-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MV6KHI2nUDSO9mROVfJuh+aGcjRqt3AXhm50hjnclxf/Z5NR6pI/GvhCwaPsg2N7 QEMSz7UJa5GolaAVsQCrqA== 0000950152-05-009197.txt : 20051114 0000950152-05-009197.hdr.sgml : 20051111 20051114120742 ACCESSION NUMBER: 0000950152-05-009197 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORE MOLDING TECHNOLOGIES INC CENTRAL INDEX KEY: 0001026655 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 311481870 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12505 FILM NUMBER: 051198206 BUSINESS ADDRESS: STREET 1: 800 MANOR PARK DRIVE STREET 2: P O BOX 28183 CITY: COLUMBUS STATE: OH ZIP: 43228 BUSINESS PHONE: 8006666960 MAIL ADDRESS: STREET 1: 800 MANOR PARK DR STREET 2: P O BOX 28183 CITY: COLUMBUS STATE: OH ZIP: 43228 FORMER COMPANY: FORMER CONFORMED NAME: CORE MATERIALS CORP DATE OF NAME CHANGE: 19961107 10-Q 1 l16383ae10vq.txt CORE MOLDING TECHNOLOGIES, INC. 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ To ___________ Commission File Number 001-12505 CORE MOLDING TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 31-1481870 (State or other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.)
800 Manor Park Drive, P.O. Box 28183 Columbus, Ohio 43228-0183 (Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (614) 870-5000 N/A Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] NO [ ] Indicate by check mark whether the registrant is an accelerated filer as defined by Rule 12b-2 of the Exchange Act. Yes [ ] NO [X] Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Act. Yes [ ] NO [X] As of November 11, 2005, the latest practicable date, 10,014,510 shares of the registrant's common stock were issued and outstanding. PART 1 - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 2005 2004 ------------- ------------ (UNAUDITED) ASSETS Cash and cash equivalents $ 8,374,368 $ 5,358,246 Accounts receivable (less allowance for doubtful accounts: September 30, 2005 - $227,000; December 31, 2004 - $235,000) 29,352,539 19,130,835 Inventories: Finished and work in process goods 2,142,740 2,650,610 Stores 5,274,404 3,893,886 ------------ ------------ Total inventories 7,417,144 6,544,496 Deferred tax asset 1,822,198 1,892,238 Prepaid expenses and other current assets 2,047,631 2,272,975 ------------ ------------ Total current assets 49,013,880 35,198,790 Property, plant and equipment 46,917,177 45,387,577 Accumulated depreciation (24,306,206) (22,657,889) ------------ ------------ Property, plant and equipment - net 22,610,971 22,729,688 Deferred tax asset - net 6,179,519 9,361,558 Goodwill 1,097,433 1,097,433 Customer list - net 198,072 235,211 Other assets 210,590 337,782 ------------ ------------ TOTAL $ 79,310,465 $ 68,960,462 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Current liabilities Current portion long-term debt $ 1,765,716 $ 1,735,714 Current portion deferred gain 366,960 453,555 Current portion of graduated lease payments 229,269 229,269 Accounts payable 17,234,392 14,055,397 Accrued liabilities: Compensation and related benefits 5,566,766 3,664,949 Interest 94,327 101,132 Taxes 307,895 454,618 Other accrued liabilities 982,129 974,400 ------------ ------------ Total current liabilities 26,547,454 21,669,034 Long-term debt 10,041,424 11,370,711 Fair value interest rate swap 178,154 474,658 Graduated lease payments 314,394 486,346 Deferred long-term gain 394,482 648,053 Postretirement benefits liability 9,421,158 8,034,774 STOCKHOLDERS' EQUITY: Preferred stock - $0.01 par value, authorized shares - 10,000,000; Outstanding shares: September 30, 2005 and December 31, 2004 - 0 -- -- Common stock - $0.01 par value, authorized shares - 20,000,000; Outstanding shares: September 30, 2005 - 10,014,510 and December 31, 2004 - 9,778,680 100,145 97,787 Paid-in capital 20,180,191 19,451,392 Accumulated other comprehensive loss, net of income tax effect (111,098) (314,536) Retained earnings 12,244,161 7,042,243 ------------ ------------ Total stockholders' equity 32,413,399 26,276,886 ------------ ------------ TOTAL $ 79,310,465 $ 68,960,462 ============ ============
See notes to condensed consolidated financial statements 2 CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- NET SALES: Products $31,045,446 $24,923,582 $93,262,014 $75,318,864 Tooling 568,525 1,004,072 4,527,751 1,456,871 ----------- ----------- ----------- ----------- Total sales 31,613,971 25,927,654 97,789,765 76,775,735 ----------- ----------- ----------- ----------- Cost of sales 25,558,445 22,101,202 77,500,507 63,092,105 Postretirement benefits expense 569,135 460,818 1,660,329 1,261,605 ----------- ----------- ----------- ----------- Total cost of sales 26,127,580 22,562,020 79,160,836 64,353,710 ----------- ----------- ----------- ----------- GROSS MARGIN 5,486,391 3,365,634 18,628,929 12,422,025 ----------- ----------- ----------- ----------- Selling, general and administrative expense 2,907,003 2,354,693 9,219,409 7,785,464 Postretirement benefits expense 92,650 75,017 368,351 244,806 ----------- ----------- ----------- ----------- Total selling, general and administrative expense 2,999,653 2,429,710 9,587,760 8,030,270 INCOME BEFORE INTEREST AND TAXES 2,486,738 935,924 9,041,169 4,391,755 Interest income 62,442 1,596 123,051 5,000 Interest expense (180,428) (209,176) (577,263) (682,469) ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 2,368,752 728,344 8,586,957 3,714,286 Income taxes: Current 124,260 56,548 403,296 261,404 Deferred 733,312 194,097 2,981,743 1,120,581 ----------- ----------- ----------- ----------- Total income taxes 857,572 250,645 3,385,039 1,381,985 ----------- ----------- ----------- ----------- NET INCOME $ 1,511,180 $ 477,699 $ 5,201,918 $ 2,332,301 =========== =========== =========== =========== NET INCOME PER COMMON SHARE: Basic $ 0.15 $ 0.05 $ 0.53 $ 0.24 Diluted $ 0.14 $ 0.05 $ 0.50 $ 0.24 =========== =========== =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 9,990,053 9,778,680 9,876,455 9,778,680 Diluted 10,578,296 9,789,175 10,388,126 9,837,825 =========== =========== =========== ===========
