Skip to content
    CMT
    Earnings call· Jun 2026(Q2 FY26)

    CORE MOLDING TECHNOLOGIES Q2 FY26 earnings call CMT

    Aug 4, 2026 Source

    Executive summary

    Core Molding Technologies Q2 FY26 — Diversified Growth Offsets Trucking Headwinds

    Core Molding Technologies delivered solid Q2 FY26 results, with strong growth in diversified end markets largely offsetting continued softness in the trucking sector. The company is executing on its 'Invest for Growth' strategy, securing significant new business awards and making strategic investments in its Mexico operations. Management remains confident in its long-term outlook, driven by a robust project pipeline and a strong balance sheet, positioning the company for future growth and market diversification.

    Highlights

    5

    • Secured nearly $26 million in net new business awards in H1 FY26, on track for $50 million full-year objective.

    • Non-trucking production sales increased 20.8% year-over-year, driven by powersports (+7%) and building products (+36%).

    • Achieved gross margin of 20.3% (19.4% excluding one-time capacity charge), at the high end of the 17%-19% target range.

    • Maintained strong operational performance with 99.2% on-time delivery and 49 parts per million quality.

    • Ended the quarter with $12.1 million in cash and no outstanding debt, with increased debt capacity to $100 million.

    Concerns

    4

    • Production sales declined 1.2% year-over-year due to a 23% decline in the truck market, which represented 40% of total sales.

    • Operating income decreased to $2.3 million from $5.2 million in the prior year, reflecting elevated SG&A investments.

    • Adjusted EBITDA margin remained stable at 12.2% despite truck softness, indicating continued pressure on overall profitability.

    • Net interest expense increased to $60,000 from $32,000 in the prior year quarter.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year 2026 Total Sales Growth
    flat to up approximately 5% year-over-year
    high materiality
    High
    Full-year 2026 Gross Margin
    17% to 19%
    high materiality
    High
    Full-year 2026 Capital Expenditures
    $25 million to $30 million
    medium materiality
    High
    New Program Awards Contribution
    begin contributing meaningfully in H2 FY26 and reach full annualized run rates during 2027
    high materiality
    High
    Truck Production Volumes
    continue improving through the second half of 2026
    medium materiality
    Medium
    Truck Production Volumes
    forecasted to increase into 2028
    medium materiality
    Medium
    Long-term Revenue Objective
    $500 million
    high materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Truck
    Significant market decline, acting as a headwind to consolidated growth. Production volumes are expected to improve through H2 FY26.
    % of total product sales: 40%
    		—-23%——
    Powersports
    Continued strong performance, contributing to non-trucking growth.
    		—7%——
    Building Products
    Exceptional growth driven by successful program launches and increasing customer demand.
    		—36%——
    Other End Markets (excluding Truck)
    Strong growth across remaining end markets, reflecting diversification efforts and commercial execution.
    		—20.8%——

    Operational metrics

    14
    Net New Business Awards
    $25.8 million
    H1 FY26

    Secured in the first half of the fiscal year, on track for the full-year objective.

    Incremental New Business Awards (24 months)
    $112 million
    Past 24 months

    Provides clear line of sight to future production revenue opportunities.

    Gross Margin
    20.3%up 220 bps YoY
    Q2 FY26

    Benefited from a capacity charge received from a customer; adjusted margin remains at the high end of the targeted range.

    SG&A Expense
    $10.4 million
    Q2 FY26

    Elevated due to investments in Mexico expansion and succession planning, compared to 11.5% in prior year period.

    Adjusted EBITDA
    $7.6 million
    Q2 FY26

    Margin remained stable despite softness in the truck market, reflecting operational discipline.

    Net Cash Provided by Operating Activities
    $7.1 million
    H1 FY26

    Cash generated from operations during the first half of the year.

    Cash Balance
    $12.1 million
    Q2 FY26

    Cash on hand at the end of the quarter, with no outstanding debt.

    Debt Capacity
    $100 millionincreased
    Q2 FY26

    Increased through an amended and extended credit facility in early July, enhancing financial flexibility.

    Return on Capital Employed (ROCE)
    5.7%
    Trailing 12-month

    Expected to strengthen as new programs launch and asset utilization improves.

    Share Repurchases
    24,545 shares
    H1 FY26

    Capital returned to shareholders; no shares repurchased in Q2 FY26.

    On-time Delivery
    99.2%
    Q2 FY26

    Achieved during the quarter, reflecting disciplined execution.

    Quality Performance (PPM)
    49 ppm
    Q2 FY26

    Meaning fewer than 50 defective parts per million produced, considered top-tier.

    Mexico Expansion Costs
    $3.4 million
    H1 FY26

    Incurred through the first half of the year; no material increase expected for the balance of 2026.

    Succession-Related Expenses
    $1.4 million
    H1 FY26

    Incurred through the first half of the year; no significant additional costs anticipated for the remainder of the year.

