10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

o 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 incorporation or organization)	(I.R.S. Employer Identification No.)

800 Manor Park Drive, 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 þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer,” and “smaller reporting company,” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No þ

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered	Trading Symbol
Common Stock, par value $0.01	NYSE American LLC	CMT

As of August 7, 2020, the latest practicable date, 8,501,229 shares of the registrant’s common stock were issued, which includes 535,940 shares of unvested restricted common stock.

Table of Contents

Part I — Financial Information
Item 1. Financial Statements
Consolidated Statements of Income (Loss)	3
Consolidated Statements of Comprehensive Income (Loss)	4
Consolidated Balance Sheets	5
Consolidated Statements of Stockholders’ Equity	6
Consolidated Statements of Cash Flows	8
Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	33
Part II — Other Information
Item 1. Legal Proceedings	34
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults Upon Senior Securities	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information	34
Item 6. Exhibits	34
Signatures	35
Index to Exhibits	36

2

Item 1. Financial Statements

Part I — Financial Information

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Net sales	$	37,806,000		$	81,247,000		101,830,000			153,513,000
Cost of sales	34,903,000			72,756,000			88,161,000			141,872,000
Gross margin	2,903,000			8,491,000			13,669,000			11,641,000
Selling, general and administrative expense	4,109,000			7,224,000			10,614,000			14,390,000
Operating income (loss)	(1,206,000		)	1,267,000			3,055,000			(2,749,000		)
Other income and expense
Interest expense	1,197,000			869,000			2,371,000			1,765,000
Net periodic post-retirement benefit	(20,000		)	(24,000		)	(40,000		)	(48,000		)
Total other income and expense	1,177,000			845,000			2,331,000			1,717,000
Income (loss) before taxes	(2,383,000		)	422,000			724,000			(4,466,000		)
Income tax expense (benefit)	(111,000		)	213,000			(4,965,000		)	(830,000		)
Net income (loss)	$	(2,272,000	)	$	209,000		$	5,689,000		$	(3,636,000	)
Net income (loss) per common share:
Basic	$	(0.29	)	$	0.03		$	0.67		$	(0.47	)
Diluted	$	(0.29	)	$	0.03		$	0.67		$	(0.47	)

See notes to unaudited consolidated financial statements.

3

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Net income (loss)	$	(2,272,000	)	$	209,000		$	5,689,000		$	(3,636,000	)
Other comprehensive income (loss):
Foreign currency hedging derivatives:
Unrealized hedge gain (loss)	803,000			270,000			(871,000		)	794,000
Income tax benefit (expense)	(174,000		)	(68,000		)	186,000			(202,000		)
Interest rate swaps:
Unrealized hedge gain (loss)	61,000			(468,000		)	(722,000		)	(722,000		)
Income tax benefit (expense)	(14,000		)	106,000			164,000			164,000
Post retirement benefit plan adjustments:
Net actuarial gain	45,000			31,000			90,000			60,000
Prior service costs	(124,000		)	(125,000		)	(248,000		)	(250,000		)
Income tax benefit	16,000			20,000			33,000			40,000
Comprehensive income (loss)	$	(1,659,000	)	$	(25,000	)	$	4,321,000		$	(3,752,000	)

See notes to unaudited consolidated financial statements.

4

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30, 2020			December 31,
	(Unaudited)			2019
Assets:
Current assets:
Cash and cash equivalents	$	4,604,000		$	1,856,000
Accounts receivable, net	21,582,000			32,424,000
Inventories, net	16,225,000			21,682,000
Income tax receivable	6,870,000			652,000
Prepaid expenses and other current assets	2,248,000			4,611,000
Total current assets	51,529,000			61,225,000
Right of use asset	3,832,000			4,484,000
Property, plant and equipment, net	76,528,000			79,206,000
Goodwill	17,376,000			17,376,000
Intangibles, net	12,490,000			13,464,000
Other non-current assets	3,363,000			3,551,000
Total Assets	$	165,118,000		$	179,306,000
Liabilities and Stockholders’ Equity:
Current liabilities:
Current portion of long-term debt	$	35,360,000		$	49,451,000
Accounts payable	11,955,000			19,910,000
Contract liabilities	3,078,000			3,698,000
Compensation and related benefits	6,508,000			5,515,000
Accrued other liabilities	6,973,000			5,260,000
Total current liabilities	63,874,000			83,834,000
Long-term debt	135,000			—
Other non-current liabilities	3,703,000			3,119,000
Post retirement benefits liability	7,954,000			7,927,000
Total Liabilities	$	75,666,000		$	94,880,000
Commitments and Contingencies	—			—
Stockholders’ Equity:
Preferred stock — $0.01 par value, authorized shares — 10,000,000; no shares outstanding at June 30, 2020 and December 31, 2019	—			—
Common stock — $0.01 par value, authorized shares – 20,000,000; outstanding shares: 7,965,289 at June 30, 2020 and 7,877,945 December 31, 2019	80,000			79,000
Paid-in capital	35,476,000			34,772,000
Accumulated other comprehensive income (loss), net of income taxes	2,000			1,370,000
Treasury stock - at cost, 3,806,355 at June 30, 2020 and December 31, 2019	(28,501,000		)	(28,501,000		)
Retained earnings	82,395,000			76,706,000
Total Stockholders’ Equity	89,452,000			84,426,000
Total Liabilities and Stockholders’ Equity	$	165,118,000		$	179,306,000

See notes to unaudited consolidated financial statements.

5

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(Unaudited)

For the three months ended June 30, 2019:

	Common Stock Outstanding				Paid-In Capital		Accumulated Other Comprehensive Income			Treasury Stock			Retained Earnings		Total Stockholders’ Equity
	Shares		Amount
Balance at March 31, 2019	7,785,161		$	78,000	$	33,558,000	$	2,236,000		$	(28,403,000	)	$	88,084,000	$	95,553,000
Net income													209,000		209,000
Change in post retirement benefits, net of tax benefit of $20,000							(75,000		)						(75,000		)
Change in unrealized foreign currency hedge, net of tax of $68,000							202,000								202,000
Change in interest rate swaps, net of tax benefit of $106,000							(362,000		)						(362,000		)
Purchase of treasury stock	(7,744	)								(60,000		)			(60,000		)
Restricted stock vested	77,319		1,000												1,000
Share-based compensation					516,000										516,000
Balance at June 30, 2019	7,854,736		$	79,000	$	34,074,000	$	2,001,000		$	(28,463,000	)	$	88,293,000	$	95,984,000

For the six months ended June 30, 2019:

	Common Stock Outstanding				Paid-In Capital		Accumulated Other Comprehensive Income			Treasury Stock			Retained Earnings			Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2018	7,776,164		$	78,000	$	33,208,000	$	2,117,000		$	(28,403,000	)	$	91,929,000		$	98,929,000
Net loss													(3,636,000		)	(3,636,000		)
Change in post retirement benefits, net of tax benefit of $40,000							(150,000		)							(150,000		)
Change in unrealized foreign currency hedge, net of tax of $202,000							592,000									592,000
Change in interest rate swaps, net of tax benefit of $164,000							(558,000		)							(558,000		)
Purchase of treasury stock	(7,744	)								(60,000		)				(60,000		)
Restricted stock vested	86,316		1,000													1,000
Share-based compensation					866,000											866,000
Balance at June 30, 2019	7,854,736		$	79,000	$	34,074,000	$	2,001,000		$	(28,463,000	)	$	88,293,000		$	95,984,000

6

For the three months ended June 30, 2020:

	Common Stock Outstanding			Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Retained Earnings			Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2020	7,882,716	$	79,000	$	35,088,000	$	(611,000	)	$	(28,501,000	)	$	84,667,000		$	90,722,000
Net loss												(2,272,000		)	(2,272,000		)
Change in post retirement benefits, net of tax benefit of $16,000						(63,000		)							(63,000		)
Change in unrealized foreign currency hedge, net of tax of $174,000						629,000									629,000
Change in interest rate swaps, net of tax of $14,000						47,000									47,000
Restricted stock vested	82,573	1,000													1,000
Share-based compensation				388,000											388,000
Balance at June 30, 2020	7,965,289	$	80,000	$	35,476,000	$	2,000		$	(28,501,000	)	$	82,395,000		$	89,452,000

For the six months ended June 30, 2020:

	Common Stock Outstanding			Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	7,877,945	$	79,000	$	34,772,000	$	1,370,000		$	(28,501,000	)	$	76,706,000	$	84,426,000
Net income												5,689,000		5,689,000
Change in post retirement benefits, net of tax benefit of $33,000						(125,000		)						(125,000		)
Change in unrealized foreign currency hedge, net of tax benefit of $186,000						(685,000		)						(685,000		)
Change in interest rate swaps, net of tax benefit of $164,000						(558,000		)						(558,000		)
Restricted stock vested	87,344	1,000												1,000
Share-based compensation				704,000										704,000
Balance at June 30, 2020	7,965,289	$	80,000	$	35,476,000	$	2,000		$	(28,501,000	)	$	82,395,000	$	89,452,000

See notes to unaudited consolidated financial statements.

7

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	5,689,000		$	(3,636,000	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	5,588,000			5,180,000
Deferred income tax	517,000			—
Share-based compensation	704,000			866,000
Losses (Gains) on foreign currency translation	(45,000		)	17,000
Change in operating assets and liabilities:
Accounts receivable	10,842,000			(2,745,000		)
Inventories	5,457,000			1,798,000
Prepaid and other assets	(3,667,000		)	2,367,000
Accounts payable	(7,910,000		)	(1,412,000		)
Accrued and other liabilities	1,438,000			1,060,000
Post retirement benefits liability	(130,000		)	(198,000		)
Net cash provided by operating activities	18,483,000			3,297,000
Cash flows from investing activities:
Purchase of property, plant and equipment	(1,644,000		)	(5,201,000		)
Net cash used in investing activities	(1,644,000		)	(5,201,000		)
Cash flows from financing activities:
Gross repayments on revolving line of credit	(59,357,000		)	(98,473,000		)
Gross borrowings on revolving line of credit	47,349,000			101,201,000
Proceeds from term loan	175,000			—
Payment of principal on term loans	(2,258,000		)	(1,688,000		)
Payment of deferred loan costs	—			(434,000		)
Payments related to the purchase of treasury stock	—			(60,000		)
Net cash provided by (used in) financing activities	(14,091,000		)	546,000
Net change in cash and cash equivalents	2,748,000			(1,358,000		)
Cash and cash equivalents at beginning of period	1,856,000			1,891,000
Cash and cash equivalents at end of period	$	4,604,000		$	533,000
Cash paid for:
Interest	$	2,377,000		$	1,660,000
Income taxes	$	302,000		$	1,016,000
Non cash:
Fixed asset purchases in accounts payable	$	146,000		$	368,000

See notes to unaudited consolidated financial statements.

8

Core Molding Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited 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 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” or the “Company”) at June 30, 2020, and the results of operations and cash flows for the six months ended June 30, 2020. The Company has reclassified certain prior-year amounts to conform to the current-year's presentation. The “Notes to Consolidated Financial Statements” contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, should be read in conjunction with these consolidated financial statements.

Core Molding Technologies and its subsidiaries operate in the composites market as one operating segment as a molder of thermoplastic and thermoset structural products. The Company's operating segment consists of two component reporting units, Core Traditional and Horizon Plastics. The Company produces and sells molded products for varied markets, including medium and heavy-duty trucks, automobiles, marine, construction and other commercial markets. The Company offers customers a wide range of manufacturing processes to fit various program volume and investment requirements. These processes include compression molding of sheet molding compound ("SMC"), bulk molding compounds ("BMC"), resin transfer molding ("RTM"), liquid molding of dicyclopentadiene ("DCPD"), spray-up and hand-lay-up, glass mat thermoplastics ("GMT"), direct long-fiber thermoplastics ("D-LFT") and structural foam and structural web injection molding ("SIM"). Core Molding Technologies has its headquarters in Columbus, Ohio, and operates seven production facilities in Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota; Matamoros and Escobedo, Mexico; and Cobourg, Ontario, Canada. All produce structural composite products.

2. CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments. 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, due to the uncertainty around the magnitude and duration of the COVID-19 pandemic, as well as other factors.

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.

Going Concern: Under FASB ASU 2014-15, “Presentation of Financial Statements - Going Concern,” management is required to evaluate conditions or events as related to uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern and to provide related financial disclosures, as applicable. Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As further discussed in Note 11, "Debt", as of June 30, 2020, the Company was not in compliance with the leverage and fixed charge coverage ratio requirements under the Company's Amended and Restated Credit Agreement, dated January 16, 2018 (the “A/R Credit Agreement”), with KeyBank National Association as the administrative agent (the "Administrative Agent") and various other financial institutions thereto as lenders (the "Lenders").

On November 22, 2019, the Company entered into a forbearance agreement (the "Forbearance Agreement") with the Lenders. Pursuant to the Forbearance Agreement, the Borrowers and the Lenders acknowledged and confirmed that an event of default occurred under the A/R Credit Agreement resulting from the Borrowers failure to maintain the required fixed charge coverage ratio (as defined in the A/R Credit Agreement) for the fiscal quarter ended September 30, 2019. The Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through March 13, 2020, as long as the Company satisfies the conditions set forth in the Forbearance Agreement. See additional detail in Note 11, "Debt".

On March 13, 2020, the Company amended the Forbearance Agreement and entered into the First Amendment to the Forbearance

9

Agreement (the “First Amended Forbearance Agreement”) with the Lenders. The First Amended Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through May 29, 2020, as long as the Company satisfies the conditions set forth in the First Amended Forbearance Agreement. See additional detail in Note 11, "Debt".

As a result of the COVID-19 pandemic several of the Company’s major customers suspended operations during April and May 2020 due to reduced demand and the impact of government regulations and mandates. Potential new lenders required Company’s customers to resume operations before proceeding with refinancing. On May 29, 2020, the Company amended the First Amended Forbearance Agreement and entered into the Second Amendment to the Forbearance Agreement (the “Second Amended Forbearance Agreement”) with the Lenders. The Second Amended Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through September 30, 2020, as long as the Company satisfies the conditions set forth in the Amended Forbearance Agreement. See additional detail in Note 11, "Debt".

As a result of non-compliance with the A/R Credit Agreement, the Company’s remaining borrowings under the A/R Credit Agreement, consisting of $36,000,000 in borrowings under the revolving credit commitment and the loan commitments, were classified as a current liability in the Company’s consolidated balance sheet as of June 30, 2020. As a result, the Company’s current liabilities exceeded its current assets by $12,345,000 as of June 30, 2020. If the Lenders were to call the loans or demand repayment of all existing borrowings, this could result in the Company being unable to meet its working capital obligations.

The Company has executed term sheets with new lenders to obtain financing to refinance the A/R Credit Agreement. Closing of the new financing is subject to normal closing conditions including completion of business and legal due diligence, asset appraisals, environmental reports, negotiated loan documents, and final credit committee approval. While the Company has executed term sheets, the Company will not have firm commitments until the completion of all closing conditions and therefore there can be no assurances that the Company will be able to secure additional financing. As there can be no assurance that the Company will be able to close its new financing, substantial doubt exists as to the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company's consolidated financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty.

Management implemented an operational turnaround plan starting in December of 2018 and successfully improved operational performance including improved equipment uptime, improved employee retention and reduced premium freight costs for expediting shipments to customers. Even with the negative effects of the COVID-19 pandemic reductions in sales and partial shutdown of operations, the Company’s financial results for the six months ended June 30, 2020 reflect the operational improvements implemented in 2019 as the Company returned to operational profitability. Management believes that the operational turnaround is complete and is now focused on continuous improvement and operational excellence. Management has made, or is in the process of making, the following continuous improvement actions which will further improve financial performance at its operating facilities:

• Implemented quality management systems that provide for continual improvement, defect prevention and reduction of variation and waste in manufacturing processes

• Improved inventory management systems to reduce stock outage events which cause downtime and labor inefficiency

• Implemented the improved mold and waterjet fixture change procedures to reduce production equipment downtime.

• Conducted value add/value engineer projects with customers to remove waste from the operating process and reduce cost

• Implementation of focused problem solving to improve quality and reduce scrap costs

• Implemented cost saving measures and actions to align controllable spending and labor workforce to reduced sales volumes in the current market as a result of the COVID-19 pandemic

• Implemented technical training programs specific to the Company’s products and processes

• Improved free cash flow through improved terms with customers and vendors

• Utilized the Kaizen techniques, process mapping and multi-functional problem solving teams to improve operational performance and reduce waste

The Company’s improved operational performance and free cash flows has resulted in a reduction of borrowings under the A/R Credit Agreement for the six months ended June 30, 2020 of $14,258,000.

The Company has a tax receivable of $5,688,000 as of June 30, 2020, due to tax law changes made by the Coronavirus Aid Relief and Economic Security Act (the "CARES Act") which will allow the Company to carryback tax net operating losses. (See Note 12, "Income Taxes") The Company has completed the required filing with the Internal Revenue Service to claim the tax refund and expects to receive the payment prior to September 30, 2020. The funds from the utilization of the net operating losses will provide additional financial resources for the Company to operate the business and refinance its existing debt.