See notes to condensed consolidated financial statements 3 CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
ACCUMULATED COMMON STOCK OTHER TOTAL OUTSTANDING PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS' SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) EQUITY ---------- -------- ----------- ----------- ------------- ----------------- BALANCE AT JANUARY 1, 2005 9,778,680 $ 97,787 $19,451,392 $ 7,042,243 $(314,536) $26,276,886 Net income 5,201,918 5,201,918 Common shares issued from exercise of stock options 235,830 2,358 728,799 731,157 Change in fair value of the interest rate swaps at September 30, 2005 net of deferred income tax expense of $100,811. 203,438 203,438 ---------- -------- ----------- ----------- --------- ----------- BALANCE AT SEPTEMBER 30, 2005 10,014,510 $100,145 $20,180,191 $12,244,161 $(111,098) $32,413,399 ========== ======== =========== =========== ========= ===========
See notes to condensed consolidated financial statements. 4 CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, -------------------------- 2005 2004 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,201,918 $ 2,332,301 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,742,883 1,537,972 Deferred income taxes 3,151,268 1,120,581 Interest expense related to ineffectiveness of swap 7,746 -- Loss on disposal of assets 11,528 16,600 Gain on translation of foreign currency financial statements (4,242) (88,412) Amortization of gain on sale/leaseback transactions (340,166) (340,165) Change in operating assets and liabilities: Accounts receivable (10,185,439) (5,406,348) Inventories (203,786) (1,093,080) Prepaid and other assets 225,344 (530,011) Accounts payable 3,000,200 3,418,646 Accrued and other liabilities 1,467,015 527,805 Postretirement benefits liability 1,386,384 958,328 ------------ ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 5,460,653 2,454,217 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,341,566) (1,135,929) Proceeds from maturities of mortgage-backed security investment 88,239 1,032 Proceeds from sale of property and equipment 65,000 -- Acquisition of Cincinnati Fiberglass, Inc. (688,077) -- Acquisition of Keystone Restyling -- (526,360) ------------ ----------- NET CASH USED IN INVESTING ACTIVITIES (1,876,404) (1,661,257) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 731,158 -- Net borrowings on line of credit -- 585,000 Cash (bank) overdrafts -- (857,144) Payments of principal on secured note payable (964,285) -- Payments of principal on industrial revenue bond (335,000) (310,000) ------------ ----------- NET CASH USED IN FINANCING ACTIVITIES (568,127) (582,144) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,016,122 210,816 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,358,246 346,191 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,374,368 $ 557,007 ============ =========== Cash paid for: Interest $ 399,143 $ 636,998 ============ =========== Income taxes $ 484,918 $ 257,502 ============ ===========
See notes to condensed consolidated financial statements. 5 CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States of America for interim reporting, which are less than those required for annual reporting. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (all of which are normal and recurring in nature) necessary to present fairly the financial position of Core Molding Technologies, Inc. and its subsidiaries ("Core Molding Technologies") at September 30, 2005, and the results of their operations and cash flows. The "Consolidated Notes to Financial Statements", which are contained in the 2004 Annual Report to Shareholders, should be read in conjunction with these condensed consolidated financial statements. Certain reclassifications have been made to prior year's amounts to conform to the classifications of such amounts for 2005. Core Molding Technologies and its subsidiaries operate in the plastics market in a family of products known as "reinforced plastics". Reinforced plastics are combinations of resins and reinforcing fibers (typically glass or carbon) that are molded to shape. Core Molding Technologies operates four production facilities in Columbus, Ohio, Batavia, Ohio, Gaffney, South Carolina, and Matamoros, Mexico. The Columbus and Gaffney facilities produce reinforced plastics by compression molding sheet molding compound ("SMC") in a closed mold process. The Batavia facility, which was acquired in August 2005 (see Note 6), produces reinforced plastic products by a robotic spray-up open mold process and multiple insert tooling ("MIT") closed mold process. The Matamoros facility utilizes spray-up and hand lay-up open mold processes and resin transfer ("RTM") closed mold process to produce reinforced plastic products. Core Molding Technologies also sells reinforced plastic products in the automotive-aftermarket industry as a result of its September 2004 acquisition of certain assets of Keystone Restyling Products, Inc. (see Note 6). STOCK BASED COMPENSATION - Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," and SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," encourage, but do not require, companies to record compensation cost for stock-based employee compensation plans at fair value. Core Molding Technologies has chosen to continue to account for its stock option plans in accordance with Accounting Principles Board ("APB") Opinion No. 25, under which no compensation cost has been recognized. Had compensation cost for all stock option plans been determined consistent with the requirements of SFAS No. 123 in accordance with the disclosure provision of SFAS No. 148, Core Molding Technologies' net income and earnings per common share would have resulted in the pro forma amounts as reported below.
