- Impact of the coronavirus (COVID 19) global pandemic on our business.
- Fluctuations in foreign currency exchange rates.
- Risk of cancellation or rescheduling of orders.