10

Revenue Recognition: The Company recognizes revenue from two streams, product revenue and tooling revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products. Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. In certain circumstances, the Company recognizes revenue from product sales when products are produced and the customer takes control at our production facility.

Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer. Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools.

Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.

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 the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company recorded an allowance for doubtful accounts of $109,000 and $50,000 at June 30, 2020 and December 31, 2019, respectively.

Management also records an allowance for estimated customer chargebacks for returns, price discounts and adjustments, premium freight and expediting costs and customer production line disruption costs resulting from late deliveries. At times, customers have asserted a right to significant production line disruption charges to recover damages as a result of late delivery. The Company typically works with its customers to minimize disruption charges, validate damages and negotiate resolution. The Company records accruals for customer chargebacks when a valid charge is probable and the amount of the charge can be reasonably estimated. Should customer chargebacks fluctuate from the estimated amounts, additional allowances may be necessary. The Company reduced accounts receivable for chargebacks by $148,000 at June 30, 2020 and $476,000 at December 31, 2019.

Inventories: Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable value. 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. The Company has recorded an allowance for slow moving and obsolete inventory of $823,000 at June 30, 2020 and $898,000 at December 31, 2019.

Contract Assets/Liabilities: Contract assets and liabilities represent the net cumulative customer billings, vendor payments and revenue recognized for tooling programs. For tooling programs where net revenue recognized and vendor payments exceed customer billings, the Company recognizes a contract asset. For tooling programs where net customer billings exceed revenue recognized and vendor payments, the Company recognizes a contract liability. Customer payment terms vary by contract and can range from progress payments based on work performed or one single payment once the contract is completed. The Company has recorded contract assets of $61,000 as of June 30, 2020and $888,000 at December 31, 2019. Contract assets are generally classified as current within prepaid expenses and other current assets on the Consolidated Balance Sheets. During the six months ended June 30, 2020, the Company recognized no impairments on contract assets. For the six months ended June 30, 2020, the Company recognized $729,000 amount of revenue from contract liabilities outstanding as of December 31, 2019.

Income Taxes: The Company’s Consolidated Balance Sheets include a net non-current deferred tax asset of $2,026,000 for the Canadian and Mexican tax jurisdictions and a net non-current deferred tax liability of $517,000 for the U.S. tax jurisdiction at June 30, 2020. The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. For more information, refer to Note 12, "Income Taxes", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Derivative Instruments: Derivative instruments are utilized to manage exposure to fluctuations in foreign currency exchange rates and interest rates on long term debt obligations. All derivative instruments are formally documented as cash flow hedges and are recorded at fair value at each reporting period. Gains and losses related to currency forward contracts and interest rate swaps are

11

deferred and recorded as a component of Accumulated Other Comprehensive Income (Loss) in the Consolidated Statement of Stockholders' Equity and then subsequently recognized in the Consolidated Statement of Income (Loss) when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income. For additional information on derivative instruments, see Note 14, "Fair Value of Financial Instruments".

Long-Lived Assets: Long-lived assets consist primarily of property, plant and equipment and definite-lived intangibles. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. The Company evaluates whether impairment exists for property, plant and equipment on the basis of undiscounted expected future cash flows from operations before interest. There was no impairment of the Company's long-lived assets for the six months ended June 30, 2020 or June 30, 2019.

Goodwill and Other Intangibles: The Company evaluates goodwill annually on December 31 to determine whether impairment exists, or at interim periods if an indicator of possible impairment exists. As a result of the Horizon Plastics acquisition on January 16, 2018 and the status of its integration, the Company established two reporting units, Core Traditional and Horizon Plastics. The annual impairment tests of goodwill may be completed through qualitative assessments, however the Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any reporting unit in any period. The Company may resume the qualitative assessment for any reporting unit in any subsequent period.

Due to the Company's financial performance and continued depressed stock price, the Company performed a quantitative analysis for both of its reporting units at September 30, 2019. During 2019, the Company incurred a loss of margin in its Horizon Plastics reporting unit caused by selling price decreases that the Company has not been able to fully offset with material cost reductions. As a result of the quantitative analysis, the Company concluded that the carrying value of Horizon Plastics was greater than the fair value, which resulted in a goodwill impairment charge of $4,100,000 at September 30, 2019 representing 19% of the goodwill related to the Horizon Plastics reporting unit.

There were no indicators of impairment for the six months ended June 30, 2020 that would trigger additional analysis; however, should the Company experience a prolonged suspension of operations due to COVID-19, the Company may incur goodwill and intangible impairment charges in the future.

Self-Insurance: The Company is self-insured with respect to its Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota and Brownsville, Texas for medical, dental and vision claims and Columbus and Batavia, Ohio for workers’ compensation claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental, vision and worker’s compensation claims incurred but not reported at June 30, 2020 and December 31, 2019 of $901,000 and $1,203,000, respectively.

Post-retirement benefits: The Company records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain employees. 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 the Company's operations. The effect of a change in healthcare costs is described in Note 13, "Post Retirement Benefits", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company had a liability for post retirement healthcare benefits based on actuarially computed estimates of $9,187,000 at June 30, 2020 and $9,160,000 at December 31, 2019.

Government subsidies: The Company received $1,391,000 in government subsidies during the three and six months ended June 30, 2020. The Company accounted for government subsidies in accordance with International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The Company recorded the assistance in selling, general and administrative expenses and determined that there is reasonable assurance all conditions attached to the assistance were met and the grants would be received. The government subsidies consisted of the Canadian Emergency Wage Subsidy and the Shared Work Programs of Ohio, South Carolina and Minnesota.

12

3. RECENT ACCOUNTING PRONOUNCEMENTS

Current expected credit loss (CECL)

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” for the purpose of clarifying certain aspects of ASU 2016-13. ASU 2018-19 has the same effective date and transition requirements as ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” which is effective with the adoption of ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments - Credit Losses (Topic 326),” which is also effective with the adoption of ASU 2016-13. In November 2019, the FASB voted to delay the implementation date for certain companies, including those that qualify as a smaller reporting company under SEC rules, until fiscal years beginning after December 15, 2022. We will adopt this ASU on its effective date of January 1, 2023. We do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations, cash flows, or presentation thereof.

Facilitation of the Effects of Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848).  The ASU provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.  The ASU is effective as of March 12, 2020 through December 31, 2022.  We will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. 

4. NET INCOME (LOSS) PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to the Company's common shares. The Company uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020			2019		2020		2019
Net income (loss)	$	(2,272,000	)	$	209,000	$	5,689,000	$	(3,636,000	)
Less: net income allocated to participating securities	—			10,000		358,000		—
Net income (loss) available to common shareholders	(2,272,000		)	199,000		5,331,000		(3,636,000		)
Weighted average common shares outstanding — basic	7,916,000			7,822,000		7,899,000		7,786,000
Effect of dilutive securities	—			—		—		—
Weighted average common and potentially issuable common shares outstanding — diluted	7,916,000			7,822,000		7,899,000		7,786,000
Basic net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)
Diluted net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)

13

5. MAJOR CUSTOMERS

The Company had five major customers during the six months ended June 30, 2020, Navistar, Inc. (“Navistar”), Volvo Group North America, LLC (“Volvo”), Universal Forest Products, Inc. (“UFP”), PACCAR, Inc. (“PACCAR”) and BRP, Inc. (“BRP”). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales during any annual or interim reporting period in the current year. The loss of a significant portion of sales to these customers would have a material adverse effect on the business of the Company.

The following table presents sales revenue for the above-mentioned customers for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
UFP product sales	$	9,484,000	$	9,203,000	$	18,471,000	$	15,325,000
UFP tooling sales	—		—		—		—
Total UFP sales	9,484,000		9,203,000		18,471,000		15,325,000
Navistar product sales	6,500,000		17,043,000		17,166,000		31,296,000
Navistar tooling sales	1,088,000		743,000		1,186,000		782,000
Total Navistar sales	7,588,000		17,786,000		18,352,000		32,078,000
Volvo product sales	2,167,000		14,581,000		9,740,000		29,096,000
Volvo tooling sales	622,000		32,000		2,147,000		139,000
Total Volvo sales	2,789,000		14,613,000		11,887,000		29,235,000
PACCAR product sales	3,167,000		12,435,000		11,116,000		24,247,000
PACCAR tooling sales	—		987,000		207,000		1,160,000
Total PACCAR sales	3,167,000		13,422,000		11,323,000		25,407,000
BRP product sales	2,206,000		2,429,000		9,453,000		7,977,000
BRP tooling sales	113,000		38,000		333,000		129,000
Total BRP sales	2,319,000		2,467,000		9,786,000		8,106,000
Other product sales	12,323,000		19,749,000		31,831,000		38,951,000
Other tooling sales	136,000		4,007,000		180,000		4,411,000
Total other sales	12,459,000		23,756,000		32,011,000		43,362,000
Total product sales	35,847,000		75,440,000		97,777,000		146,892,000
Total tooling sales	1,959,000		5,807,000		4,053,000		6,621,000
Total sales	$	37,806,000	$	81,247,000	$	101,830,000	$	153,513,000

6. INVENTORY

Inventories consisted of the following:

	June 30, 2020		December 31, 2019
Raw materials	$	10,558,000	$	13,041,000
Work in process	1,623,000		1,818,000
Finished goods	4,044,000		6,823,000
	$	16,225,000	$	21,682,000

Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based on historical and anticipated usage.

14

7. LEASES

The Company has operating leases with fixed payment terms for certain buildings and warehouses. The Company's leases have remaining lease terms of less than one year to four years, some of which include options to extend the lease for five years. Operating leases are included in operating lease right-of-use ("ROU") assets, and operating lease liabilities in the Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The Company used the applicable incremental borrowing rate at implementation date to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated, the Company will utilize its incremental borrowing rate to perform lease classification tests on lease components and to measure ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	357,000	$	358,000	$	714,000	$	715,000
Total net lease cost	$	357,000	$	358,000	$	714,000	$	715,000

Other supplemental balance sheet information related to leases was as follows:

	June 30, 2020			December 31, 2019
Operating Leases:
Operating lease right of use assets	$	3,832,000		$	4,484,000
Total operating lease right of use assets	$	3,832,000		$	4,484,000
Current operating lease liabilities(A)	$	743,000		$	1,304,000
Noncurrent operating lease liabilities (B)	3,028,000			3,119,000
Total operating lease liabilities	$	3,771,000		$	4,423,000
Weighted average remaining lease term (in years):
Operating leases	3.8			4.0
Weighted average discount rate:
Operating leases	5.0		%	4.9		%

^(A)Current operating lease liabilities are included in accrued other liabilities on the Consolidated Balance Sheets.

^(B) Noncurrent operating lease liabilities are included in other non-current liabilities on the Consolidated Balance Sheets.

Other information related to leases were as follows:

	Six Months Ended
	June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases(C)	$	714,000	$	715,000

^(C)Cash flow from operating lease included in prepaid and other assets on the Consolidated Statements of Cash Flows.

15

As of June 30, 2020, maturities of lease liabilities were as follows:

	Operating Leases
2020 (remainder of year)	$	716,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	4,522,000
Less: imputed interest	(751,000		)
Total lease obligations	3,771,000
Less: current obligations	(743,000		)
Long-term lease obligations	$	3,028,000

As of December 31, 2019, maturities of lease liabilities were as follows:

	Operating Leases
2020	$	1,433,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	5,239,000
Less: imputed interest	(816,000		)
Total lease obligations	4,423,000
Less: current obligations	(1,304,000		)
Long-term lease obligations	$	3,119,000

8. PROPERTY, PLANT & EQUIPMENT

Property, plant and equipment consisted of the following for the periods specified:

	June 30, 2020			December 31, 2019
Property, plant and equipment	$	172,683,000		$	170,881,000
Accumulated depreciation	(96,155,000		)	(91,675,000		)
Property, plant and equipment — net	$	76,528,000		$	79,206,000

Property, plant, and equipment are recorded at cost, unless obtained through acquisition, then assets are recorded at estimated fair value at the date of acquisition. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The carrying amount of long-lived assets is evaluated annually to determine if an adjustment to the depreciation period or to the unamortized balance is warranted. Depreciation expense for the three months ended June 30, 2020 and 2019 was $2,216,000 and $2,075,000, respectively. Depreciation expense for the six months ended June 30, 2020 and 2019 was $4,488,000 and $4,101,000, respectively. Amounts invested in capital additions in progress were $1,973,000 and $1,615,000 at June 30, 2020 and December 31, 2019, respectively. At June 30, 2020 and December 31, 2019, purchase commitments for capital expenditures in progress were $917,000 and $336,000, respectively.

16

9. GOODWILL AND INTANGIBLES

Goodwill activity for the six months ended June 30, 2020 consisted of the following:

Balance at December 31, 2019	$	17,376,000
Additions	—
Impairment	—
Balance at June 30, 2020	$	17,376,000

Intangible assets at June 30, 2020 were comprised of the following:

Definite-lived Intangible Assets	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade Name	25 Years	$	250,000	$	(53,000	)	$	197,000
Trademarks	10 Years	1,610,000		(395,000		)	1,215,000
Non-competition Agreement	5 Years	1,810,000		(890,000		)	920,000
Developed Technology	7 Years	4,420,000		(1,552,000		)	2,868,000
Customer Relationships	10-12 Years	9,330,000		(2,040,000		)	7,290,000
Total		$	17,420,000	$	(4,930,000	)	$	12,490,000

The aggregate intangible asset amortization expense was $487,000 for the three months ended June 30, 2020 and 2019, respectively. The aggregate intangible asset amortization expense was $974,000 for the six months ended June 30, 2020 and 2019, respectively.

Intangible assets at December 31, 2019 were comprised of the following:

Definite-lived Intangible Assets	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade Name	25 Years	$	250,000	$	(48,000	)	$	202,000
Trademarks	10 Years	1,610,000		(315,000		)	1,295,000
Non-competition Agreement	5 Years	1,810,000		(709,000		)	1,101,000
Developed Technology	7 Years	4,420,000		(1,237,000		)	3,183,000
Customer Relationships	10-12 Years	9,330,000		(1,647,000		)	7,683,000
Total		$	17,420,000	$	(3,956,000	)	$	13,464,000

17

10. POST RETIREMENT BENEFITS

The components of expense for the Company's post-retirement benefit plans for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Pension expense:
Multi-employer plan	$	145,000		$	231,000		$	391,000		$	462,000
Defined contribution plan	215,000			324,000			508,000			586,000
Total pension expense	360,000			555,000			899,000			1,048,000
Health and life insurance:
Interest cost	59,000			72,000			118,000			144,000
Amortization of prior service costs	(124,000		)	(125,000		)	(248,000		)	(250,000		)
Amortization of net loss	45,000			29,000			90,000			58,000
Net periodic benefit cost	(20,000		)	(24,000		)	(40,000		)	(48,000		)
Total post retirement benefits expense	$	340,000		$	531,000		$	859,000		$	1,000,000

The Company made payments of $511,000 to pension plans and $91,000 for post-retirement healthcare and life insurance during the six months ended June 30, 2020. For the remainder of 2020, the Company expects to make approximately $1,385,000 of pension plan payments, of which $839,000 was accrued at June 30, 2020. The Company also expects to make approximately $1,142,000 of post-retirement healthcare and life insurance payments for the remainder of 2020, all of which were accrued at June 30, 2020.

11. DEBT

Debt consists of the following:

	June 30, 2020			December 31, 2019
Term loans, interest at a variable rate (8.0% at June 30, 2020 and 6.30% at December 31, 2019) with monthly payments of interest and quarterly payments of principal through January 2023	$	36,000,000		$	38,250,000
Revolving loans, interest at a variable rate (8.0% at June 30, 2020 and 6.04% at December 31, 2019)	—			12,008,000
Term loan, interest at a fixed rate (5.5% at June 30, 2020) with monthly payments of interest and principal through April 2025	167,000			—
Total	36,167,000			50,258,000
Less deferred loan costs	(672,000		)	(807,000		)
Less current portion	(35,360,000		)	(49,451,000		)
Long-term debt	$	135,000		$	—

Credit Agreement

On January 16, 2018, the Company entered into an Amended and Restated Credit Agreement (the "A/R Credit Agreement") with KeyBank National Association as administrative agent and various financial institutions party thereto as lenders (the "Lenders"). Pursuant to the terms of the A/R Credit Agreement (i) the Company may borrow revolving loans in the aggregate principal amount of up to $40,000,000 (the “U.S. Revolving Loans”) from the Lenders and term loans in the aggregate principal amount of up to $32,000,000 from the Lenders, (ii) the Company's wholly-owned subsidiary, Horizon Plastics International, Inc., (the "Subsidiary") may borrow revolving loans in an aggregate principal amount of up to $10,000,000 from the Lenders (which revolving loans shall reduce the availability of the U.S. Revolving Loans to the Company on a dollar-for-dollar basis) and term loans in an aggregate principal amount of up to $13,000,000 from the Lenders, (iii) the Company obtained a Letter of Credit Commitment of $250,000, of which $160,000 has been issued and (iv) the Company repaid the outstanding term loan balance of $6,750,000. The Credit

18

Agreement is secured by a guarantee of each U.S. and Canadian subsidiary of the Company, and by a lien on substantially all of the present and future assets of the Company and its U.S. and Canadian subsidiaries, except that only 65% of the stock issued by Corecomposites de Mexico, S. de R.L. de C.V. has been pledged.