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------------- ----------------------- 2005 2004 2005 2004 ---------- -------- ---------- ---------- Net income as reported $1,511,180 $477,699 $5,201,918 $2,332,301 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects 34,822 40,848 189,461 73,148 ---------- -------- ---------- ---------- Pro forma net income $1,476,358 $436,851 $5,012,457 $2,259,153 ========== ======== ========== ========== Earnings per share: Basic - as reported $ 0.15 $ 0.05 $ 0.53 $ 0.24 Basic - pro forma $ 0.15 $ 0.04 $ 0.51 $ 0.23 Diluted - as reported $ 0.14 $ 0.05 $ 0.50 $ 0.24 Diluted - pro forma $ 0.14 $ 0.04 $ 0.48 $ 0.23
The pro forma amounts are not representative of the effects on reported net earnings or earnings per common share for future periods. 6 2. EARNINGS PER COMMON SHARE Basic earnings per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed similarly but include the effect of the assumed exercise of dilutive stock options under the treasury stock method. The computation of basic and diluted earnings per common share is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------ ------------------------ 2005 2004 2005 2004 ----------- ---------- ----------- ---------- Net income $ 1,511,180 $ 477,699 $ 5,201,918 $2,332,301 ----------- ---------- ----------- ---------- Weighted average common shares outstanding (basic) 9,990,053 9,778,680 9,876,455 9,778,680 Plus: dilutive options assumed exercised 997,270 121,500 997,270 871,885 Less: shares assumed repurchased with proceeds from exercise (409,027) (111,005) (485,599) (812,740) ----------- ---------- ----------- ---------- Weighted average common and potentially issuable common shares outstanding (diluted) 10,578,296 9,789,175 10,388,126 9,837,825 =========== ========== =========== ========== Basic earnings per common share $ 0.15 $ 0.05 $ 0.53 $ 0.24 Diluted earnings per common share $ 0.14 $ 0.05 $ 0.50 $ 0.24
For the three and nine months ended September 30, 2005, there were no antidilutive options. For the three and nine months ended September 30, 2004 there were 894,800 and 20,000 antidilutive options, respectively. 3. SALES REVENUE Core Molding Technologies currently has four major customers, International Truck & Engine Corporation ("International"), Freightliner, LLC ("Freightliner"), PACCAR, Inc. ("PACCAR"), and Yamaha Motor Manufacturing Corporation ("Yamaha"). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales. The following table presents sales revenue for the above-mentioned customers for the three and nine months ended September 30, 2005 and September 30, 2004:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2005 2004 2005 2004 ----------- ----------- ---------- ----------- International $15,160,355 $14,123,020 $51,140,598 $40,948,665 Freightliner 4,285,745 4,191,227 13,465,489 10,206,119 PACCAR 5,704,260 1,155,223 8,494,156 2,611,291 Yamaha 1,257,229 1,962,415 8,852,939 9,878,162 ----------- ----------- ----------- ----------- Subtotal 26,407,589 21,431,885 81,953,182 63,644,237 Other 5,206,382 4,495,769 15,836,583 13,131,498 ----------- ----------- ----------- ----------- Total $31,613,971 $25,927,654 $97,789,765 $76,775,735 =========== =========== =========== ===========
In the third quarter, Core Molding Technologies was informed by Yamaha of its intention to diversify its supplier base and as a result, may not continue to be a major customer in future reporting periods. 7 4. COMPREHENSIVE INCOME Comprehensive income represents net income plus the results of certain equity changes not reflected in the Statement of Income. The components of comprehensive income, net of tax, are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- --------- ---------- ---------- Net income $1,511,180 $ 477,699 $5,201,918 $2,332,301 Change in fair value of the interest rate swaps, net of deferred income tax expense of $61,450 and tax benefit of $58,771 for the three months ended September 30, respectively; and tax expense of $100,811 and $3,162 for the nine months ended September 30, respectively. 119,286 (114,085) 203,438 6,139 ---------- --------- ---------- ---------- Comprehensive income $1,630,466 $ 363,614 $5,405,356 $2,338,440 ========== ========= ========== ==========
5. POSTRETIREMENT BENEFITS The components of expense for all of Core Molding Technologies' postretirement benefits plans for the three and nine months ended September 30, 2005 and 2004 are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- ----------------------- 2005 2004 2005 2004 -------- -------- ---------- ---------- Pension Expense: Interest cost $ 4,000 $ 4,000 $ 12,000 $ 12,000 Defined contribution plan Contributions 170,000 115,000 348,000 222,000 Multi-employer plan Contributions 39,000 77,000 282,000 217,000 -------- -------- ---------- ---------- Total pension expense 213,000 196,000 642,000 451,000 -------- -------- ---------- ---------- Health and Life Insurance: Service cost 225,000 165,000 676,000 482,000 Interest cost 183,000 105,000 552,000 451,000 Amortization of net loss 41,000 70,000 159,000 122,000 -------- -------- ---------- ---------- Net periodic benefit cost 449,000 340,000 1,387,000 1,055,000 -------- -------- ---------- ---------- Total postretirement benefits expense $662,000 $536,000 $2,029,000 $1,506,000 ======== ======== ========== ==========
Core Molding Technologies has made contributions of approximately $664,000 to pension plans through September 30, 2005 of which $394,000 was accrued at December 31, 2004. Core Molding Technologies expects to make approximately $198,000 of postretirement benefit payments through the remainder of 2005. In May 2004, the Financial Accounting Standards Board ("FASB") staff issued FASB Staff Position 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003" (the "Act"). Core Molding Technologies adopted the provisions of the Act in the third quarter of 2004. The adoption of the provisions of the Act increased net income for the three and nine months ended September 30, 2004 by $39,300 and $117,900 respectively. 8 6. ACQUISITIONS On August 3, 2005 Core Molding Technologies, Inc. acquired certain assets of the Cincinnati Fiberglass Division of Diversified Glass, Inc., a Batavia, Ohio-based, privately held manufacturer and distributor of fiberglass reinforced plastic components supplied primarily to the heavy-duty truck market, for $688,077. Core Molding Technologies has continued operation of the Batavia facility. As part of the acquisition, Core Molding Technologies agreed to lease the manufacturing facility from the previous owner of Diversified Glass, Inc. The acquisition will be recorded using the purchase method of accounting. Accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The following table presents the allocation of the purchase price: Inventory $ 668,862 Property and Equipment 100,000 Tooling accounts receivable 36,265 --------- Total assets purchased 805,127 Accrued vacation assumed $(117,050) --------- Net purchase price $ 688,077 =========
The following table reflects the unaudited consolidated results of operations on a pro forma basis had the Cincinnati Fiberglass Division of Diversified Glass, Inc. been included in operating results from January 1, 2004. There are no material non-recurring items in the pro forma results of operations.