    Capital programs

    1
    Mexico Operations Strategic Investmentsunderway$25 million
    Period spend: $18 million to $20 million
    Spent to date: $12.1 million

    Benefit: New Monterrey facility in production; 2 additional 4,500-ton machines at Matamoros

    Total investment across Mexico operations, with a significant portion of full-year capex dedicated to these initiatives. Monterrey facility construction completed on time and on budget. Matamoros expansion to increase large molding capacity.

    Risks & headwinds

    4
    Softness in Medium and Heavy-Duty Truck MarketQ2 FY26, expected to improve H2 FY26

    40% of total product sales, declined 23% YoY

    Mitigation: Diversification into other end markets (powersports, building products, industrial & utilities); expectation of improving production volumes in H2 FY26 and into 2028.

    Upcoming Emissions Regulations (January 2027)Effective January 1, 2027

    Requires powertrain differences for OEMs, could create short-term quarter-over-quarter impact to volume

    Mitigation: OEMs have already made hardware changes in design; potential for pre-buy behavior in late 2026 to mitigate immediate impact.

    Oil Price IncreasesOngoing

    Rising oil prices

    Mitigation: Contractual raw material pass-through mechanisms expected to substantially mitigate related cost impacts.

    USMCA DiscussionsOngoing

    Policy environment remains dynamic

    Mitigation: No material disruption to production schedules experienced; diversified manufacturing footprint, strong balance sheet, and long-standing customer relationships position the company well.

    What to watch in Q3 FY26

    4

    Truck Production Volumes

    Next quarter (Q3 FY26)
    CurrentDown 23% YoY in Q2 FY26
    TargetImproving through H2 FY26

    Why it matters

    Truck market is 40% of sales; recovery is crucial for overall revenue growth and offsetting diversification efforts.

    three, truck production volumes continue improving through the second half of this year;

    Q&A highlights

    5

    Can you elaborate on the encouraging signs and expectations for the trucking market in the second half of the year and beyond?

    Management expects the trucking market to recover in the second half of 2026, with industry forecasts predicting continued increases over the next 2.5 years. They are seeing this recovery in order books and day-to-day actions with truck customers, indicating a stronger second half than the first.

    “on the truck side, certainly, the first half would have been on the lower side for us, and we see that recovering second half of this year. And if you go to industry forecasts, that's over the next 2.5 years, we'll continue to see increases.”

    asked by Alfred Moore · answered by Eric Palomaki

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Investments in Mexico Operations

    Core Molding Technologies completed construction of its greenfield facility in Monterrey, Mexico, within 9 months, on time and on budget. This facility is now in production for structural foam, structural web, and DCPD products, including paint application systems. Additionally, the Matamoros plant expansion is progressing, set to add two 4,500-ton machines in H2 FY26 to increase large molding capacity. These strategic investments, totaling $25 million across Mexico operations, aim to position the company closer to customers and capitalize on long-term growth opportunities without disrupting existing operations.

    02

    Diversification and New Business Wins

    The company secured nearly $26 million in net new business awards in H1 FY26, with 65% originating outside traditional truck and powersports markets. These awards broaden the revenue base and reduce exposure to cyclical end markets. Over the past 24 months, Core Molding has secured approximately $112 million in incremental new business awards, providing line of sight to over $300 million in production revenue opportunities by 2027. Notably, 74% of this new business will utilize existing U.S. manufacturing footprint, improving returns on invested capital.

    03

    Operational Excellence and Quality Performance

    Core Molding achieved 99.2% on-time delivery and a quality performance of 49 parts per million (ppm) during the quarter. This quality level is considered top-tier within the automotive supply chain, meaning over 99.995% of products meet customer requirements. This performance reflects a strong focus on repeatable operational excellence and continuous improvement, enabling improved profitability and market expansion.

    04

    End-Market Trends and Growth Drivers

    While the truck market (40% of sales) declined 23% year-over-year, non-trucking production sales grew 20.8%. Powersports revenue increased 7%, and building products saw exceptional growth of 36% due to successful program launches. The company is also pursuing opportunities in utility modernization, communications infrastructure, grid resiliency, and energy transition, including a significant award for battery energy storage systems, leveraging its proprietary SMC composite solutions for durable, lightweight products.

    05

    Capital Allocation and M&A Strategy

    Core Molding maintains a disciplined capital allocation strategy, balancing organic growth investments with a thoughtful approach to acquisitions. The company has increased its share repurchase authorization by $6.5 million and repurchased 24,545 shares for $457,000 in H1 FY26. Management is broadening its evaluation of M&A opportunities, including larger transactions, but remains committed to pursuing only accretive, strategically aligned opportunities that fit its culture and processes, aiming for strong return on capital employed.

    AI-generated summary of the company’s earnings call. Not investment advice.