Concurrent with the closing of the A/R Credit Agreement the Company borrowed the $32,000,000 term loan and $2,000,000 from the U.S. Revolving Loan and the Subsidiary borrowed the $13,000,000 term loan and $2,500,000 from revolving loans to provide $49,500,000 of funding for the acquisition of Horizon Plastics. Interest is payable monthly at one month LIBOR plus a basis point margin of 700 basis points with a LIBOR floor of 100 basis points.

On March 14, 2019, the Company entered into the first amendment (“First Amendment”) to the A/R Credit Agreement (as amended by the First Amendment, the "Amended Credit Agreement") with the Lenders. Pursuant to the terms of the First Amendment, the Company and Lenders agreed to modify certain terms of the A/R Credit Agreement. These modifications included (1) implementation of an availability block on the U.S. Revolving Loans reducing availability from $40,000,000 to $32,500,000, (2) modification to the definition of EBITDA to add back certain one-time expenses, (3) waiver of non-compliance with the leverage covenant as of December 31, 2018 and modification of the leverage ratio definition and covenant to eliminate testing of the leverage ratio until December 31, 2019, (4) waiver of non-compliance with the fixed charge covenant as of December 31, 2018 and modification of the fixed charge coverage ratio definition and covenant requirement, (5) implementation of a capital expenditure spend limit of $7,500,000 during the first six months of 2019 and $12,500,000 for the full year 2019, (6) an increase of the applicable interest margin spread for existing term and revolving loans, and (7) an increase in the commitment fees on any unused U.S. Revolving Loans.

On November 22, 2019, the Company entered into a forbearance agreement (the "Forbearance Agreement") with the Lenders. Pursuant to the Forbearance Agreement, the Borrowers and the Lenders acknowledged and confirmed that an event of default occurred under the A/R Credit Agreement resulting from the Borrowers failure to maintain the required Fixed Charge Coverage Ratio (as defined in the A/R Credit Agreement) for the fiscal quarter ended September 30, 2019. The Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the Loan Documents described in the A/R Credit Agreement through March 13, 2020, as long as the Company satisfies the conditions set forth in the Forbearance Agreement, including, (i) the Borrowers shall remain current on all loan payments during the forbearance period, (ii) on or before December 6, 2019, the Administrative Agent and Lenders shall each receive a copy of a report of Huron Consulting Group containing findings and observations in respect of the businesses and operations of the Company and the Borrowers shall deliver a strategic alternative assessment in respect of the Borrowers’ operations and financing, (iii) on or before December 15, 2019, the Administrative Agent and Lenders shall each receive a copy of appraisals of machinery and equipment and inventory appraisals, and the Borrowers shall have determined and proposed a new capital structure to the Administrative Agent and Lenders, (iv) on or before February 14, 2020, the Borrowers shall have obtained a definitive, written commitment from involved parties and/or lenders providing the basis for implementation of a new capital structure, and (v) on or before March 13, 2020, the Borrowers shall have closed on a new capital structure, acceptable to the Administrative Agents and Lenders. The Forbearance Agreement also implemented a new availability block with respect to the U.S. Revolving Loans portion of the A/R Credit Agreement, reducing availability from $32,500,000 to $28,000,000 and increasing the applicable margin for existing term and revolving loans, as well as increasing the commitment fees on any unused U.S. Revolving Loans.

On March 13, 2020, the Company amended the Forbearance Agreement and entered into the First Amendment to the Forbearance Agreement (the “First Amended Forbearance Agreement”) with the Lenders. Pursuant to the terms of the First Amended Forbearance Agreement, the Company and Lenders agreed to modify certain terms of the Forbearance Agreement and extend the Forbearance Agreement through May 29, 2020. The modifications include (1) a reduction in the U.S. Revolving Loan to $25,000,000 with an availability block of $5,000,000 which can be borrowed with the approval of the lenders, (2) a change of interest rate to LIBOR plus 650 basis points, (3) forbearing compliance with the leverage covenant and fixed charge covenant through May 29, 2020, and (4) implementation of a capital expenditure spend limit of $3,500,000 from the effective date of the First Amended Forbearance Agreement through May 29, 2020.

On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The parties agreed to a fixed interest rate of 550 basis point and a term of 60 months. The amount outstanding at June 30, 2020 was $167,000 of which, $135,000 was classified as long term debt.

On May 29, 2020, the Company amended the First Amended Forbearance Agreement and entered into the Second Amendment to the Forbearance Agreement (the “Second Amended Forbearance Agreement”) with the Lenders. The Second Amended Forbearance Agreement provided that the Company and the Lenders agreed to modify certain terms of the Amended Forbearance Agreement and extend the Forbearance Agreement through September 30, 2020. The modifications include (1) that the Company will maintain liquidity of not less than $5,000,000, to be measured twice monthly after the effective date, on every second and fourth Friday of each month during the forbearance period, (2) the Company shall maintain minimum year-to-date earnings before

19

income tax, depreciation and amortization (“YTD-EBITDA”) of not less than $5,000,000, measured upon delivery of Company’s July 2020 financial statements and also upon delivery of Company’s August 2020 financial statements, with YTD-EBITDA determined based on consolidated EBITDA, (3) a change of interest rate to LIBOR rate plus 700 basis points with a LIBOR floor of 100 basis points, (4) on or before July 15, 2020 the Borrowers shall have obtained executed term sheets from involved parties and/or lenders, (5) on or before September 30, 2020, the Borrowers shall have closed on a new capital structure, (6) forbearing compliance with the leverage covenant and fixed charge covenant through September 30, 2020, and (7) implementation of a capital expenditure spend limit of $3,000,000 for the nine months ended September 30, 2020. Capitalized terms used in this paragraph but not defined shall have the meaning ascribed to such terms in the Seconded Amended Forbearance Agreement.

As a result of non-compliance with the A/R Credit Agreement, the Company’s remaining borrowings under the A/R Credit Agreement, consisting of $36,000,000 under the revolving credit commitment and the term loan commitments, were classified as a current liability in the Company’s consolidated balance sheet as of June 30, 2020. As a result, the Company’s current liabilities exceeded its current assets by $12,345,000 as of June 30, 2020. If the Lenders were to call the loans or demand repayment of all existing borrowings, this could result in the Company being unable to meet its working capital obligations.

The Company has unblocked maximum availability of $20,000,000 of variable rate revolving loans of which $0 is outstanding as of June 30, 2020.

Bank Covenants

The Company is required to meet certain financial covenants included in the A/R Credit Agreement with respect to leverage ratios, fixed charge ratios and capital expenditures. As of June 30, 2020, the Company was in default with its fixed charge coverage and leverage ratio covenants associated with the loans made under the A/R Credit Agreement as described above. As a result of this default the Company and the Administrative Agent on behalf of the Lenders entered into a Second Amended Forbearance Agreement to address the non-compliance and establish milestones for the Company related to restructuring of its existing debt.

The Company has executed term sheets with new lenders to obtain financing to refinance the A/R Credit Agreement. Closing of the new financing is subject to normal closing conditions including completion of business and legal due diligence, asset appraisals, environmental reports, negotiated loan documents, and final credit committee approval. While the Company has executed term sheets, the Company will not have firm commitments until completion of all closing conditions and therefore there can be no assurances that the Company will be able to secure additional financing. As there can be no assurance that the Company will be able to close its new financing, substantial doubt exists as to the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company's consolidated financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty.

Interest Rate Swaps

The Company entered into two interest rate swap agreements that became effective January 18, 2018 and continue through January 2023, one of which was designated as a cash flow hedge for $25,000,000 of the $32,000,000 term loan to the Company mentioned above and the other designated as a cash flow hedge for $10,000,000 of the $13,000,000 term loan to the Subsidiary mentioned above. Under these agreements, the Company will pay a fixed rate of approximately 2.49% to the counterparty and receives 30 day LIBOR for both cash flow hedges. The fair value of the interest rate swap was a liability of $1,428,000 and $706,000 at June 30, 2020 and December 31, 2019, respectively. While the Company is exposed to credit loss on its interest rate swaps in the event of non-performance by the counterparty to the swap, management believes that such non-performance is unlikely to occur given the financial resources of the counterparty.

12. INCOME TAXES

The Company’s Consolidated Balance Sheets include a net non-current deferred tax asset of $2,026,000 for the Canadian and Mexican tax jurisdictions and a net non-current deferred tax liability of $517,000 for the U.S. tax jurisdiction at June 30, 2020. The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. As of June 30, 2020 and December 31, 2019, the Company had no liability for unrecognized tax benefits. The Company does not anticipate that unrecognized tax benefits will significantly change within the next twelve months.

Income tax benefit for the six months ended June 30, 2020 is estimated to be $4,965,000, approximately 686% of the income before income taxes. Income tax benefit for the six months ended June 30, 2019 was estimated to be $830,000, or approximately 19% of loss before income taxes.

20

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions, including allowing net operating losses to be carried back five years versus an indefinite carryforward. The Company has filed with the Internal Revenue Service to carry back net operating losses incurred in 2018 and 2019 under this new law, resulting in an income tax refund of $6,155,000 of which $466,000 has been received in the second quarter of 2020 and the remaining is expected to be received by September 30th, 2020. An income tax benefit of $5,638,000 was realized in the first quarter of 2020. The income tax benefit consists of the reversal of the full valuation allowance against net deferred tax assets in the United States for approximately $3,267,000. It also consists of a rate benefit of $2,371,000 based on the losses being carried back to years where the Company paid tax at 34% compared to the valuation of the losses being recorded at the 21% current U.S. statutory tax rate.

The Company files income tax returns in the U.S., Mexico, Canada and various state jurisdictions. The Company is not subject to U.S. federal and state income tax examinations by tax authorities for years prior to 2016, not subject to Mexican income tax examinations by Mexican authorities for years prior to 2014 and not subject to Canadian tax examinations by Canadian authorities for years prior to 2018.

13. STOCK BASED COMPENSATION

The Company has a Long Term Equity Incentive Plan (the “2006 Plan”), as approved by the Company’s stockholders in May 2006 and as amended in May 2015. The 2006 Plan allows for grants to directors and employees of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance shares, performance units and other incentive awards (“Stock Awards”) up to an aggregate of 3,000,000 awards, each representing a right to buy a share of Core Molding Technologies common stock. Stock Awards can be granted under the 2006 Plan through the earlier of December 31, 2025, or the date the maximum number of available awards under the 2006 Plan have been granted.

Restricted Stock

The Company grants shares of its common stock to certain directors, officers, key managers and employees in the form of unvested stock and units (“Restricted Stock”). These awards are recorded at the market value of the Company's common stock on the date of issuance and amortized ratably as compensation expense over the applicable vesting period, which is typically three years. The Company adjusts compensation expense for actual forfeitures, as they occur.

The following summarizes the status of Restricted Stock and changes during the six months ended June 30, 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2019	343,919		$	9.37
Granted	287,750		4.62
Vested	(87,344	)	10.69
Forfeited	(8,385	)	13.72
Unvested balance at June 30, 2020	535,940		$	6.54

At June 30, 2020 and 2019, there was $2,249,000 and $2,736,000, respectively, of total unrecognized compensation expense, related to Restricted Stock granted under the 2006 Plan. That cost is expected to be recognized over the weighted-average period of 2.6 years. Total compensation cost related to restricted stock grants for the three months ended June 30, 2020 and 2019 was $357,000 and $413,000, respectively, all of which was recorded to selling, general and administrative expense. Total compensation cost related to restricted stock grants for the six months ended June 30, 2020 and 2019 was $649,000 and $763,000, respectively, all of which was recorded to selling, general and administrative expense

During the six months ended June 30, 2020 and 2019, employees surrendered no shares and 7,744 shares of the Company's common stock to satisfy income tax withholding obligations in connection with the vesting of restricted awards.

Stock Appreciation Rights

As part of the Company's 2019 annual grant, Stock Appreciation Rights ("SARs") were granted with a grant price of $10. These awards have a contractual term of five years and vest ratably over a period of three years or immediately vest if the recipient is over 65 years of age. These awards are valued using the Black-Scholes option pricing model.

21

A summary of the Company's stock appreciation rights activity for the quarter ended June 30, 2020 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019	222,112		$	2.57
Granted	—		—
Exercised	—		—
Forfeited	(27,266	)	2.57
Outstanding at the period ended June 30, 2020	194,846		$	2.57
Exercisable at the period ended June 30, 2020	84,300		$	2.57

The average remaining contractual term for those SARs outstanding at June 30, 2020 is 3.8 years, with no aggregate intrinsic value. At June 30, 2020 and 2019, there was $260,000 and $478,000, respectively, of total unrecognized compensation expense, net of estimated forfeitures, related to SARs. Total compensation cost related to SARs for the three months ended June 30, 2020 and 2019 was $31,000 and $103,000, respectively, all of which was recorded to selling, general and administrative expense. Total compensation cost related to SARs for the six months ended June 30, 2020 and 2019 was $55,000 and $103,000, respectively, all of which was recorded to selling, general and administrative expense. That cost is expected to be recognized over the weighted-average period of 1.8 years.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This guidance provides a fair value framework that requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment.

The three levels are defined as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities.

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

Level 3 - Significant unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, interest rate swaps and foreign currency derivatives. Cash and cash equivalents, accounts receivable and accounts payable carrying values as of June 30, 2020 and December 31, 2019 approximate fair value due to the short-term maturities of these financial instruments. The carrying amounts of long-term debt and the revolving line of credit approximate fair value as of June 30, 2020 and December 31, 2019 due to the short term nature of the underlying variable rate LIBOR agreements. The Company had Level 2 fair value measurements at June 30, 2020 and December 31, 2019 relating to the Company’s interest rate swaps and foreign currency derivatives.

Derivative and Hedging Activities

Foreign currency derivatives

The Company conducted business in foreign countries and paid certain expenses in foreign currencies; therefore, the Company was exposed to foreign currency exchange risk between the U.S. Dollar and foreign currencies, which could impact the Company’s operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company entered into forward contracts to exchange a fixed amount of U.S. Dollars for a fixed amount of foreign currency, which will be used to fund future foreign currency cash flows. At inception, all forward contracts are formally documented as cash flow hedges and are measured at fair value each reporting period.

Derivatives are formally assessed both at inception and at least quarterly thereafter, to ensure that derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item. If it is determined that a derivative ceases

22

to be a highly effective hedge, or if the anticipated transaction is no longer probable of occurring, hedge accounting is discontinued, and any future mark-to-market adjustments are recognized in earnings. The effective portion of gain or loss is reported in other comprehensive income and the ineffective portion is reported in earnings. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in the foreign currency. As of June 30, 2020, the Company had no ineffective portion related to the cash flow hedges.

Interest Rate Swaps

The Company entered into interest rate swap contracts to fix the interest rate on an initial aggregate amount of $35,000,000 thereby reducing exposure to interest rate changes. The Company pays a fixed rate of approximately 2.49% to the counterparty and receives 30 day LIBOR for both cash flow hedges. At inception, all interest rate swaps were formally documented as cash flow hedges and are measured at fair value each reporting period. See Note 11, "Debt", for additional information.