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- -------------------------- 2005 2004 2005 2004 ----------- ----------- ------------ ----------- Net Sales (pro forma) $33,446,153 $31,091,410 $111,913,639 $89,129,856 =========== =========== ============ =========== Net Income (pro forma) $ 1,405,123 $ 654,714 $ 5,880,798 $ 2,479,300 =========== =========== ============ =========== Net Income Per Share (pro forma) Basic $ 0.14 $ 0.07 $ 0.60 $ 0.25 Diluted $ 0.13 $ 0.07 $ 0.57 $ 0.25
The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time, nor is it intended to be a projection of future results. The effects of the acquisition have been included in the consolidated statement of operations since the acquisition date. In September 2004, Core Molding Technologies purchased substantially all of the assets consisting primarily of inventory and equipment, of Keystone Restyling Products, Inc., for $544,150. Core Molding Technologies may be required to pay contingent cash payments based on certain earnings threshold of the acquired business during the three-year period beginning January 1, 2005, and continuing through December 31, 2007. No payments have been required as of September 30, 2005. Additional costs will be recorded as an intangible asset. The acquisition was recorded using the purchase method of accounting. Accordingly, the purchase price has been allocated to tangible and identified intangible assets acquired based on the estimated fair values at the date of acquisition. If the acquisition had occurred at January 1, 2004, the operating results of Keystone Restyling Products, Inc. would not have been significant to Core Molding Technologies. 9 6. ACQUISITIONS (CONTINUED) The following table presents the allocation of the purchase price: Inventory $145,110 Property and equipment 151,450 Customer list 247,590 -------- Total purchase price $544,150 ========
Core Molding Technologies will amortize the customer list on a straight-line basis over sixty months. Amortization expense is expected to be $49,518 in 2005 through 2008 and $37,138 in 2009. 7. INTEREST RATE SWAPS Core Molding Technologies has entered into interest rate swap agreements, which are designated as cash flow hedging instruments on both the Industrial Revenue Bond ("IRB") and the bank note payable. In all periods presented Core Molding Technologies cash flow hedges were highly effective; any ineffectiveness was not material. Interest expense related to the ineffectiveness of the IRB swap was $7,746 for the nine months ended September 30, 2005. None of the changes in the fair value of our interest rate swaps have been excluded from our assessment of hedge effectiveness. 8. RECENT ACCOUNTING PRONOUNCEMENTS In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4," which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) and also requires that the allocation of fixed production overhead be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Core Molding Technologies is currently evaluating the impact of adopting this statement but believes it will not have a material effect on the consolidated financial statements. In December 2004, the FASB issued revised SFAS No. 123, "Share-Based Payment," which replaces SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees." This statement, which requires the cost of all share-based payment transactions be recognized in the financial statements, establishes fair value as the measurement objective and requires entities to apply a fair-value-based measurement method in accounting for share-based payment transactions. The statement applies to all awards granted, modified, repurchased or cancelled after January 1, 2006, and unvested portions of previously issued and outstanding awards. Core Molding Technologies is currently evaluating the impact of adopting this statement. In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections," to replace Accounting Principles Board Opinion No. 20, "Accounting Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements." This Statement provides guidance on the accounting for and reporting of accounting changes and error corrections. It also establishes the required methods by which entities should include accounting changes or error corrections in previously issued financial statements. This Statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date this Statement was issued. The company intends to adopt this statement for fiscal 2006. 10 PART I - FINANCIAL INFORMATION ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the federal securities laws. As a general matter, forward-looking statements are those focused upon future plans, objectives or performance as opposed to historical items and include statements of anticipated events or trends and expectations and beliefs relating to matters not historical in nature. Such forward-looking statements involve known and unknown risks and are subject to uncertainties and factors relating to Core Molding Technologies' operations and business environment, all of which are difficult to predict and many of which are beyond Core Molding Technologies' control. These uncertainties and factors could cause Core Molding Technologies' actual results to differ materially from those matters expressed in or implied by such forward-looking statements. Core Molding Technologies believes that the following factors, among others, could affect its future performance and cause actual results to differ materially from those expressed or implied by forward-looking statements made in this quarterly report: business conditions in the plastics, transportation, watercraft and commercial product industries; general economic conditions in the markets in which Core Molding Technologies operates; dependence upon four major customers as the primary source of Core Molding Technologies' sales revenues; recent efforts of Core Molding Technologies to expand its customer base; failure of Core Molding Technologies' suppliers to perform their contractual obligations; the availability of raw materials; inflationary pressures; new technologies; competitive and regulatory matters; labor relations; the loss or inability of Core Molding Technologies to attract key personnel; the availability of capital; the ability of Core Molding Technologies to provide on-time delivery to customers, which may require additional shipping expenses to ensure on-time delivery or otherwise result in late fees; risk of cancellation or rescheduling of orders; and management's decision to pursue new products or businesses which involve additional costs, risks or capital expenditures. OVERVIEW Core Molding Technologies is a compounder of sheet molding composite ("SMC") and molder of fiberglass reinforced plastics. Core Molding Technologies produces high quality fiberglass reinforced molded products and SMC materials for varied markets, including medium and heavy-duty trucks, automobiles, personal watercraft and other commercial products. The demand for Core Molding Technologies' products is affected by economic conditions in the United States, Canada and Mexico. Core Molding Technologies' manufacturing operations have a significant fixed cost component. Accordingly, during periods of changing demands, the profitability of Core Molding