Financial Statement Impacts

The following tables detail amounts related to our derivatives designated as hedging instruments:

	Fair Value of Derivative Instruments
	June 30, 2020
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	—	Accrued other liabilities	$	419,000
Notional contract values		$	—		$	3,958,000
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	1,428,000
Notional swap values		$	—		$	28,000,000
	December 31, 2019
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	452,000	Accrued other liabilities	$	—
Notional contract values		$	15,358,000		$	—
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	706,000
Notional swap values		$	—		$	29,750,000

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the three months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020		2019				2020			2019
Foreign exchange contracts	$	1,213,000	$	354,000		Cost of goods sold	$	(364,000	)	$	(79,000	)
						Selling, general and administrative expense	$	(47,000	)	$	(4,000	)
Interest rate swaps	$	205,000	$	(470,000	)	Interest expense	$	(144,000	)	$	(1,000	)

^(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income (Loss) is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

23

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the six months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative						Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020			2019				2020			2019
Foreign exchange contracts	$	(532,000	)	$	841,000		Cost of goods sold	$	(306,000	)	$	(55,000	)
							Selling, general and administrative expense	$	(34,000	)	$	8,000
Interest rate swaps	$	(528,000	)	$	(722,000	)	Interest expense	$	(194,000	)	$	—

^(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income (Loss) is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents changes in Accumulated Other Comprehensive Income (Loss), net of tax, for the six months ended June 30, 2020 and 2019:

2019:	Hedging Derivative Activities			Post Retirement Benefit Plan Items(A)			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2018	$	(612,000	)	$	2,729,000		$	2,117,000
Other comprehensive income (loss) before reclassifications	119,000			—			119,000
Amounts reclassified from accumulated other comprehensive income (loss)	(47,000		)	(190,000		)	(237,000		)
Income tax benefit (expense)	(38,000		)	40,000			2,000
Balance at June 30, 2019	$	(578,000	)	$	2,579,000		$	2,001,000
2020:
Balance at December 31, 2019	$	(191,000	)	$	1,561,000		$	1,370,000
Other comprehensive income (loss) before reclassifications	(1,060,000		)	—			(1,060,000		)
Amounts reclassified from accumulated other comprehensive income (loss)	(533,000		)	(158,000		)	(691,000		)
Income tax benefit	350,000			33,000			383,000
Balance at June 30, 2020	$	(1,434,000	)	$	1,436,000		$	2,000

^(A) The effect of post-retirement benefit items reclassified from Accumulated Other Comprehensive Income (Loss) is included in other income and expense on the Consolidated Statements of Income (Loss). These Accumulated Other Comprehensive Income (Loss) components are included in the computation of net periodic benefit cost (see Note 10, "Post Retirement Benefits" for additional details). The tax effect of post-retirement benefit items reclassified from Accumulated Other Comprehensive Income (Loss) is included in income tax expense on the Consolidated Statements of Income (Loss).

24

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.  Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expect,” “intend,” “plans,” “projects,” “believes,” “estimates,” “encouraged,” “confident” and similar expressions are used to identify these forward-looking statements. 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 report: business conditions in the plastics, transportation, marine and commercial product industries (including changes in demand for truck production); federal and state regulations (including engine emission regulations); general economic, social, regulatory (including foreign trade policy) and political environments in the countries in which Core Molding Technologies operates; the adverse impact of coronavirus (COVID-19) global pandemic on our business, results of operations, financial position, liquidity or cash flow, as well as impact on customers and supply chains; safety and security conditions in Mexico and Canada; dependence upon certain major customers as the primary source of Core Molding Technologies’ sales revenues; efforts of Core Molding Technologies to expand its customer base; the ability to develop new and innovative products and to diversify markets, materials and processes and increase operational enhancements; the actions of competitors, customers, and suppliers; failure of Core Molding Technologies’ suppliers to perform their obligations; the availability of raw materials; inflationary pressures; new technologies; regulatory matters; labor relations; labor availability; the loss or inability of Core Molding Technologies to attract and retain key personnel; the Company's ability to successfully identify, evaluate and manage potential acquisitions and to benefit from and properly integrate any completed acquisitions; federal, state and local environmental laws and regulations; 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 and other customer charges; risk of cancellation or rescheduling of orders; management’s decision to pursue new products or businesses which involve additional costs, risks or capital expenditures; inadequate insurance coverage to protect against potential hazards; equipment and machinery failure; product liability and warranty claims; and other risks identified from time to time in Core Molding Technologies’ other public documents on file with the Securities and Exchange Commission, including those described in Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2019.

25

Description of the Company

Core Molding Technologies and its subsidiaries operate in the composites market as one operating segment as a molder of thermoplastic and thermoset structural products. The Company's operating segment consists of two component reporting units, Core Traditional and Horizon Plastics. The Company offers customers a wide range of manufacturing processes to fit various program volume and investment requirements. These processes include compression molding of sheet molding compound ("SMC"), bulk molding compounds ("BMC"), resin transfer molding ("RTM"), liquid molding of dicyclopentadiene ("DCPD"), spray-up and hand-lay-up, glass mat thermoplastics ("GMT"), direct long-fiber thermoplastics ("D-LFT") and structural foam and structural web injection molding ("SIM"). Core Molding Technologies serves a wide variety of markets, including the medium and heavy-duty truck, marine, automotive, agriculture, construction, and other commercial products. The demand for Core Molding Technologies’ products is affected by economic conditions in the United States, Mexico, and Canada. Core Molding Technologies’ manufacturing operations have a significant fixed cost component. Accordingly, during periods of changing demand, the profitability of Core Molding Technologies’ operations may change proportionately more than revenues from operations.

In 1996, Core Molding Technologies acquired substantially all of the assets and assumed certain liabilities of Columbus Plastics, a wholly owned operating unit of Navistar’s 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 operations at its second facility in Gaffney, South Carolina, and in 2001, Core Molding Technologies added a production facility in Matamoros, Mexico by acquiring certain assets of Airshield Corporation. As a result of this acquisition, Core Molding Technologies expanded its fiberglass molding capabilities to include the spray up, hand-lay-up open mold processes and RTM closed molding. In 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. In 2009, the Company completed construction of a new production facility in Matamoros, Mexico that replaced its leased facility. In March 2015, the Company acquired substantially all of the assets of CPI Binani, Inc., a wholly owned subsidiary of Binani Industries Limited, located in Winona, Minnesota ("CPI"), which expanded the Company's process capabilities to include D-LFT and diversified the customer base. In January 2018, the Company acquired substantially all the assets of Horizon Plastics, which has manufacturing operations in Cobourg, Ontario and Escobedo, Mexico. This acquisition expanded the Company's customer base, geographic footprint, and process capabilities to include structural foam and structural web molding.

Business Overview

General

The Company’s business and operating results are directly affected by changes in overall customer demand, operational costs and performance and leverage of our fixed cost and selling, general and administrative ("SG&A") infrastructure. 

Product sales fluctuate in response to several factors including many that are beyond the Company’s control, such as general economic conditions, interest rates, government regulations, consumer spending, labor availability, and our customers’ production rates and inventory levels. Product sales consist of demand from customers in many different markets with different levels of cyclicality and seasonality. Product sales from the Company's largest market, the North American truck market, which is highly cyclical, accounted for 42% and 60% of the Company’s product revenue for the six months ended June 30, 2020 and 2019, respectively. 

Operating performance is dependent on the Company’s ability to manage changes in input costs for items such as raw materials, labor, and overhead operating costs. Performance is also affected by manufacturing efficiencies, including items such as on time delivery, quality, scrap, and productivity. Market factors of supply and demand can impact operating costs. In periods of rapid increases or decreases in customer demand, the Company is required to ramp operations activity up or down quickly which may impact manufacturing efficiencies more than in periods of steady demand. 

Operating performance is also dependent on the Company’s ability to effectively launch new customer programs, which are typically extremely complex in nature. The start of production of a new program is the result of a process of developing new molds and assembly equipment, validation testing, manufacturing process design, development and testing, along with training and often hiring employees. Meeting the targeted levels of manufacturing efficiency for new programs usually occurs over time as the Company gains experience with new tools and processes. Therefore, during a new program launch period, start-up costs and inefficiencies can affect operating results. 

26

Six Months Ended June 30, 2020

Product sales for the six months ended June 30, 2020 decreased 33% compared to the same period in 2019. Operating income increased from a loss of $2,749,000 for the six months ended June 30, 2019 to profit of $3,055,000 for the six months ended June 30, 2020. Lower demand from our customers as a result of a cyclical downturn in the truck market and the negative effect of COVID-19 on most customer demand was the primary driver of the sales decrease. The increase in operating income was largely due to improved manufacturing efficiencies and cost savings at several of the Company's facilities and lower operating and SG&A costs.

For the six months ended June 30, 2020, product sales to truck customers decreased by 53% compared to the same period in 2019, as a result of a cyclical downturn in the truck market and demand deterioration related to COVID-19. According to ACT Research, North American heavy-duty truck production decreased approximately 52% for the six months ended June 30, 2020 compared to the same period in 2019.

For the six months ended June 30, 2020, the Company recorded net income of $5,689,000, or $0.67 per basic and diluted share, compared with net loss of $3,636,000, or $(0.47) per basic and diluted share for the six months ended June 30, 2019. Net income in 2020 was favorably impacted by $5,638,000, or $0.69 per share, as a result of a tax valuation allowance reversal and a tax rate benefit due to tax law changes that allow the Company to carryback net operating losses to offset taxable income in 2013 through 2015.

Looking forward, the Company anticipates product sales demand to rebound from the second quarter 2020 levels which were negatively impacted by customer shutdowns as a result of COVID-19. Although the Company anticipates product sales demand to rebound, the Company expects an uncertain demand environment associated with COVID-19 and the concurrent unfolding market dynamics. Future developments such as a rebound in the spread of COVID-19, further actions taken by governmental authorities, including potential shutdowns of our operations, or changes in economic conditions could further adversely affect our operations and financial results, as well as those of our customers and suppliers.

Results of Operations

Three Months Ended June 30, 2020, as Compared to the Three Months Ended June 30, 2019

Net sales for the three months ended June 30, 2020 and 2019 totaled $37,806,000 and $81,247,000, respectively. Included in total sales were tooling project sales of $1,959,000 and $5,807,000 for the three months ended June 30, 2020 and 2019, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis. Product sales, excluding tooling project sales, for the three months ended June 30, 2020 were approximately $35,847,000 compared to $75,440,000 for the same period in 2019. This decrease in sales is primarily the result of lower cyclical demand from truck customers as well as lower demand from most all customers as a result of COVID-19. As a result of COVID-19, several of the Company’s major customers suspended operations during April and May due to reduced demand and the impact of government regulations and mandates. 

Gross margin was approximately 8% of sales for the three months ended June 30, 2020, compared with 10% for the three months ended June 30, 2019. The gross margin percentage decrease was due to lower leverage of fixed costs of 7%, offset by a favorable net change in product mix and manufacturing efficiency of 3% and a favorable net change in selling price and material costs of 2%.

Selling, general and administrative expense (“SG&A”) was $4,109,000 for the three months ended June 30, 2020, compared to $7,224,000 for the three months ended June 30, 2019. The decrease in SG&A expense primarily resulted from Canadian government subsidies enacted as the result of COVID-19 totaling $1,391,000 for the three months ended June 30, 2020, lower labor and benefit costs of $818,000, lower travel costs of $321,000 and lower outside and professional services of $171,000.

Interest expense totaled $1,197,000 for the three months ended June 30, 2020, compared to interest expense of $869,000 for the three months ended June 30, 2019. The increase in interest expense was due to a forbearance amendment fee of $225,000 and higher interest rates during the three months ended June 30, 2020, when compared to the same period in 2019.

Income tax benefit for the three months ended June 30, 2020 was 5% of loss before income taxes, and income tax for the three months ended June 30, 2019 was 50% of income before income taxes. The Company’s effective tax rates reflect the effects of taxable income being generated in higher tax rate jurisdictions while taxable losses are being generated in lower tax rate jurisdictions.

27

The Company recorded a net loss for the three months ended June 30, 2020 of $2,272,000, or $(0.29) per basic and diluted share, compared with net income of $209,000, or $0.03 per basic and diluted share, for the three months ended June 30, 2019.

Comprehensive loss totaled $1,659,000 for the three months ended June 30, 2020, compared to comprehensive loss of $25,000 for the same period ended June 30, 2019. The decrease was primarily related to lower net income of $2,481,000 offset by a net change in foreign currency hedges of $427,000 and a net change in interest rate swaps of $409,000.

Six Months Ended June 30, 2020, as Compared to the Six Months Ended June 30, 2019

Net sales for the six months ended June 30, 2020 and 2019 totaled $101,830,000 and $153,513,000, respectively. Included in total sales were tooling project sales of $4,053,000 and $6,621,000 for the six months ended June 30, 2020 and 2019, respectively. These sales are sporadic in nature and fluctuate in regard to scope and related revenue on a period-to-period basis. Product sales, excluding tooling project sales, for the six months ended June 30, 2020 were approximately $97,777,000 compared to $146,892,000 for the same period in 2019. This decrease in sales is primarily the result of lower cyclical demand from truck customers as well as lower demand from most all customers as a result of COVID-19. As a result of COVID-19, several of the Company’s major customers suspended operations during April and May due to reduced demand and the impact of government regulations and mandates. 

Gross margin was approximately 13% of sales for the six months ended June 30, 2020, compared with 8% for the six months ended June 30, 2019. The gross margin percentage increase was due to a favorable net change in product mix and manufacturing efficiency of 8% and a favorable net change in selling price and material costs of 2%, offset by lower leverage of fixed costs of 3%.

SG&A was $10,614,000 for the six months ended June 30, 2020, compared to $14,390,000 for the six months ended June 30, 2019. The decrease in SG&A expense primarily resulted from government subsidies enacted as a result of COVID-19 totaling $1,391,000 for the six months ended June 30, 2020, lower outside and professional services of $1,147,000, lower travel costs of $463,000 and lower labor and benefit costs of $277,000.

Interest expense totaled $2,371,000 for the six months ended June 30, 2020, compared to interest expense of $1,765,000 for the six months ended June 30, 2019. The increase in interest expense was due to forbearance amendment fees of $450,000 and higher interest rates during the six months ended June 30, 2020, when compared to the same period in 2019.

Income tax benefit for the six months ended June 30, 2020 was 685% of the income before income taxes, and income tax benefit for the six months ended June 30, 2019 was 19% of the loss before income taxes. The effective rate in 2020 includes the impact of reversing the full valuation allowance against net deferred tax assets in the United States of approximately $3,267,000 and a rate benefit of $2,371,000 based on the losses being carried back to years where the Company paid tax at 34% compared to the valuation of the losses being recorded at the 21% current U.S. statutory tax rate.

The Company recorded net income for the six months ended June 30, 2020 of $5,689,000, or $0.67 per basic and diluted share, compared with a net loss of $3,636,000, or $(0.47) per basic and diluted share, for the six months ended June 30, 2019.

Comprehensive income totaled $4,321,000 for the six months ended June 30, 2020, compared to comprehensive loss of $3,752,000 for the same period ended June 30, 2019. The increase was primarily related to higher net income of $9,325,000, offset by a net change in foreign currency hedges of $1,277,000.

Liquidity and Capital Resources

Historically, the Company’s primary sources of funds have been cash generated from operating activities and borrowings from third parties. Primary cash requirements are for operating expenses, increases in working capital, capital expenditures, repayment of long-term debt and business acquisitions. The Company from time to time will enter into foreign exchange contracts and interest rate swaps to mitigate risk of foreign exchange and interest rate volatility. As of June 30, 2020, the Company had outstanding foreign exchange contracts with notional amounts totaling $3,958,000, compared to $15,358,000 outstanding as of December 31, 2019. As of June 30, 2020, the Company also had outstanding interest rate swaps with notional amounts totaling $28,000,000, compared to $29,750,000 outstanding as of December 31, 2019.

Cash provided by operating activities for the six months ended June 30, 2020 totaled $18,483,000. Net income of $5,689,000 positively impacted operating cash flows. Non-cash deductions of depreciation and amortization included in net income amounted to $5,588,000. Changes in working capital increased cash provided by operating activities by $6,030,000, which primarily related to changes in accounts receivable and inventory, offset by accounts payable and other prepaid assets.

28

At June 30, 2020, the Company had $4,604,000 cash on hand, and an available balance on the revolving line of credit of $20,000,000.If a material adverse change in the financial position of the Company should occur, or if actual sales or expenses are substantially different than what has been forecasted, the Company's liquidity and ability to obtain further financing to fund future operating and capital requirements could be negatively impacted.

Cash used in investing activities for the six months ended June 30, 2020 was $1,644,000, which primarily related to purchases of property, plant and equipment. The Company anticipates spending up to $3,500,000 during the remainder of 2020 on property, plant and equipment purchases for all of the Company's operations.

At June 30, 2020, purchase commitments for capital expenditures in progress were $917,000. The Company anticipates using cash from operations and its available revolving line of credit to fund capital investments.

Cash used in financing activities for the six months ended June 30, 2020 totaled $14,091,000, which primarily consisted of net revolving loan payments of $12,008,000 and net scheduled repayments of principal on outstanding term loans of $2,258,000. The Company was able to make the repayments primarily due to the cash provided by operating activities of the $13,104,000 for the three months ended of June 30, 2020.