Technologies' operations may change proportionately more than revenues from operations. On December 31, 1996, Core Molding Technologies acquired substantially all of the assets and assumed certain liabilities of Columbus Plastics, a wholly owned operating unit of International Truck & Engine Corporation's ("International") truck manufacturing division since its formation in late 1980. Columbus Plastics, located in Columbus, Ohio, was a compounder and compression molder of SMC. In 1998 Core Molding Technologies began compression molding operations at its second facility in Gaffney, South Carolina, and in October 2001, Core Molding Technologies acquired certain assets of Airshield Corporation. As a result of this acquisition, Core Molding Technologies expanded its fiberglass molding capabilities to include the spray up and hand-lay-up open mold process and resin transfer ("RTM") close mold process. In September 2004, Core Molding Technologies acquired substantially all the operating assets of Keystone Restyling Products, Inc., a privately held manufacturer and distributor of fiberglass reinforced products for the automotive-aftermarket industry. In August 2005, Core Molding Technologies acquired certain assets of the Cincinnati Fiberglass Division of Diversified Glass, Inc., a Batavia, Ohio-based, privately held manufacturer and distributor of fiberglass reinforced plastic components supplied primarily to the heavy-duty truck market. The Batavia, Ohio facility produces reinforced plastic products by a robotic spray-up open mold process and multiple insert tooling ("MIT") closed mold process. 11 RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2005, AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2004 Net sales for the three months ended September 30, 2005, totaled $31,614,000, representing an approximate 22% increase from the $25,928,000 reported for the three months ended September 30, 2004. Included in total sales are tooling project revenues of $569,000 and $1,004,000 for the three months ended September 30, 2005 and September 30, 2004, respectively. Tooling project revenues are sporadic in nature and do not represent a recurring trend. Total product sales, excluding tooling project revenue, were higher by approximately 25% for the three months ended September 30, 2005, as compared to the same period a year ago. The primary reason for the increase in sales is due to the positive impact general economic conditions have had on the demand for medium and heavy-duty trucks as well as the addition of the recently acquired Batavia, Ohio facility. Sales to International totaled $15,160,000 for the three months ended September 30, 2005, an approximate 7% increase from the three months ended September 30, 2004 amount of $14,123,000. The primary reason for the increase in sales to International was due to the positive impact general economic conditions have had, as referenced above. Sales to Freightliner totaled $4,286,000 for the three months ended September 30, 2005, which was an increase of approximately 2% from the $4,191,000 for September 30, 2004. Sales to PACCAR totaled $5,704,000 for the three months ended September 30, 2005, an approximate 394% increase from the three months ended September 30, 2004 amount of $1,155,000. The primary reason for the increase in sales to PACCAR is due to the addition of the recently acquired Batavia, Ohio facility. Sales to Yamaha totaled $1,257,000 for the three months ended September 30, 2005, an approximate 36% decrease from the three months ended September 30, 2004 amount of $1,962,000. The primary reasons for this decrease was due to the decision of Yamaha to diversify its supplier base. Sales to other customers for the three months ended September 30, 2005, increased approximately 16% to $5,206,000 from $4,496,000 for the three months ended September 30, 2004. The increase in sales was primarily due to the addition of Core Molding Technologies automotive aftermarket division, which was acquired in September of 2004. Also contributing to this increase are new customers at Core Molding Technologies' Matamoros facility. Gross margin was approximately 17.4% of sales for the three months ended September 30, 2005, compared with 13.0% for the three months ended September 30, 2004. The primary reason for this increase was due to improved production efficiencies related to material usage, primarily reduced scrap costs. Other positive impacts on gross margin were improved labor efficiencies and the favorable effect of increased production volumes, which allows Core Molding Technologies to better absorb its fixed costs of production. Partially offsetting these improvements were increases in employee benefits, repairs and maintenance and increased costs of several raw materials and operating expenses, particularly those related to petroleum and energy sources. Selling, general and administrative expenses ("SG&A") totaled $3,000,000 for the three months ended September 30, 2005, increasing from $2,430,000 for the three months ended September 30, 2004. The primary reasons for this difference was due to increases in labor costs and certain employee benefits. Net interest expense totaled $118,000 for the three months ended September 30, 2005, decreasing from $208,000 for the three months ended September 30, 2004. The primary reason for the decrease was due to interest income of $62,000 for the three months ended September 30, 2005 compared to interest income of $2,000 for the same time period a year ago. Interest rates experienced by Core Molding Technologies with respect to its two long-term borrowing facilities were favorable; however, due to the interest rate swaps Core Molding Technologies entered into, the interest rate is essentially fixed for these debt instruments. Income taxes for the three months ended September 30, 2005, are estimated to be approximately 36% of total earnings before taxes. Actual income tax payments will be lower than the recorded income tax expense, as Core Molding Technologies has substantial federal tax net operating loss carryforwards. These net operating loss carryforwards were recorded as a deferred tax asset. As the tax net operating loss carryforwards are utilized to offset federal income tax payments, Core Molding Technologies reduces the deferred tax asset as opposed to recording a reduction in income tax expense. Net income for the three months ended September 30, 2005, was $1,511,000, or $.15 per basic and $.14 per diluted share, representing an increase of $1,033,000 over the net income for the three months ended September 30, 2004, of $478,000, or $.05 per basic and diluted share. 