The Company is required to meet certain financial covenants included in the Amended Credit Agreement with respect to leverage ratios and fixed charge ratios and capital expenditures, as well as other customary affirmative and negative covenants. As of June 30, 2020, the Company was not in compliance with its financial covenants. The following table presents the financial covenants specified in our Amended A/R Credit Agreement and the actual covenant calculations as of June 30, 2020:

	Financial Covenants	Actual Covenants as of June 30, 2020
Fixed Charge Coverage Ratio	Minimum 1.15	0.75
Leverage Ratio	3.25 or Lower	3.52

On January 16, 2018, the Company entered into an Amended and Restated Credit Agreement (the "A/R Credit Agreement") with KeyBank National Association as administrative agent and various financial institutions party thereto as lenders (the "Lenders"). Pursuant to the terms of the A/R Credit Agreement (i) the Company may borrow revolving loans in the aggregate principal amount of up to $40,000,000 (the “U.S. Revolving Loans”) from the Lenders and term loans in the aggregate principal amount of up to $32,000,000 from the Lenders, (ii) the Company's wholly-owned subsidiary, Horizon Plastics International, Inc., (the "Subsidiary") may borrow revolving loans in an aggregate principal amount of up to $10,000,000 from the Lenders (which revolving loans shall reduce the availability of the U.S. Revolving Loans to the Company on a dollar-for-dollar basis) and term loans in an aggregate principal amount of up to $13,000,000 from the Lenders, (iii) the Company obtained a Letter of Credit Commitment of $250,000, of which $160,000 has been issued and (iv) the Company repaid the outstanding term loan balance of $6,750,000. The Credit Agreement is secured by a guarantee of each U.S. and Canadian subsidiary of the Company, and by a lien on substantially all of the present and future assets of the Company and its U.S. and Canadian subsidiaries, except that only 65% of the stock issued by Corecomposites de Mexico, S. de R.L. de C.V. has been pledged.

Concurrent with the closing of the A/R Credit Agreement the Company borrowed the $32,000,000 term loan and $2,000,000 from the U.S. Revolving Loan and the Subsidiary borrowed the $13,000,000 term loan and $2,500,000 from revolving loans to provide $49,500,000 of funding for the acquisition of Horizon Plastics. Interest is payable monthly at one month LIBOR plus a basis point margin of 700 basis points with a LIBOR floor of 100 basis points.

On March 14, 2019, the Company entered into the first amendment (“First Amendment”) to the A/R Credit Agreement (as amended by the First Amendment, the "Amended Credit Agreement") with the Lenders. Pursuant to the terms of the First Amendment, the Company and Lenders agreed to modify certain terms of the A/R Credit Agreement. These modifications included (1) implementation of an availability block on the U.S. Revolving Loans reducing availability from $40,000,000 to $32,500,000, (2) modification to the definition of EBITDA to add back certain one-time expenses, (3) waiver of non-compliance with the leverage covenant as of December 31, 2018 and modification of the leverage ratio definition and covenant to eliminate testing of the leverage ratio until December 31, 2019, (4) waiver of non-compliance with the fixed charge covenant as of December 31, 2018 and modification of the fixed charge coverage ratio definition and covenant requirement, (5) implementation of a capital expenditure spend limit of $7,500,000 during the first six months of 2019 and $12,500,000 for the full year 2019, (6) an increase of the applicable interest margin spread for existing term and revolving loans, and (7) an increase in the commitment fees on any unused U.S. Revolving Loans.

29

On November 22, 2019, the Company entered into a forbearance agreement (the "Forbearance Agreement") with the Lenders. Pursuant to the Forbearance Agreement, the Borrowers and the Lenders acknowledged and confirmed that an event of default occurred under the A/R Credit Agreement resulting from the Borrowers failure to maintain the required Fixed Charge Coverage Ratio (as defined in the A/R Credit Agreement) for the fiscal quarter ended September 30, 2019. The Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the Loan Documents described in the A/R Credit Agreement through March 13, 2020, as long as the Company satisfies the conditions set forth in the Forbearance Agreement, including, (i) the Borrowers shall remain current on all loan payments during the forbearance period, (ii) on or before December 6, 2019, the Administrative Agent and Lenders shall each receive a copy of a report of Huron Consulting Group containing findings and observations in respect of the businesses and operations of the Company and the Borrowers shall deliver a strategic alternative assessment in respect of the Borrowers’ operations and financing, (iii) on or before December 15, 2019, the Administrative Agent and Lenders shall each receive a copy of appraisals of machinery and equipment and inventory appraisals, and the Borrowers shall have determined and proposed a new capital structure to the Administrative Agent and Lenders, (iv) on or before February 14, 2020, the Borrowers shall have obtained a definitive, written commitment from involved parties and/or lenders providing the basis for implementation of a new capital structure, and (v) on or before March 13, 2020, the Borrowers shall have closed on a new capital structure, acceptable to the Administrative Agents and Lenders. The Forbearance Agreement also implemented a new availability block with respect to the U.S. Revolving Loans portion of the A/R Credit Agreement, reducing availability from $32,500,000 to $28,000,000 and increasing the applicable margin for existing term and revolving loans, as well as increasing the commitment fees on any unused U.S. Revolving Loans.

On March 13, 2020, the Company amended the Forbearance Agreement and entered into the First Amendment to the Forbearance Agreement (the “First Amended Forbearance Agreement”) with the Lenders. Pursuant to the terms of the First Amended Forbearance Agreement, the Company and Lenders agreed to modify certain terms of the Forbearance Agreement and extend the Forbearance Agreement through May 29, 2020. The modifications include (1) a reduction in the U.S. Revolving Loan to $25,000,000 with an availability block of $5,000,000 which can be borrowed with the approval of the lenders, (2) a change of interest rate to LIBOR plus 650 basis points, (3) forbearing compliance with the leverage covenant and fixed charge covenant through May 29, 2020, and (4) implementation of a capital expenditure spend limit of $3,500,000 from the effective date of the First Amended Forbearance Agreement through May 29, 2020.

On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The parties agreed to a fixed interest rate of 550 basis point and a term of 60 months. The amount outstanding at June 30, 2020 was $167,000 of which, $135,000 was classified as long term debt.

On May 29, 2020, the Company amended the First Amended Forbearance Agreement and entered into the Second Amendment to the Forbearance Agreement (the “Second Amended Forbearance Agreement”) with the Lenders. The Second Amended Forbearance Agreement provided that the Company and the Lenders agreed to modify certain terms of the Amended Forbearance Agreement and extend the Forbearance Agreement through September 30, 2020. The modifications include (1) that the Company will maintain liquidity of not less than $5,000,000, to be measured twice monthly after the effective date, on every second and fourth Friday of each month during the forbearance period, (2) the Company shall maintain minimum year-to-date earnings before income tax, depreciation and amortization (“YTD-EBITDA”) of not less than $5,000,000, measured upon delivery of Company’s July 2020 financial statements and also upon delivery of Company’s August 2020 financial statements, with YTD-EBITDA determined based on consolidated EBITDA, (3) a change of interest rate to LIBOR rate plus 700 basis points with a LIBOR floor of 100 basis points, (4) on or before July 15, 2020 the Borrowers shall have obtained executed term sheets from involved parties and/or lenders, (5) on or before September 30, 2020, the Borrowers shall have closed on a new capital structure, (6) forbearing compliance with the leverage covenant and fixed charge covenant through September 30, 2020, and (7) implementation of a capital expenditure spend limit of $3,000,000 for the nine months ended September 30, 2020. Capitalized terms used in this paragraph but not defined shall have the meaning ascribed to such terms in the Seconded Amended Forbearance Agreement.

As a result of non-compliance with the A/R Credit Agreement, the Company’s remaining borrowings under the A/R Credit Agreement, consisting of $36,000,000 under the revolving credit commitment and the term loan commitments, were classified as a current liability in the Company’s consolidated balance sheet as of June 30, 2020. As a result, the Company’s current liabilities exceeded its current assets by $12,345,000 as of June 30, 2020. If the Lenders were to call the loans or demand repayment of all existing borrowings, this could result in the Company being unable to meet its working capital obligations.

The Company has unblocked maximum availability of $20,000,000 of variable rate revolving loans of which $0 is outstanding as of June 30, 2020.

30

Off-Balance Sheet Arrangements

The Company did not have any significant off-balance sheet arrangements as of June 30, 2020 or December 31, 2019.

The Company did not have or experience any material changes outside the ordinary course of business as to contractual obligations, including long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities reflected on the Company’s balance sheet under GAAP, as of June 30, 2020 or December 31, 2019.

Critical Accounting Policies and Estimates

For information on critical accounting policies and estimates, see Note 2, "Critical Accounting Policies and Estimates," to the consolidated financial statements included herein.

Recent Accounting Pronouncements

For information on the impact of recently issued accounting pronouncements, see Note 3, "Recent Accounting Pronouncements," to the consolidated financial statements included herein.

31

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 and Canadian Dollar. Core Molding Technologies does not hold any material market risk sensitive instruments for trading purposes. The Company may use derivative financial instruments to hedge exposure to fluctuations in foreign exchange rates and interest rates.

Core Molding Technologies has the following three items that are sensitive to market risks: (1) Revolving Loans and Term Loans under the Amended A/R Credit Agreement, some of which bear a variable interest rate; (2) foreign currency purchases in which the Company purchases Mexican Pesos and Canadian Dollars with United States Dollars to meet certain obligations; and (3) raw material purchases in which Core Molding Technologies purchases various resins and fiberglass for use in production. The prices and availability of these materials are affected by the prices of crude oil, natural gas and other feedstocks as well as processing capacity versus demand.

Assuming a hypothetical 10% change in short-term interest rates, interest paid on the term loan would have been impacted, as the interest rate on these loans is based upon LIBOR. It would not, however, have a material effect on earnings before tax.

Assuming a hypothetical 10% decrease in the United States Dollar to Mexican Peso and Canadian Dollar exchange rate, the Company would be impacted by an increase in operating costs, which would have an adverse effect on operating margins.

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 effect on operating margins.

32

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 was 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 disclosure, 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 Commission’s rules and forms.

33

Part II — Other Information

Item 1. Legal Proceedings

From time to time, the Company is involved in litigation incidental to the conduct of its business. The Company is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company's consolidated financial position or results of operations.

Item 1A. Risk Factors

The following risk factor supplements the “Risk Factors” section in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (our “Form 10-K"). The following risk factor disclosure should be read in conjunction with the other risk factors set out in our Form 10-K.

The Recent Coronavirus (COVID-19) Outbreak Has Adversely Impacted our Business and Could in the Future Have a Material Adverse Impact on our Business, Results of Operation, Financial Condition and Liquidity, the Nature and Extent of Which is Highly Uncertain

The global outbreak of the coronavirus (COVID-19) has significantly increased economic, demand and operational uncertainty. We have global operations, customers and suppliers, including in countries most impacted by COVID-19. Authorities around the world have taken a variety of measures to slow the spread of COVID-19, including travel bans or restrictions, increased border controls or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose additional restrictions. We have also taken actions to protect our employees and to mitigate the spread of COVID-19, including embracing guidelines set by the World Health Organization and the Centers for Disease Control and Prevention on social distancing, good hygiene, restrictions on employee travel and in-person meetings, and changes to employee work arrangements including remote work arrangements where feasible. The actions taken around the world to slow the spread of COVID-19 have also impacted our customers and suppliers, and future developments could cause further disruptions to the Company due to the interconnected nature of our business relationships.

The impact of COVID-19 on the global economy and our customers has negatively impacted demand for our products and could continue to do so in the future. Its effects could also result in further disruptions to our manufacturing operations, including higher rates of employee absenteeism, and supply chain disruption, which could continue to negatively impact our ability to meet customer demand. Additionally, the potential deterioration and volatility of credit and financial markets could limit our ability to obtain external financing. The extent to which COVID-19 will impact our business, results of operations, financial condition or liquidity is highly uncertain and will depend on future developments, including the spread and duration of the virus, potential actions taken by governmental authorities, and how quickly economic conditions stabilize and recover.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6.     Exhibits

See Index to Exhibits.

34

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:	August 10, 2020	By:	/s/ David L. Duvall
			David L. Duvall
			President, Chief Executive Officer, and Director
Date:	August 10, 2020	By:	/s/ John P. Zimmer
			John P. Zimmer
			Vice President, Secretary, Treasurer and Chief Financial Officer

35

INDEX TO EXHIBIT

Exhibit No.	Description	Location
2(a)(1)	Asset Purchase Agreement dated as of September 12, 1996, as amended October 31, 1996, between Navistar and RYMAC Mortgage Investment Corporation1	Incorporated by reference to Exhibit 2-A to Registration Statement on Form S-4 (Registration No. 333-15809)
2(a)(2)	Second Amendment to Asset Purchase Agreement dated December 16, 19961	Incorporated by reference to 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 November 1, 1996, between Core Molding Technologies, Inc. and RYMAC Mortgage Investment Corporation	Incorporated by reference to Exhibit 2-B to Registration Statement on Form S-4 (Registration No. 333-15809)
2(b)(2)	First Amendment to Agreement and Plan of Merger dated as of December 27, 1996 between Core Molding Technologies, Inc. and RYMAC Mortgage Investment Corporation	Incorporated by reference to Exhibit 2(b)(2) to Annual Report on Form 10-K for the year ended December 31, 2002
2(c)	Asset Purchase Agreement dated as of October 10, 2001, between Core Molding Technologies, Inc. and Airshield Corporation	Incorporated by reference to Exhibit 1 to Current Report on Form 8-K filed October 31, 2001
2(d)	Asset Purchase Agreement dated as of March 20, 2015, between Core Molding Technologies, Inc and CPI Binani, Inc.	Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed March 23, 2015
2(e)	Asset Purchase Agreement dated as of January 16, 2018 between 1137952 B.C. Ltd., Horizon Plastics International, Inc., 1541689 Ontario Inc., 2551024 Ontario Inc., Horizon Plastics de Mexico, S.A. de C.V., and Brian Read	Incorporate by reference to Exhibit 2.1 to Current Report on Form 8-K filed January 19, 2018
3(a)(1)	Certificate of Incorporation of Core Molding Technologies, Inc. as filed with the Secretary of State of Delaware on October 8, 1996	Incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-8 (Registration No. 333-29203)
3(a)(2)	Certificate of Amendment of Certificate of Incorporation of Core Molding Technologies, Inc. as filed with the Secretary of State of Delaware on November 6, 1996	Incorporated by reference to Exhibit 4(b) to Registration Statement on Form S-8 (Registration No. 333-29203)
3(a)(3)	Certificate of Amendment of Certificate of Incorporation as filed with the Secretary of State of Delaware on August 28, 2002	Incorporated by reference to Exhibit 3(a)(4) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2002
3(a)(4)	Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock as filed with the Secretary of State of Delaware on July 18, 2007	Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed July 19, 2007
3(a)(5)	Certificate of Elimination of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of the State of Delaware on April 2, 2015.	Incorporated by reference to Exhibit 3(a)(5) to Current Report on Form 8-K filed April 2, 2015
3(b)	Amended and Restated By-Laws of Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed January 4, 2008
3(b)(1)	Amendment No. 1 to the Amended and Restated By-Laws of Core Molding Technologies, Inc.	Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed December 17, 2013
4(a)(1)	Certificate of Incorporation of Core Molding Technologies, Inc. as filed with the Secretary of State of Delaware on October 8, 1996	Incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-8 (Registration No. 333-29203)

36

Exhibit No.	Description	Location
4(a)(2)	Certificate of Amendment of Certificate of Incorporation of Core Molding Technologies, Inc. as filed with the Secretary of State of Delaware on November 6, 1996	Incorporated by reference to Exhibit 4(b) to Registration Statement on Form S-8 (Registration No. 333-29203)
4(a)(3)	Certificate of Amendment of Certificate of Incorporation as filed with the Secretary of State of Delaware on August 28, 2002	Incorporated by reference to Exhibit 3(a)(4) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2002
4(a)(4)	Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock as filed with the Secretary of State of Delaware on July 18, 2007	Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed July 19, 2007
4(a)(5)	Certificate of Elimination of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of the State of Delaware on April 2, 2015	Incorporated by reference to Exhibit 3(a)(5) to Current Report on Form 8-K filed April 2, 2015
4(a)(6)	Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred Stock , as filed with the Secretary of State of the State of Delaware on April 21, 2020	Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed April 22, 2020
4(a)(7)	Rights Agreement, dated as of April 21, 2020, by and between Core Molding Technologies, Inc. and American Stock Transfer & Trust Company, as Rights Agent	Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed April 22, 2020
10	Second Amendment to Forbearance Agreement, dated as of May 29, 2020, among among Core Molding Technologies, Inc., Horizon Plastics International, Inc., the Lenders Named Therein, KeyBank National Association and Core Composites Corporation	Incorporated by reference to Exhibit 1099.1 to Current Report on Form 8-K filed June 2, 2020.
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 David L. Duvall, President, Chief Executive Officer, and Director	Filed Herein
31(b)	Section 302 Certification by John P. Zimmer, Vice President, Secretary, Treasurer, and Chief Financial Officer	Filed Herein
32(a)	Certification of David L. Duvall, Chief Executive Officer of Core Molding Technologies, Inc., dated August 10 2020, pursuant to 18 U.S.C. Section 1350	Filed Herein
32(b)	Certification of John P. Zimmer, Chief Financial Officer of Core Molding Technologies, Inc., dated August 10 2020, pursuant to 18 U.S.C. Section 1350	Filed Herein
101.INS	XBRL Instance Document	Filed Herein
101.SCH	XBRL Taxonomy Extension Schema Document	Filed Herein
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed Herein
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed Herein
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed Herein
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed Herein

1. The Asset Purchase Agreement, as filed with the Securities and Exchange Commission as 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

37

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.

38

EX-31.A

Exhibit 31(a)

SECTION 302 CERTIFICATION

I, David L. Duvall, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we 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 annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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 (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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: August 10, 2020

/s/ David L. Duvall

David L. Duvall

President, Chief Executive Officer, and Director

EX-31.B

Exhibit 31(b)

SECTION 302 CERTIFICATION

I, John P. Zimmer, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we 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 annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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 (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

1. 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: August 10, 2020

/s/ John P. Zimmer

John P. Zimmer

Vice President, Secretary, Treasurer and Chief Financial Officer

EX-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 ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. Duvall, 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/ David L. Duvall

David L. Duvall

President, Chief Executive Officer, and Director

August 10, 2020

EX-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 ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Zimmer, Vice President, Secretary, 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/ John P. Zimmer

John P. Zimmer

Vice President, Secretary, Treasurer and Chief Financial Officer

August 10, 2020

XML

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2020	Aug. 07, 2020
Entity Information [Line Items]
Entity Interactive Data Current	Yes
Entity Registrant Name	CORE MOLDING TECHNOLOGIES INC.
Entity Central Index Key	0001026655
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,501,229

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Loans Payable	$ 36,000,000	$ 38,250,000
Current assets:
Cash and cash equivalents	4,604,000	1,856,000
Accounts receivable, net	21,582,000	32,424,000
Inventory, Net	16,225,000	21,682,000
Income Taxes Receivable	6,870,000	652,000
Prepaid expenses and other current assets	2,248,000	4,611,000
Total current assets	51,529,000	61,225,000
Operating Lease, Right-of-Use Asset	3,832,000	4,484,000
Property, Plant and Equipment, Net	76,528,000	79,206,000
Goodwill	17,376,000	17,376,000
Intangible Assets, Net (Excluding Goodwill)	12,490,000	13,464,000
Other Assets, Noncurrent	3,363,000	3,551,000
Total Assets	165,118,000	179,306,000
Current liabilities:
Revolving line of credit	0	12,008,000
Current portion of long-term debt	35,360,000	49,451,000
Accounts payable	11,955,000	19,910,000
Contract with Customer, Liability, Current	3,078,000	3,698,000
Accrued liabilities:
Compensation and related benefits	6,508,000	5,515,000
Other	6,973,000	5,260,000
Total current liabilities	63,874,000	83,834,000
Long-term Debt, Excluding Current Maturities	135,000	0
Other Liabilities, Noncurrent	3,703,000	3,119,000
Post retirement benefits liability	7,954,000	7,927,000
Total Liabilities	75,666,000	94,880,000
Stockholders' Equity:
Preferred stock — $0.01 par value, authorized shares — 10,000,000; no shares outstanding at June 30, 2020 and December 31, 2019	0	0
Common stock — $0.01 par value, authorized shares – 20,000,000; outstanding shares: 7,965,289 at June 30, 2020 and 7,877,945 December 31, 2019	80,000	79,000
Paid-in capital	35,476,000	34,772,000
Accumulated other comprehensive income, net of income taxes	2,000	1,370,000
Treasury stock	(28,501,000)	(28,501,000)
Retained earnings	82,395,000	76,706,000
Total Stockholders' Equity	89,452,000	84,426,000
Total Liabilities and Stockholders' Equity	165,118,000	179,306,000
Commitments and Contingencies	$ 0	$ 0

XML

Consolidated Balance Sheets - Parenthetical - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Stockholders' Equity Attributable to Parent [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common Stock, Shares, Outstanding	7,965,289	7,877,945
Treasury Stock, Shares	3,806,355	3,806,355

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues	$ 37,806,000	$ 81,247,000	$ 101,830,000	$ 153,513,000
Cost of Revenue	34,903,000	72,756,000	88,161,000	141,872,000
Gross margin	2,903,000	8,491,000	13,669,000	11,641,000
Selling, General and Administrative Expense	4,109,000	7,224,000	10,614,000	14,390,000
Operating Income (Loss)	(1,206,000)	1,267,000	3,055,000	(2,749,000)
Interest Expense	1,197,000	869,000	2,371,000	1,765,000
Defined Benefit Plan, Net Periodic Benefit Cost (Credit)	(20,000)	(24,000)	(40,000)	(48,000)
Other Nonoperating Income (Expense)	1,177,000	845,000	2,331,000	1,717,000
Income before income taxes	(2,383,000)	422,000	724,000	(4,466,000)
Income Tax Expense (Benefit)	(111,000)	213,000	(4,965,000)	(830,000)
Net income	$ (2,272,000)	$ 209,000	$ 5,689,000	$ (3,636,000)
Net income per common share:
Earnings Per Share, Basic	$ (0.29)	$ 0.03	$ 0.67	$ (0.47)
Earnings Per Share, Diluted	$ (0.29)	$ 0.03	$ 0.67	$ (0.47)
Weighted average shares outstanding:
Basic	7,916,000	7,822,000	7,899,000	7,786,000
Diluted	7,916,000	7,822,000	7,899,000	7,786,000

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net income	$ (2,272,000)	$ 209,000	$ 5,689,000	$ (3,636,000)
Other comprehensive income:
Unrealized Gain (Loss) on Foreign Currency Derivatives, Net, before Tax	803,000	270,000	(871,000)	794,000
Unrealized Foreign Currency Hedge Gain (Loss), Tax	(174,000)	(68,000)	186,000	(202,000)
Interest rate swaps:
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	(61,000)	468,000	722,000	722,000
Income tax benefit (expense)	14,000	(106,000)	(164,000)	(164,000)
Post retirement benefit plan adjustments:
Net actuarial gain	45,000	31,000	90,000	60,000
Prior service costs	(124,000)	(125,000)	(248,000)	(250,000)
Income tax benefit	16,000	20,000	33,000	40,000
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ (1,659,000)	$ (25,000)	$ 4,321,000	$ (3,752,000)

XML

Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock Outstanding	Paid-In Capital	Accumulated Other Comprehensive Income	Treasury Stock	Retained Earnings [Member]
Common Stock, Shares, Outstanding		7,776,164
Balance at Dec. 31, 2018	$ (98,929,000)	$ (78,000)	$ (33,208,000)	$ (2,117,000)	$ 28,403,000	$ (91,929,000)
Net income	(3,636,000)					(3,636,000)
Change in post retirement benefits, net of tax benefit of $16,000	150,000			(150,000)
Change in Unrealized Gain (Loss) on Foreign Currency Fair Value Hedging Instruments	592,000			592,000
Other Comprehensive Income Derivative Instruments Net Of Tax	(558,000)			(558,000)
Treasury Stock, Shares, Acquired		(7,744)
Treasury Stock, Value, Acquired, Cost Method	(60,000)				(60,000)
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		86,316
Common stock issued- net, value	1,000	$ 1,000
Share-based compensation	866,000		866,000
Balance at Jun. 30, 2019	(95,984,000)	$ (79,000)	34,074,000	(2,001,000)	(28,463,000)	(88,293,000)
Common Stock, Shares, Outstanding		7,785,161
Balance at Mar. 31, 2019	(95,553,000)	$ (78,000)	(33,558,000)	(2,236,000)	28,403,000	(88,084,000)
Net income	209,000					209,000
Change in post retirement benefits, net of tax benefit of $16,000	(75,000)			(75,000)
Change in Unrealized Gain (Loss) on Foreign Currency Fair Value Hedging Instruments	202,000			202,000
Other Comprehensive Income Derivative Instruments Net Of Tax	(362,000)			(362,000)
Treasury Stock, Shares, Acquired		(7,744)
Treasury Stock, Value, Acquired, Cost Method	(60,000)				(60,000)
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		77,319
Common stock issued- net, value	1,000	$ 1,000
Share-based compensation	516,000		516,000
Balance at Jun. 30, 2019	$ (95,984,000)	$ (79,000)	34,074,000	(2,001,000)	(28,463,000)	(88,293,000)
Common Stock, Shares, Outstanding		7,854,736
Common Stock, Shares, Outstanding	7,877,945	7,877,945
Balance at Dec. 31, 2019	$ (84,426,000)	$ (79,000)	(34,772,000)	(1,370,000)	28,501,000	(76,706,000)
Net income	5,689,000					5,689,000
Change in post retirement benefits, net of tax benefit of $16,000	(125,000)			(125,000)
Change in Unrealized Gain (Loss) on Foreign Currency Fair Value Hedging Instruments	(685,000)			(685,000)
Other Comprehensive Income Derivative Instruments Net Of Tax	(558,000)			(558,000)
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		87,344
Common stock issued- net, value	1,000	$ 1,000
Share-based compensation	704,000		704,000
Balance at Jun. 30, 2020	(89,452,000)	$ (80,000)	35,476,000	(2,000)	(28,501,000)	(82,395,000)
Common Stock, Shares, Outstanding		7,882,716
Balance at Mar. 31, 2020	(90,722,000)	$ (79,000)	(35,088,000)	611,000	28,501,000	(84,667,000)
Net income	(2,272,000)					(2,272,000)
Change in post retirement benefits, net of tax benefit of $16,000	(63,000)			(63,000)
Change in Unrealized Gain (Loss) on Foreign Currency Fair Value Hedging Instruments	629,000			629,000
Other Comprehensive Income Derivative Instruments Net Of Tax	47,000			47,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		82,573
Common stock issued- net, value	1,000	$ 1,000
Share-based compensation	388,000		388,000
Balance at Jun. 30, 2020	$ (89,452,000)	$ (80,000)	$ 35,476,000	$ (2,000)	$ (28,501,000)	$ (82,395,000)
Common Stock, Shares, Outstanding	7,965,289	7,965,289

XML

Consolidated Statement of Stockholders' Equity (Unaudited) - Parenthetical - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Stockholders' Equity [Abstract]
Tax effect of change in post retirement benefits	$ 16,000	$ 20,000	$ 33,000	$ 40,000
Unrealized Foreign Currency Hedge Gain (Loss), Tax	(174,000)	(68,000)	186,000	(202,000)
Unrealized Interest Rate Swap Gain (Loss), Tax	$ (14,000)	$ 106,000	$ 164,000	$ 164,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ 5,689,000	$ (3,636,000)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,588,000	5,180,000
Increase (Decrease) in Deferred Income Taxes	517,000	0
Share-based compensation	704,000	866,000
(Gain) loss on foreign currency translation and transaction	(45,000)	17,000
Change in operating assets and liabilities:
Accounts receivable	10,842,000	(2,745,000)
Inventories	5,457,000	1,798,000
Prepaid and other assets	(3,667,000)	2,367,000
Accounts payable	(7,910,000)	(1,412,000)
Accrued and other liabilities	1,438,000	1,060,000
Post retirement benefits liability	(130,000)	(198,000)
Net cash provided by operating activities	18,483,000	3,297,000
Cash flows from investing activities:
Purchase of property, plant and equipment	(1,644,000)	(5,201,000)
Net cash used in investing activities	(1,644,000)	(5,201,000)
Proceeds from (Repayments of) Debt [Abstract]
Repayments of Lines of Credit	(59,357,000)	(98,473,000)
Repayments of Long-term Debt	2,258,000	1,688,000
Proceeds from Lines of Credit	47,349,000	101,201,000
Proceeds from (Repayments of) Debt	175,000	0
Payments of Financing Costs	0	(434,000)
Payments related to purchase of treasury stock	0	60,000
Net Cash Provided by (Used in) Financing Activities	(14,091,000)	546,000
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	2,748,000	(1,358,000)
Cash and cash equivalents at beginning of period	1,856,000	1,891,000
Cash and cash equivalents at end of period	4,604,000	533,000
Cash paid for:
Interest (net of amounts capitalized)	2,377,000	1,660,000
Income taxes	302,000	1,016,000
Non Cash:
Fixed asset purchases in accounts payable	$ 146,000	$ 368,000

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying unaudited 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 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” or the “Company”) at June 30, 2020, and the results of operations and cash flows for the six months ended June 30, 2020. The Company has reclassified certain prior-year amounts to conform to the current-year's presentation. The “Notes to Consolidated Financial Statements” contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, should be read in conjunction with these consolidated financial statements.

Core Molding Technologies and its subsidiaries operate in the composites market as one operating segment as a molder of thermoplastic and thermoset structural products. The Company's operating segment consists of two component reporting units, Core Traditional and Horizon Plastics. The Company produces and sells molded products for varied markets, including medium and heavy-duty trucks, automobiles, marine, construction and other commercial markets. The Company offers customers a wide range of manufacturing processes to fit various program volume and investment requirements. These processes include compression molding of sheet molding compound ("SMC"), bulk molding compounds ("BMC"), resin transfer molding ("RTM"), liquid molding of dicyclopentadiene ("DCPD"), spray-up and hand-lay-up, glass mat thermoplastics ("GMT"), direct long-fiber thermoplastics ("D-LFT") and structural foam and structural web injection molding ("SIM"). Core Molding Technologies has its headquarters in Columbus, Ohio, and operates seven production facilities in Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota; Matamoros and Escobedo, Mexico; and Cobourg, Ontario, Canada. All produce structural composite products.

XML

Critical Accounting Policy (Notes)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

On an on-going basis, management evaluates its estimates and judgments. 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, due to the uncertainty around the magnitude and duration of the COVID-19 pandemic, as well as other factors.

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.

Going Concern: Under FASB ASU 2014-15, “Presentation of Financial Statements - Going Concern,” management is required to evaluate conditions or events as related to uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern and to provide related financial disclosures, as applicable. Our consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As further discussed in Note 11, "Debt", as of June 30, 2020, the Company was not in compliance with the leverage and fixed charge coverage ratio requirements under the Company's Amended and Restated Credit Agreement, dated January 16, 2018 (the “A/R Credit Agreement”), with KeyBank National Association as the administrative agent (the "Administrative Agent") and various other financial institutions thereto as lenders (the "Lenders").

On November 22, 2019, the Company entered into a forbearance agreement (the "Forbearance Agreement") with the Lenders. Pursuant to the Forbearance Agreement, the Borrowers and the Lenders acknowledged and confirmed that an event of default occurred under the A/R Credit Agreement resulting from the Borrowers failure to maintain the required fixed charge coverage ratio (as defined in the A/R Credit Agreement) for the fiscal quarter ended September 30, 2019. The Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through March 13, 2020, as long as the Company satisfies the conditions set forth in the Forbearance Agreement. See additional detail in Note 11, "Debt".

On March 13, 2020, the Company amended the Forbearance Agreement and entered into the First Amendment to the Forbearance Agreement (the “First Amended Forbearance Agreement”) with the Lenders. The First Amended Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through May 29, 2020, as long as the Company satisfies the conditions set forth in the First Amended Forbearance Agreement. See additional detail in Note 11, "Debt".

As a result of the COVID-19 pandemic several of the Company’s major customers suspended operations during April and May 2020 due to reduced demand and the impact of government regulations and mandates. Potential new lenders required Company’s customers to resume operations before proceeding with refinancing. On May 29, 2020, the Company amended the First Amended Forbearance Agreement and entered into the Second Amendment to the Forbearance Agreement (the “Second Amended Forbearance Agreement”) with the Lenders. The Second Amended Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the loan documents described in the A/R Credit Agreement through September 30, 2020, as long as the Company satisfies the conditions set forth in the Amended Forbearance Agreement. See additional detail in Note 11, "Debt".

As a result of non-compliance with the A/R Credit Agreement, the Company’s remaining borrowings under the A/R Credit Agreement, consisting of $36,000,000 in borrowings under the revolving credit commitment and the loan commitments, were classified as a current liability in the Company’s consolidated balance sheet as of June 30, 2020. As a result, the Company’s current liabilities exceeded its current assets by $12,345,000 as of June 30, 2020. If the Lenders were to call the loans or demand repayment of all existing borrowings, this could result in the Company being unable to meet its working capital obligations.

The Company has executed term sheets with new lenders to obtain financing to refinance the A/R Credit Agreement. Closing of the new financing is subject to normal closing conditions including completion of business and legal due diligence, asset appraisals, environmental reports, negotiated loan documents, and final credit committee approval. While the Company has executed term sheets, the Company will not have firm commitments until the completion of all closing conditions and therefore there can be no assurances that the Company will be able to secure additional financing. As there can be no assurance that the Company will be able to close its new financing, substantial doubt exists as to the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company's consolidated financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty.

Management implemented an operational turnaround plan starting in December of 2018 and successfully improved operational performance including improved equipment uptime, improved employee retention and reduced premium freight costs for expediting shipments to customers. Even with the negative effects of the COVID-19 pandemic reductions in sales and partial shutdown of operations, the Company’s financial results for the six months ended June 30, 2020 reflect the operational improvements implemented in 2019 as the Company returned to operational profitability. Management believes that the operational turnaround is complete and is now focused on continuous improvement and operational excellence. Management has made, or is in the process of making, the following continuous improvement actions which will further improve financial performance at its operating facilities:

• Implemented quality management systems that provide for continual improvement, defect prevention and reduction of variation and waste in manufacturing processes

• Improved inventory management systems to reduce stock outage events which cause downtime and labor inefficiency

• Implemented the improved mold and waterjet fixture change procedures to reduce production equipment downtime.