12 NINE MONTHS ENDED SEPTEMBER 30, 2005, AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2004 Net sales for the nine months ended September 30, 2005, totaled $97,790,000, representing an approximate 27% increase from the $76,776,000 reported for the nine months ended September 30, 2004. Revenue from tooling projects totaled $4,528,000 for the nine months ended September 30, 2005. Tooling project revenues for the nine months ended September 30, 2004, totaled $1,457,000. Tooling project revenues are sporadic in nature and do not represent a recurring trend. Total product sales revenue, excluding tooling project revenue, was higher by approximately 24% for the nine months ended September 30, 2005, as compared to September 30, 2004. The primary reason for this increase was due to the positive impact general economic conditions have had on the demand for medium and heavy-duty trucks as well as the addition of the recently acquired Batavia, Ohio facility. Sales to International for the nine months ended September 30, 2005 were $51,141,000, an approximate 25% increase as compared to the nine months ended September 30, 2004 of $40,949,000. The primary reasons for the increase in sales to International were due to the positive impact general economic conditions have had, as referenced above, as well as the recognition of tooling revenue. Sales to Freightliner totaled $13,465,000 for the nine months ended September 30, 2005, which was an increase of approximately 32% from the $10,206,000 for September 30, 2004. The primary reason for this increase was due to increased order volumes due to the reason mentioned above. Sales to PACCAR totaled $8,494,000 for the nine months ended September 30, 2005, an approximate 225% increase from the $2,611,000 for the same time a year ago. The primary reason for the increase in sales to PACCAR is due to the addition of the recently acquired Batavia, Ohio facility as well as the positive impact general economic conditions have had, as referenced above. Sales to Yamaha totaled $8,853,000 for the nine months ended September 30, 2005, an approximate 10% decrease from the nine months ended September 30, 2004 amount of $9,878,000. The primary reason for this decrease was due to the decision of Yamaha to diversify its supplier base. Sales to other customers for the nine months ended September 30, 2005, increased approximately 21% to $15,837,000 from $13,131,000 for the nine months ended September 30, 2004. The increase in other sales was primarily due to sales from Core Molding Technologies automotive aftermarket division, which was acquired in September 2004. Also contributing to the increase in sales was the addition of new customers at Core Molding Technologies' Matamoros facility. Gross margin was approximately 19.0% of sales for the nine months ended September 30, 2005, compared with 16.2% for the nine months ended September 30, 2004. The increase in gross margin, as a percentage of sales from the prior year, was primarily due to production efficiencies related to labor usage. Increases in production volumes also added to the increased gross margin for the current period, as Core Molding Technologies was better able to absorb its fixed cost of production. Partially offsetting these improvements were increases in the costs of several raw materials and operating expenses, particularly those related to petroleum and energy sources. Selling, general and administrative expenses ("SG&A") totaled $9,588,000 for the nine months ended September 30, 2005, increasing from $8,030,000 for the nine months ended September 30, 2004. The primary reason for this difference was due to increases in certain employee benefits. Net interest expense totaled $454,000 for the nine months ended September 30, 2005, decreasing from $677,000 for the nine months ended September 30, 2004. The decrease is due to regularly scheduled principal payments made in 2005 and interest income of $123,000 for the nine months ended September 30, 2005 compared to $5,000 for the same time period a year ago. Interest rates experienced by Core Molding Technologies with respect to its long-term borrowing facilities were favorable; however, due to the interest rate swaps Core Molding Technologies entered into, the interest rate is essentially fixed for these debt instruments. Income taxes for the nine months ended September 30, 2005, are estimated to be approximately 39% of total earnings before taxes. The difference between the effective tax rate and the statutory tax rate is due to expensing previously recorded deferred state tax assets that Core Molding Technologies will not be able to realize as a result of the recent Ohio corporate tax legislation, enacted on September 30, 2005, which phases out Ohio's Corporate Franchise Tax based on income and phases in a new gross receipts tax called the Commercial Activity Tax. As a result, Core Molding Technologies recorded an additional income tax expense of $193,000 in the nine months ended September 30, 2005. Actual income tax payments will be lower than the recorded income tax expense, as Core Molding Technologies has substantial federal tax net operating loss carryforwards. These net operating loss carryforwards were recorded as a deferred tax asset. As the tax net operating loss carryforwards are utilized to offset federal income tax payments, Core Molding Technologies reduces the deferred tax asset as opposed to recording a reduction in income tax expense. 13 Net income for the nine months ended September 30, 2005, was $5,202,000, or $.53 per basic and $.50 per diluted share, representing an increase of $2,870,000 over the net income for the nine months ended September 30, 2004, of $2,332,000, or $.24 per basic and diluted share. LIQUIDITY AND CAPITAL RESOURCES Core Molding Technologies' primary cash requirements are for operating expenses and capital expenditures. These cash requirements have historically been met through a combination of cash flow from operations, equipment leasing, issuance of Industrial Revenue Bonds and bank lines of credit. Cash provided by operations for the nine months ended September 30, 2005 totaled approximately $5,461,000. Net income increased operating cash flows by $5,202,000. Non-cash expenses of depreciation and amortization added $1,743,000 to positive operating cash flows. The decrease in deferred income taxes also had a positive impact on operating cash flows of $3,151,000, which is primarily a result of Core Molding Technologies' net operating loss carryforwards reducing current year tax obligations. In addition, the increase in the postretirement healthcare benefits liability of $1,386,000 is not a current cash obligation, and this item will not be a cash obligation until retirees begin to utilize their retirement medical benefits. Also adding to positive cash flow was an increase in accounts payable of $3,000,000 and accrued and other liabilities of $1,467,000 due to timing differences. Partially offsetting the above referenced increases in operating cash flows was an increase in accounts receivable of $10,185,000, which is primarily related to increased sales volume. Cash used for investing activities was $1,876,000 for the nine months ended September 30, 2005. Capital expenditures totaled $1,342,000, which was primarily related to the acquisition of machinery and equipment. Core Molding Technologies anticipates spending an additional $760,000 for the remainder of the year for capital projects, which will be funded by cash from operations. The purchase of certain assets of Cincinnati Fiberglass, Inc. for $688,000 contributed to the overall use of cash for investing activities. Adding to cash flows from investing activities was $88,000 from the maturity of a mortgage-backed security investment and $65,000 from the sale of property plant and equipment. Cash used for financing activities was $568,000. Core Molding