• Conducted value add/value engineer projects with customers to remove waste from the operating process and reduce cost

• Implementation of focused problem solving to improve quality and reduce scrap costs

• Implemented cost saving measures and actions to align controllable spending and labor workforce to reduced sales volumes in the current market as a result of the COVID-19 pandemic

• Implemented technical training programs specific to the Company’s products and processes

• Improved free cash flow through improved terms with customers and vendors

• Utilized the Kaizen techniques, process mapping and multi-functional problem solving teams to improve operational performance and reduce waste

The Company’s improved operational performance and free cash flows has resulted in a reduction of borrowings under the A/R Credit Agreement for the six months ended June 30, 2020 of $14,258,000.

The Company has a tax receivable of $5,688,000 as of June 30, 2020, due to tax law changes made by the Coronavirus Aid Relief and Economic Security Act (the "CARES Act") which will allow the Company to carryback tax net operating losses. (See Note 12, "Income Taxes") The Company has completed the required filing with the Internal Revenue Service to claim the tax refund and expects to receive the payment prior to September 30, 2020. The funds from the utilization of the net operating losses will provide additional financial resources for the Company to operate the business and refinance its existing debt.

Revenue Recognition: The Company recognizes revenue from two streams, product revenue and tooling revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products. Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. In certain circumstances, the Company recognizes revenue from product sales when products are produced and the customer takes control at our production facility.

Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer. Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools.

Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.

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 the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company recorded an allowance for doubtful accounts of $109,000 and $50,000 at June 30, 2020 and December 31, 2019, respectively.

Management also records an allowance for estimated customer chargebacks for returns, price discounts and adjustments, premium freight and expediting costs and customer production line disruption costs resulting from late deliveries. At times, customers have asserted a right to significant production line disruption charges to recover damages as a result of late delivery. The Company typically works with its customers to minimize disruption charges, validate damages and negotiate resolution. The Company records accruals for customer chargebacks when a valid charge is probable and the amount of the charge can be reasonably estimated. Should customer chargebacks fluctuate from the estimated amounts, additional allowances may be necessary. The Company reduced accounts receivable for chargebacks by $148,000 at June 30, 2020 and $476,000 at December 31, 2019.

Inventories: Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable value. 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. The Company has recorded an allowance for slow moving and obsolete inventory of $823,000 at June 30, 2020 and $898,000 at December 31, 2019.

Contract Assets/Liabilities: Contract assets and liabilities represent the net cumulative customer billings, vendor payments and revenue recognized for tooling programs. For tooling programs where net revenue recognized and vendor payments exceed customer billings, the Company recognizes a contract asset. For tooling programs where net customer billings exceed revenue recognized and vendor payments, the Company recognizes a contract liability. Customer payment terms vary by contract and can range from progress payments based on work performed or one single payment once the contract is completed. The Company has recorded contract assets of $61,000 as of June 30, 2020and $888,000 at December 31, 2019. Contract assets are generally classified as current within prepaid expenses and other current assets on the Consolidated Balance Sheets. During the six months ended June 30, 2020, the Company recognized no impairments on contract assets. For the six months ended June 30, 2020, the Company recognized $729,000 amount of revenue from contract liabilities outstanding as of December 31, 2019.

Income Taxes: The Company’s Consolidated Balance Sheets include a net non-current deferred tax asset of $2,026,000 for the Canadian and Mexican tax jurisdictions and a net non-current deferred tax liability of $517,000 for the U.S. tax jurisdiction at June 30, 2020. The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. For more information, refer to Note 12, "Income Taxes", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Derivative Instruments: Derivative instruments are utilized to manage exposure to fluctuations in foreign currency exchange rates and interest rates on long term debt obligations. All derivative instruments are formally documented as cash flow hedges and are recorded at fair value at each reporting period. Gains and losses related to currency forward contracts and interest rate swaps are deferred and recorded as a component of Accumulated Other Comprehensive Income (Loss) in the Consolidated Statement of Stockholders' Equity and then subsequently recognized in the Consolidated Statement of Income (Loss) when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income. For additional information on derivative instruments, see Note 14, "Fair Value of Financial Instruments".

Long-Lived Assets: Long-lived assets consist primarily of property, plant and equipment and definite-lived intangibles. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. The Company evaluates whether impairment exists for property, plant and equipment on the basis of undiscounted expected future cash flows from operations before interest. There was no impairment of the Company's long-lived assets for the six months ended June 30, 2020 or June 30, 2019.

Goodwill and Other Intangibles: The Company evaluates goodwill annually on December 31 to determine whether impairment exists, or at interim periods if an indicator of possible impairment exists. As a result of the Horizon Plastics acquisition on January 16, 2018 and the status of its integration, the Company established two reporting units, Core Traditional and Horizon Plastics. The annual impairment tests of goodwill may be completed through qualitative assessments, however the Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any reporting unit in any period. The Company may resume the qualitative assessment for any reporting unit in any subsequent period.

Due to the Company's financial performance and continued depressed stock price, the Company performed a quantitative analysis for both of its reporting units at September 30, 2019. During 2019, the Company incurred a loss of margin in its Horizon Plastics reporting unit caused by selling price decreases that the Company has not been able to fully offset with material cost reductions. As a result of the quantitative analysis, the Company concluded that the carrying value of Horizon Plastics was greater than the fair value, which resulted in a goodwill impairment charge of $4,100,000 at September 30, 2019 representing 19% of the goodwill related to the Horizon Plastics reporting unit.

There were no indicators of impairment for the six months ended June 30, 2020 that would trigger additional analysis; however, should the Company experience a prolonged suspension of operations due to COVID-19, the Company may incur goodwill and intangible impairment charges in the future.

Self-Insurance: The Company is self-insured with respect to its Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota and Brownsville, Texas for medical, dental and vision claims and Columbus and Batavia, Ohio for workers’ compensation claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental, vision and worker’s compensation claims incurred but not reported at June 30, 2020 and December 31, 2019 of $901,000 and $1,203,000, respectively.

Post-retirement benefits: The Company records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain employees. 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 the Company's operations. The effect of a change in healthcare costs is described in Note 13, "Post Retirement Benefits", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company had a liability for post retirement healthcare benefits based on actuarially computed estimates of $9,187,000 at June 30, 2020 and $9,160,000 at December 31, 2019.

Government subsidies: The Company received $1,391,000 in government subsidies during the three and six months ended June 30, 2020. The Company accounted for government subsidies in accordance with International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The Company recorded the assistance in selling, general and administrative expenses and determined that there is reasonable assurance all conditions attached to the assistance were met and the grants would be received. The government subsidies consisted of the Canadian Emergency Wage Subsidy and the Shared Work Programs of Ohio, South Carolina and Minnesota.

XML

Recent Accounting Pronouncement (Notes)

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Update and Change in Accounting Principle [Text Block]

. RECENT ACCOUNTING PRONOUNCEMENTS

Current expected credit loss (CECL)

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” for the purpose of clarifying certain aspects of ASU 2016-13. ASU 2018-19 has the same effective date and transition requirements as ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” which is effective with the adoption of ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments - Credit Losses (Topic 326),” which is also effective with the adoption of ASU 2016-13. In November 2019, the FASB voted to delay the implementation date for certain companies, including those that qualify as a smaller reporting company under SEC rules, until fiscal years beginning after December 15, 2022. We will adopt this ASU on its effective date of January 1, 2023. We do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations, cash flows, or presentation thereof.

Facilitation of the Effects of Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848).  The ASU provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.  The ASU is effective as of March 12, 2020 through December 31, 2022.  We will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis.

XML

Net Income per Common Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Net Income per Common Share

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to the Company's common shares. The Company uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020			2019		2020		2019
Net income (loss)	$	(2,272,000	)	$	209,000	$	5,689,000	$	(3,636,000	)
Less: net income allocated to participating securities	—			10,000		358,000		—
Net income (loss) available to common shareholders	(2,272,000		)	199,000		5,331,000		(3,636,000		)
Weighted average common shares outstanding — basic	7,916,000			7,822,000		7,899,000		7,786,000
Effect of dilutive securities	—			—		—		—
Weighted average common and potentially issuable common shares outstanding — diluted	7,916,000			7,822,000		7,899,000		7,786,000
Basic net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)
Diluted net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)

XML

Major Customers

6 Months Ended

Jun. 30, 2020

Concentration Risks, Types, No Concentration Percentage [Abstract]

Major Customers

The Company had five major customers during the six months ended June 30, 2020, Navistar, Inc. (“Navistar”), Volvo Group North America, LLC (“Volvo”), Universal Forest Products, Inc. (“UFP”), PACCAR, Inc. (“PACCAR”) and BRP, Inc. (“BRP”). Major customers are defined as customers whose sales individually consist of more than ten percent of total sales during any annual or interim reporting period in the current year. The loss of a significant portion of sales to these customers would have a material adverse effect on the business of the Company.

The following table presents sales revenue for the above-mentioned customers for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
UFP product sales	$	9,484,000	$	9,203,000	$	18,471,000	$	15,325,000
UFP tooling sales	—		—		—		—
Total UFP sales	9,484,000		9,203,000		18,471,000		15,325,000
Navistar product sales	6,500,000		17,043,000		17,166,000		31,296,000
Navistar tooling sales	1,088,000		743,000		1,186,000		782,000
Total Navistar sales	7,588,000		17,786,000		18,352,000		32,078,000
Volvo product sales	2,167,000		14,581,000		9,740,000		29,096,000
Volvo tooling sales	622,000		32,000		2,147,000		139,000
Total Volvo sales	2,789,000		14,613,000		11,887,000		29,235,000
PACCAR product sales	3,167,000		12,435,000		11,116,000		24,247,000
PACCAR tooling sales	—		987,000		207,000		1,160,000
Total PACCAR sales	3,167,000		13,422,000		11,323,000		25,407,000
BRP product sales	2,206,000		2,429,000		9,453,000		7,977,000
BRP tooling sales	113,000		38,000		333,000		129,000
Total BRP sales	2,319,000		2,467,000		9,786,000		8,106,000
Other product sales	12,323,000		19,749,000		31,831,000		38,951,000
Other tooling sales	136,000		4,007,000		180,000		4,411,000
Total other sales	12,459,000		23,756,000		32,011,000		43,362,000
Total product sales	35,847,000		75,440,000		97,777,000		146,892,000
Total tooling sales	1,959,000		5,807,000		4,053,000		6,621,000
Total sales	$	37,806,000	$	81,247,000	$	101,830,000	$	153,513,000

XML

Inventory (Notes)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Inventories consisted of the following:

	June 30, 2020		December 31, 2019
Raw materials	$	10,558,000	$	13,041,000
Work in process	1,623,000		1,818,000
Finished goods	4,044,000		6,823,000
	$	16,225,000	$	21,682,000

Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are recorded based on historical and anticipated usage.

XML

Leases (Notes)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Lessee, Operating Leases [Text Block]

7. LEASES

The Company has operating leases with fixed payment terms for certain buildings and warehouses. The Company's leases have remaining lease terms of less than one year to four years, some of which include options to extend the lease for five years. Operating leases are included in operating lease right-of-use ("ROU") assets, and operating lease liabilities in the Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The Company used the applicable incremental borrowing rate at implementation date to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated, the Company will utilize its incremental borrowing rate to perform lease classification tests on lease components and to measure ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	357,000	$	358,000	$	714,000	$	715,000
Total net lease cost	$	357,000	$	358,000	$	714,000	$	715,000

Other supplemental balance sheet information related to leases was as follows:

	June 30, 2020			December 31, 2019
Operating Leases:
Operating lease right of use assets	$	3,832,000		$	4,484,000
Total operating lease right of use assets	$	3,832,000		$	4,484,000
Current operating lease liabilities(A)	$	743,000		$	1,304,000
Noncurrent operating lease liabilities (B)	3,028,000			3,119,000
Total operating lease liabilities	$	3,771,000		$	4,423,000
Weighted average remaining lease term (in years):
Operating leases	3.8			4.0
Weighted average discount rate:
Operating leases	5.0		%	4.9		%

^(A)Current operating lease liabilities are included in accrued other liabilities on the Consolidated Balance Sheets.

^(B) Noncurrent operating lease liabilities are included in other non-current liabilities on the Consolidated Balance Sheets.

Other information related to leases were as follows:

	Six Months Ended
	June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases(C)	$	714,000	$	715,000

^(C)Cash flow from operating lease included in prepaid and other assets on the Consolidated Statements of Cash Flows.

As of June 30, 2020, maturities of lease liabilities were as follows:

	Operating Leases
2020 (remainder of year)	$	716,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	4,522,000
Less: imputed interest	(751,000		)
Total lease obligations	3,771,000
Less: current obligations	(743,000		)
Long-term lease obligations	$	3,028,000

As of December 31, 2019, maturities of lease liabilities were as follows:

	Operating Leases
2020	$	1,433,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	5,239,000
Less: imputed interest	(816,000		)
Total lease obligations	4,423,000
Less: current obligations	(1,304,000		)
Long-term lease obligations	$	3,119,000

XML

Property, Plant & Equipment

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, Plant & Equipment

Property, plant and equipment consisted of the following for the periods specified:

	June 30, 2020			December 31, 2019
Property, plant and equipment	$	172,683,000		$	170,881,000
Accumulated depreciation	(96,155,000		)	(91,675,000		)
Property, plant and equipment — net	$	76,528,000		$	79,206,000

Property, plant, and equipment are recorded at cost, unless obtained through acquisition, then assets are recorded at estimated fair value at the date of acquisition. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The carrying amount of long-lived assets is evaluated annually to determine if an adjustment to the depreciation period or to the unamortized balance is warranted. Depreciation expense for the three months ended June 30, 2020 and 2019 was $2,216,000 and $2,075,000, respectively. Depreciation expense for the six months ended June 30, 2020 and 2019 was $4,488,000 and $4,101,000, respectively. Amounts invested in capital additions in progress were $1,973,000 and $1,615,000 at June 30, 2020 and December 31, 2019, respectively. At June 30, 2020 and December 31, 2019, purchase commitments for capital expenditures in progress were $917,000 and $336,000, respectively.

XML

Goodwill and Intangibles (Notes)

6 Months Ended

Jun. 30, 2020

Goodwill [Line Items]

Goodwill and Intangible Assets Disclosure [Text Block]

. GOODWILL AND INTANGIBLES

Goodwill activity for the six months ended June 30, 2020 consisted of the following:

Balance at December 31, 2019	$	17,376,000
Additions	—
Impairment	—
Balance at June 30, 2020	$	17,376,000

Intangible assets at June 30, 2020 were comprised of the following:

Definite-lived Intangible Assets	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade Name	25 Years	$	250,000	$	(53,000	)	$	197,000
Trademarks	10 Years	1,610,000		(395,000		)	1,215,000
Non-competition Agreement	5 Years	1,810,000		(890,000		)	920,000
Developed Technology	7 Years	4,420,000		(1,552,000		)	2,868,000
Customer Relationships	10-12 Years	9,330,000		(2,040,000		)	7,290,000
Total		$	17,420,000	$	(4,930,000	)	$	12,490,000

The aggregate intangible asset amortization expense was $487,000 for the three months ended June 30, 2020 and 2019, respectively. The aggregate intangible asset amortization expense was $974,000 for the six months ended June 30, 2020 and 2019, respectively.

Intangible assets at December 31, 2019 were comprised of the following:

Definite-lived Intangible Assets	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade Name	25 Years	$	250,000	$	(48,000	)	$	202,000
Trademarks	10 Years	1,610,000		(315,000		)	1,295,000
Non-competition Agreement	5 Years	1,810,000		(709,000		)	1,101,000
Developed Technology	7 Years	4,420,000		(1,237,000		)	3,183,000
Customer Relationships	10-12 Years	9,330,000		(1,647,000		)	7,683,000
Total		$	17,420,000	$	(3,956,000	)	$	13,464,000

XML

Post Retirement Benefits

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Post Retirement Benefits

The components of expense for the Company's post-retirement benefit plans for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Pension expense:
Multi-employer plan	$	145,000		$	231,000		$	391,000		$	462,000
Defined contribution plan	215,000			324,000			508,000			586,000
Total pension expense	360,000			555,000			899,000			1,048,000
Health and life insurance:
Interest cost	59,000			72,000			118,000			144,000
Amortization of prior service costs	(124,000		)	(125,000		)	(248,000		)	(250,000		)
Amortization of net loss	45,000			29,000			90,000			58,000
Net periodic benefit cost	(20,000		)	(24,000		)	(40,000		)	(48,000		)
Total post retirement benefits expense	$	340,000		$	531,000		$	859,000		$	1,000,000

The Company made payments of $511,000 to pension plans and $91,000 for post-retirement healthcare and life insurance during the six months ended June 30, 2020. For the remainder of 2020, the Company expects to make approximately $1,385,000 of pension plan payments, of which $839,000 was accrued at June 30, 2020. The Company also expects to make approximately $1,142,000 of post-retirement healthcare and life insurance payments for the remainder of 2020, all of which were accrued at June 30, 2020.