Technologies made principal repayments on the bank note payable of $964,000 and regularly scheduled payments on the Industrial Revenue Bond of $335,000. Partially offsetting these payments were proceeds of $731,000 from the issuance of common stock related to the exercise of 235,830 stock options. At September 30, 2005, Core Molding Technologies had cash on hand of $8,374,000 and an available line of credit of $7,500,000, which is scheduled to mature on April 30, 2007 ("Line of Credit"). At September 30, 2005, Core Molding Technologies had no outstanding borrowing on the Line of Credit. As of September 30, 2005, Core Molding Technologies was in compliance with its financial debt covenants for the Line of Credit and letter of credit securing the Industrial Revenue Bond and certain equipment leases. These covenants relate to maintaining certain financial ratios. Management expects Core Molding Technologies to meet these covenants for the year 2005. However, if a material adverse change in the financial position of Core Molding Technologies should occur, Core Molding Technologies' liquidity and ability to obtain further financing to fund future operating and capital requirements could be negatively impacted. CRITICAL ACCOUNTING POLICIES AND ESTIMATES This Management's Discussion and Analysis of Financial Condition and Results of Operations discusses Core Molding Technologies' condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to accounts receivable, inventories, post retirement benefits, and income taxes. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. 14 Accounts receivable allowances: Management maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of Core Molding Technologies' customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Core Molding Technologies recorded an allowance for doubtful accounts of $227,000 at September 30, 2005, and $235,000 at December 31, 2004. Management also records estimates for customer returns, discounts offered to customers, and for price adjustments. Should customer returns, discounts and price adjustments fluctuate from the estimated amounts, additional allowances may be required. Core Molding Technologies has reduced accounts receivable for chargebacks of $778,000 at September 30, 2005, and $719,000 at December 31, 2004. Inventories: Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or market. The inventories are accounted for using the first-in, first-out (FIFO) method of determining inventory costs. Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based on historical and anticipated usage. Goodwill and Long-Lived Assets: Management evaluates whether impairment exists for goodwill and long-lived assets. Should actual results differ from the assumptions used to determine impairment, additional provisions may be required. In particular, decreases in future cash flows from operating activities below the assumptions could have an adverse affect on Core Molding Technologies' ability to recover its long-lived assets. Core Molding Technologies has not recorded any impairment to goodwill or long-lived assets for the nine months ended September 30, 2005 or the year ended December 31, 2004. Post retirement benefits: Management records an accrual for post retirement costs associated with the health care plan sponsored by Core Molding Technologies. Should actual results differ from the assumptions used to determine the reserves, additional provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect on Core Molding Technologies' operations. The effect of a change in healthcare costs is described in Note 11 of the Consolidated Notes to Financial Statements, which are contained in the 2004 Annual Report to Shareholders. Core Molding Technologies recorded a liability for post retirement healthcare benefits based on actuarially computed estimates of $9,421,000 at September 30, 2005, and $8,035,000 at December 31, 2004. Income taxes: The Condensed Consolidated Balance Sheet at September 30, 2005 and December 31, 2004, includes a deferred tax asset of $8,002,000 and $11,254,000. Core Molding Technologies performs analyses to evaluate the amount of deferred tax assets that will be realized. Such analyses are based on the premise that the company is, and will continue to be, a going concern and that it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. For more information, refer to Note 10 in Core Molding Technologies 2004 Annual Report to Shareholders. 15 PART I - FINANCIAL INFORMATION ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Core Molding Technologies' primary market risk results from changes in the price of commodities used in its manufacturing operations. Core Molding Technologies is also exposed to fluctuations in interest rates and foreign currency fluctuations associated with the Mexican peso. Core Molding Technologies does not hold any material market risk sensitive instruments for trading purposes. Core Molding Technologies has the following five items that are sensitive to market risks: (1) Industrial Revenue Bond ("IRB") with a variable interest rate. The Company has an interest rate swap to fix the interest rate at 4.89%; (2) revolving line of credit, which bears a variable interest rate; (3) bank note payable with a variable interest rate. The Company entered into a swap agreement effective January 1, 2004, to fix the interest rate at 5.75%; (4) foreign currency purchases in which Core Molding Technologies purchases Mexican pesos with United States dollars to meet certain obligations that arise due to the facility located in Mexico; and (5) raw material purchases in which Core Molding Technologies purchases various resins for use in production. The prices of these resins are affected by the prices of crude oil and natural gas as well as processing capacity versus demand. Assuming a hypothetical 10% increase in commodity prices, Core Molding Technologies would be impacted by an increase in raw material costs, which would have an adverse affect on operating margins. Assuming a hypothetical 10% change in short-term interest rates in both the nine month periods ended September 30, 2005, and 2004, interest expense would not change significantly, as the interest rate swap agreement would generally offset the impact. 16 PART I - FINANCIAL INFORMATION ITEM 4 CONTROLS AND PROCEDURES As of the end of the period covered by this report, the Company has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon this evaluation, the Company's management, including its Chief Executive Officer and its Chief Financial Officer, concluded that the Company's disclosure controls and procedures were (i) effective to ensure that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act were accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and (ii) effective to ensure that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. There were no changes in internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred in the last fiscal quarter that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. 17 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No submission of matters to a vote of security holders occurred during the three months ended September 30, 2005. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS See Index to Exhibits 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORE MOLDING TECHNOLOGIES, INC. Date: November 14, 2005 By: /s/ James L. Simonton ------------------------------------ James L. Simonton President, Chief Executive Officer and Director Date: November 14, 2005 By: /s/ Herman F. Dick, Jr. ------------------------------------ Herman F. Dick, Jr. Treasurer and Chief Financial Officer 19 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION LOCATION - ----------- ----------- -------- 2(a)(1) Asset Purchase Agreement Incorporated by reference to Dated as of September 12, 1996, Exhibit 2-A to Registration As amended October 31, 1996, Statement on Form S-4 between Navistar International Transportation (Registration No. 333-15809) Corporation and RYMAC Mortgage Investment Corporation(1) 2(a)(2) Second Amendment to Asset Purchase Incorporated by reference to Agreement dated December 16, 1996(1) Exhibit 2(a)(2) to Annual Report on Form 10-K for the year-ended December 31, 2001 2(b)(1) Agreement and Plan of Merger dated as of Incorporated by reference to November 1, 1996, between Core Molding Exhibit 2-B to Registration Technologies, Inc. and RYMAC Mortgage Statement on Form S-4 Investment Corporation (Registration No. 333-15809) 2(b)(2) First Amendment to Agreement and Plan Incorporated by reference to of Merger dated as of December 27, 1996 Exhibit 2(b)(2) to Annual Report Between Core Molding Technologies, Inc. and on Form 10-K for the year ended RYMAC Mortgage Investment Corporation December 31, 2002 2(c)(1) Asset Purchase Agreement dated as of October Incorporated by reference to 10, 2001, between Core Molding Technologies, Exhibit 1 to Form 8K filed Inc. and Airshield Corporation October 31, 2001 3(a)(1) Certificate of Incorporation of Incorporated by reference to Core Molding Technologies, Inc. Exhibit 4(a) to Registration As filed with the Secretary of State Statement on Form S-8 of Delaware on October 8, 1996 (Registration No. 333-29203) 3(a)(2) Certificate of Amendment of Incorporated by reference to Certificate of Incorporation Exhibit 4(b) to Registration of Core Molding Technologies, Inc. Statement on Form S-8 as filed with the Secretary of State (Registration No. 333-29203) of Delaware on November 6, 1996 3(a)(3) Certificate of Incorporation of Core Incorporated by reference to Molding Technologies, Inc., reflecting Exhibit 4(c) to Registration Amendments through November 6, Statement on Form S-8 1996 [for purposes of compliance (Registration No. 333-29203) with Securities and Exchange Commission filing requirements only] 3(a)(4) Certificate of Amendment of Certificate of Incorporated by reference to Incorporation as filed with the Secretary of Exhibit 3(a)(4) to Quarterly State of Delaware on August 28, 2002 Report on Form 10-Q for the quarter ended September 30, 2002
20
EXHIBIT NO. DESCRIPTION LOCATION - ----------- ----------- -------- 3(b) By-Laws of Core Molding Technologies, Inc. Incorporated by reference to Exhibit 3-C to Registration Statement on Form S-4 (Registration No. 333-15809) 4(a)(1) Certificate of Incorporation of Core Molding Incorporated by reference to Technologies, Inc. as filed with the Exhibit 4(a) to Registration Secretary of State of Delaware on Statement on Form S-8 October 8, 1996 (Registration No. 333-29203) 4(a)(2) Certificate of Amendment of Certificate Incorporated by reference to of Incorporation of Core Materials Exhibit 4(b) to Registration Corporation as filed with the Secretary of Statement on Form S-8 State of Delaware on November 6, 1996 (Registration No. 333-29203) 4(a)(3) Certificate of Incorporation of Core Incorporated by reference to Materials Corporation, reflecting amendments Exhibit 4(c) to Registration through November 6, 1996 [for purposes of Statement on Form S-8 compliance with Securities and Exchange (Registration No. 333-29203) Commission filing requirements only] 4(a)(4) Certificate of Amendment of Certificate of Incorporated by reference to Incorporation as filed with the Secretary of Exhibit 3(a)(4) to Quarterly State of Delaware on August 28, 2002 Report on Form 10-Q for the quarter ended September 30, 2002 4(b) By-Laws of Core Molding Technologies, Inc. Incorporated by reference to Exhibit 3-C to Registration Statement on Form S-4 (Registration No. 333-15809) 11 Computation of Net Income per Share Exhibit 11 omitted because the required information is Included in Notes to Financial Statement 31(a) Section 302 Certification by James L. Filed Herein Simonton, President and Chief Executive Officer 31(b) Section 302 Certification by Herman F. Dick Filed Herein Jr., Treasurer and Chief Financial Officer
21
EXHIBIT NO. DESCRIPTION LOCATION - ----------- ----------- -------- 32(a) Certification of James L. Simonton, Chief Filed Herein Executive Officer of Core Molding Technologies, Inc., dated November 14, 2005, pursuant to 18 U.S.C. Section 1350 32(b) Certification of Herman F. Dick, Jr., Chief Filed Herein Financial Officer of Core Molding Technologies, Inc., dated November 14, 2005, pursuant to 18 U.S.C. Section 1350
(1) The Asset Purchase Agreement, as filed with the Securities and Exchange Commission at Exhibit 2-A to Registration Statement on Form S-4 (Registration No. 333-15809), omits the exhibits (including, the Buyer Note, Special Warranty Deed, Supply Agreement, Registration Rights Agreement and Transition Services Agreement, identified in the Asset Purchase Agreement) and schedules (including, those identified in Sections 1, 3, 4, 5, 6, 8 and 30 of the Asset Purchase Agreement. Core Molding Technologies, Inc. will provide any omitted exhibit or schedule to the Securities and Exchange Commission upon request. 22 EX-31.A 2 l16383aexv31wa.txt EXHIBIT 31(A) EXHIBIT 31(A) SECTION 302 CERTIFICATION I, James L. Simonton, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Core Molding Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2005 /s/ James L. Simonton --------------------------------------- James L. Simonton President, Chief Executive Officer and Director 23 EX-31.B 3 l16383aexv31wb.txt EXHIBIT 31(B) EXHIBIT 31(B) SECTION 302 CERTIFICATION I, Herman F. Dick, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Core Molding Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2005 /s/ Herman F. Dick, Jr. --------------------------------------- Herman F. Dick, Jr. Treasurer and Chief Financial Officer 24 EX-32.A 4 l16383aexv32wa.txt EXHIBIT 32(A) EXHIBIT 32(A) CORE MOLDING TECHNOLOGIES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Core Molding Technologies, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James L. Simonton, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ James L. Simonton --------------------------------------- James L. Simonton President, Chief Executive Officer and Director November 14, 2005 25 EX-32.B 5 l16383aexv32wb.txt EXHIBIT 32(B) EXHIBIT 32(B) CORE MOLDING TECHNOLOGIES, INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Core Molding Technologies, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Herman F. Dick, Jr., Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Herman F. Dick, Jr. --------------------------------------- Herman F. Dick, Jr. Treasurer and Chief Financial Officer November 14, 2005 26 -----END PRIVACY-ENHANCED MESSAGE-----