XML

Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

Debt consists of the following:

	June 30, 2020			December 31, 2019
Term loans, interest at a variable rate (8.0% at June 30, 2020 and 6.30% at December 31, 2019) with monthly payments of interest and quarterly payments of principal through January 2023	$	36,000,000		$	38,250,000
Revolving loans, interest at a variable rate (8.0% at June 30, 2020 and 6.04% at December 31, 2019)	—			12,008,000
Term loan, interest at a fixed rate (5.5% at June 30, 2020) with monthly payments of interest and principal through April 2025	167,000			—
Total	36,167,000			50,258,000
Less deferred loan costs	(672,000		)	(807,000		)
Less current portion	(35,360,000		)	(49,451,000		)
Long-term debt	$	135,000		$	—

Credit Agreement

On January 16, 2018, the Company entered into an Amended and Restated Credit Agreement (the "A/R Credit Agreement") with KeyBank National Association as administrative agent and various financial institutions party thereto as lenders (the "Lenders"). Pursuant to the terms of the A/R Credit Agreement (i) the Company may borrow revolving loans in the aggregate principal amount of up to $40,000,000 (the “U.S. Revolving Loans”) from the Lenders and term loans in the aggregate principal amount of up to $32,000,000 from the Lenders, (ii) the Company's wholly-owned subsidiary, Horizon Plastics International, Inc., (the "Subsidiary") may borrow revolving loans in an aggregate principal amount of up to $10,000,000 from the Lenders (which revolving loans shall reduce the availability of the U.S. Revolving Loans to the Company on a dollar-for-dollar basis) and term loans in an aggregate principal amount of up to $13,000,000 from the Lenders, (iii) the Company obtained a Letter of Credit Commitment of $250,000, of which $160,000 has been issued and (iv) the Company repaid the outstanding term loan balance of $6,750,000. The Credit Agreement is secured by a guarantee of each U.S. and Canadian subsidiary of the Company, and by a lien on substantially all of the present and future assets of the Company and its U.S. and Canadian subsidiaries, except that only 65% of the stock issued by Corecomposites de Mexico, S. de R.L. de C.V. has been pledged.

Concurrent with the closing of the A/R Credit Agreement the Company borrowed the $32,000,000 term loan and $2,000,000 from the U.S. Revolving Loan and the Subsidiary borrowed the $13,000,000 term loan and $2,500,000 from revolving loans to provide $49,500,000 of funding for the acquisition of Horizon Plastics. Interest is payable monthly at one month LIBOR plus a basis point margin of 700 basis points with a LIBOR floor of 100 basis points.

On March 14, 2019, the Company entered into the first amendment (“First Amendment”) to the A/R Credit Agreement (as amended by the First Amendment, the "Amended Credit Agreement") with the Lenders. Pursuant to the terms of the First Amendment, the Company and Lenders agreed to modify certain terms of the A/R Credit Agreement. These modifications included (1) implementation of an availability block on the U.S. Revolving Loans reducing availability from $40,000,000 to $32,500,000, (2) modification to the definition of EBITDA to add back certain one-time expenses, (3) waiver of non-compliance with the leverage covenant as of December 31, 2018 and modification of the leverage ratio definition and covenant to eliminate testing of the leverage ratio until December 31, 2019, (4) waiver of non-compliance with the fixed charge covenant as of December 31, 2018 and modification of the fixed charge coverage ratio definition and covenant requirement, (5) implementation of a capital expenditure spend limit of $7,500,000 during the first six months of 2019 and $12,500,000 for the full year 2019, (6) an increase of the applicable interest margin spread for existing term and revolving loans, and (7) an increase in the commitment fees on any unused U.S. Revolving Loans.

On November 22, 2019, the Company entered into a forbearance agreement (the "Forbearance Agreement") with the Lenders. Pursuant to the Forbearance Agreement, the Borrowers and the Lenders acknowledged and confirmed that an event of default occurred under the A/R Credit Agreement resulting from the Borrowers failure to maintain the required Fixed Charge Coverage Ratio (as defined in the A/R Credit Agreement) for the fiscal quarter ended September 30, 2019. The Forbearance Agreement provided that the Administrative Agent and Lenders shall forbear from the exercise of rights and remedies pursuant to the Loan Documents described in the A/R Credit Agreement through March 13, 2020, as long as the Company satisfies the conditions set forth in the Forbearance Agreement, including, (i) the Borrowers shall remain current on all loan payments during the forbearance period, (ii) on or before December 6, 2019, the Administrative Agent and Lenders shall each receive a copy of a report of Huron Consulting Group containing findings and observations in respect of the businesses and operations of the Company and the Borrowers shall deliver a strategic alternative assessment in respect of the Borrowers’ operations and financing, (iii) on or before December 15, 2019, the Administrative Agent and Lenders shall each receive a copy of appraisals of machinery and equipment and inventory appraisals, and the Borrowers shall have determined and proposed a new capital structure to the Administrative Agent and Lenders, (iv) on or before February 14, 2020, the Borrowers shall have obtained a definitive, written commitment from involved parties and/or lenders providing the basis for implementation of a new capital structure, and (v) on or before March 13, 2020, the Borrowers shall have closed on a new capital structure, acceptable to the Administrative Agents and Lenders. The Forbearance Agreement also implemented a new availability block with respect to the U.S. Revolving Loans portion of the A/R Credit Agreement, reducing availability from $32,500,000 to $28,000,000 and increasing the applicable margin for existing term and revolving loans, as well as increasing the commitment fees on any unused U.S. Revolving Loans.

On March 13, 2020, the Company amended the Forbearance Agreement and entered into the First Amendment to the Forbearance Agreement (the “First Amended Forbearance Agreement”) with the Lenders. Pursuant to the terms of the First Amended Forbearance Agreement, the Company and Lenders agreed to modify certain terms of the Forbearance Agreement and extend the Forbearance Agreement through May 29, 2020. The modifications include (1) a reduction in the U.S. Revolving Loan to $25,000,000 with an availability block of $5,000,000 which can be borrowed with the approval of the lenders, (2) a change of interest rate to LIBOR plus 650 basis points, (3) forbearing compliance with the leverage covenant and fixed charge covenant through May 29, 2020, and (4) implementation of a capital expenditure spend limit of $3,500,000 from the effective date of the First Amended Forbearance Agreement through May 29, 2020.

On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The parties agreed to a fixed interest rate of 550 basis point and a term of 60 months. The amount outstanding at June 30, 2020 was $167,000 of which, $135,000 was classified as long term debt.

On May 29, 2020, the Company amended the First Amended Forbearance Agreement and entered into the Second Amendment to the Forbearance Agreement (the “Second Amended Forbearance Agreement”) with the Lenders. The Second Amended Forbearance Agreement provided that the Company and the Lenders agreed to modify certain terms of the Amended Forbearance Agreement and extend the Forbearance Agreement through September 30, 2020. The modifications include (1) that the Company will maintain liquidity of not less than $5,000,000, to be measured twice monthly after the effective date, on every second and fourth Friday of each month during the forbearance period, (2) the Company shall maintain minimum year-to-date earnings before income tax, depreciation and amortization (“YTD-EBITDA”) of not less than $5,000,000, measured upon delivery of Company’s July 2020 financial statements and also upon delivery of Company’s August 2020 financial statements, with YTD-EBITDA determined based on consolidated EBITDA, (3) a change of interest rate to LIBOR rate plus 700 basis points with a LIBOR floor of 100 basis points, (4) on or before July 15, 2020 the Borrowers shall have obtained executed term sheets from involved parties and/or lenders, (5) on or before September 30, 2020, the Borrowers shall have closed on a new capital structure, (6) forbearing compliance with the leverage covenant and fixed charge covenant through September 30, 2020, and (7) implementation of a capital expenditure spend limit of $3,000,000 for the nine months ended September 30, 2020. Capitalized terms used in this paragraph but not defined shall have the meaning ascribed to such terms in the Seconded Amended Forbearance Agreement.

As a result of non-compliance with the A/R Credit Agreement, the Company’s remaining borrowings under the A/R Credit Agreement, consisting of $36,000,000 under the revolving credit commitment and the term loan commitments, were classified as a current liability in the Company’s consolidated balance sheet as of June 30, 2020. As a result, the Company’s current liabilities exceeded its current assets by $12,345,000 as of June 30, 2020. If the Lenders were to call the loans or demand repayment of all existing borrowings, this could result in the Company being unable to meet its working capital obligations.

The Company has unblocked maximum availability of $20,000,000 of variable rate revolving loans of which $0 is outstanding as of June 30, 2020.

Bank Covenants

The Company is required to meet certain financial covenants included in the A/R Credit Agreement with respect to leverage ratios, fixed charge ratios and capital expenditures. As of June 30, 2020, the Company was in default with its fixed charge coverage and leverage ratio covenants associated with the loans made under the A/R Credit Agreement as described above. As a result of this default the Company and the Administrative Agent on behalf of the Lenders entered into a Second Amended Forbearance Agreement to address the non-compliance and establish milestones for the Company related to restructuring of its existing debt.

The Company has executed term sheets with new lenders to obtain financing to refinance the A/R Credit Agreement. Closing of the new financing is subject to normal closing conditions including completion of business and legal due diligence, asset appraisals, environmental reports, negotiated loan documents, and final credit committee approval. While the Company has executed term sheets, the Company will not have firm commitments until completion of all closing conditions and therefore there can be no assurances that the Company will be able to secure additional financing. As there can be no assurance that the Company will be able to close its new financing, substantial doubt exists as to the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company's consolidated financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty.

Interest Rate Swaps

The Company entered into two interest rate swap agreements that became effective January 18, 2018 and continue through January 2023, one of which was designated as a cash flow hedge for $25,000,000 of the $32,000,000 term loan to the Company mentioned above and the other designated as a cash flow hedge for $10,000,000 of the $13,000,000 term loan to the Subsidiary mentioned above. Under these agreements, the Company will pay a fixed rate of approximately 2.49% to the counterparty and receives 30 day LIBOR for both cash flow hedges. The fair value of the interest rate swap was a liability of $1,428,000 and $706,000 at June 30, 2020 and December 31, 2019, respectively. While the Company is exposed to credit loss on its interest rate swaps in the event of non-performance by the counterparty to the swap, management believes that such non-performance is unlikely to occur given the financial resources of the counterparty.

XML

Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. As of June 30, 2020 and December 31, 2019, the Company had no liability for unrecognized tax benefits. The Company does not anticipate that unrecognized tax benefits will significantly change within the next twelve months.

Income tax benefit for the six months ended June 30, 2020 is estimated to be $4,965,000, approximately 686% of the income before income taxes. Income tax benefit for the six months ended June 30, 2019 was estimated to be $830,000, or approximately 19% of loss before income taxes.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions, including allowing net operating losses to be carried back five years versus an indefinite carryforward. The Company has filed with the Internal Revenue Service to carry back net operating losses incurred in 2018 and 2019 under this new law, resulting in an income tax refund of $6,155,000 of which $466,000 has been received in the second quarter of 2020 and the remaining is expected to be received by September 30th, 2020. An income tax benefit of $5,638,000 was realized in the first quarter of 2020. The income tax benefit consists of the reversal of the full valuation allowance against net deferred tax assets in the United States for approximately $3,267,000. It also consists of a rate benefit of $2,371,000 based on the losses being carried back to years where the Company paid tax at 34% compared to the valuation of the losses being recorded at the 21% current U.S. statutory tax rate.

The Company files income tax returns in the U.S., Mexico, Canada and various state jurisdictions. The Company is not subject to U.S. federal and state income tax examinations by tax authorities for years prior to 2016, not subject to Mexican income tax examinations by Mexican authorities for years prior to 2014 and not subject to Canadian tax examinations by Canadian authorities for years prior to 2018.

XML

Stock Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock Based Compensation

The Company has a Long Term Equity Incentive Plan (the “2006 Plan”), as approved by the Company’s stockholders in May 2006 and as amended in May 2015. The 2006 Plan allows for grants to directors and employees of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance shares, performance units and other incentive awards (“Stock Awards”) up to an aggregate of 3,000,000 awards, each representing a right to buy a share of Core Molding Technologies common stock. Stock Awards can be granted under the 2006 Plan through the earlier of December 31, 2025, or the date the maximum number of available awards under the 2006 Plan have been granted.

Restricted Stock

The Company grants shares of its common stock to certain directors, officers, key managers and employees in the form of unvested stock and units (“Restricted Stock”). These awards are recorded at the market value of the Company's common stock on the date of issuance and amortized ratably as compensation expense over the applicable vesting period, which is typically three years. The Company adjusts compensation expense for actual forfeitures, as they occur.

The following summarizes the status of Restricted Stock and changes during the six months ended June 30, 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2019	343,919		$	9.37
Granted	287,750		4.62
Vested	(87,344	)	10.69
Forfeited	(8,385	)	13.72
Unvested balance at June 30, 2020	535,940		$	6.54

At June 30, 2020 and 2019, there was $2,249,000 and $2,736,000, respectively, of total unrecognized compensation expense, related to Restricted Stock granted under the 2006 Plan. That cost is expected to be recognized over the weighted-average period of 2.6 years. Total compensation cost related to restricted stock grants for the three months ended June 30, 2020 and 2019 was $357,000 and $413,000, respectively, all of which was recorded to selling, general and administrative expense. Total compensation cost related to restricted stock grants for the six months ended June 30, 2020 and 2019 was $649,000 and $763,000, respectively, all of which was recorded to selling, general and administrative expense

During the six months ended June 30, 2020 and 2019, employees surrendered no shares and 7,744 shares of the Company's common stock to satisfy income tax withholding obligations in connection with the vesting of restricted awards.

Stock Appreciation Rights

As part of the Company's 2019 annual grant, Stock Appreciation Rights ("SARs") were granted with a grant price of $10. These awards have a contractual term of five years and vest ratably over a period of three years or immediately vest if the recipient is over 65 years of age. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company's stock appreciation rights activity for the quarter ended June 30, 2020 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019	222,112		$	2.57
Granted	—		—
Exercised	—		—
Forfeited	(27,266	)	2.57
Outstanding at the period ended June 30, 2020	194,846		$	2.57
Exercisable at the period ended June 30, 2020	84,300		$	2.57

The average remaining contractual term for those SARs outstanding at June 30, 2020 is 3.8 years, with no aggregate intrinsic value. At June 30, 2020 and 2019, there was $260,000 and $478,000, respectively, of total unrecognized compensation expense, net of estimated forfeitures, related to SARs. Total compensation cost related to SARs for the three months ended June 30, 2020 and 2019 was $31,000 and $103,000, respectively, all of which was recorded to selling, general and administrative expense. Total compensation cost related to SARs for the six months ended June 30, 2020 and 2019 was $55,000 and $103,000, respectively, all of which was recorded to selling, general and administrative expense. That cost is expected to be recognized over the weighted-average period of 1.8 years.

XML

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This guidance provides a fair value framework that requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment.

The three levels are defined as follows:

Level 1 - Quoted prices in active markets for identical assets and liabilities.

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

Level 3 - Significant unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, interest rate swaps and foreign currency derivatives. Cash and cash equivalents, accounts receivable and accounts payable carrying values as of June 30, 2020 and December 31, 2019 approximate fair value due to the short-term maturities of these financial instruments. The carrying amounts of long-term debt and the revolving line of credit approximate fair value as of June 30, 2020 and December 31, 2019 due to the short term nature of the underlying variable rate LIBOR agreements. The Company had Level 2 fair value measurements at June 30, 2020 and December 31, 2019 relating to the Company’s interest rate swaps and foreign currency derivatives.

Derivative and Hedging Activities

Foreign currency derivatives

The Company conducted business in foreign countries and paid certain expenses in foreign currencies; therefore, the Company was exposed to foreign currency exchange risk between the U.S. Dollar and foreign currencies, which could impact the Company’s operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company entered into forward contracts to exchange a fixed amount of U.S. Dollars for a fixed amount of foreign currency, which will be used to fund future foreign currency cash flows. At inception, all forward contracts are formally documented as cash flow hedges and are measured at fair value each reporting period.

Derivatives are formally assessed both at inception and at least quarterly thereafter, to ensure that derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item. If it is determined that a derivative ceases to be a highly effective hedge, or if the anticipated transaction is no longer probable of occurring, hedge accounting is discontinued, and any future mark-to-market adjustments are recognized in earnings. The effective portion of gain or loss is reported in other comprehensive income and the ineffective portion is reported in earnings. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in the foreign currency. As of June 30, 2020, the Company had no ineffective portion related to the cash flow hedges.

Interest Rate Swaps

The Company entered into interest rate swap contracts to fix the interest rate on an initial aggregate amount of $35,000,000 thereby reducing exposure to interest rate changes. The Company pays a fixed rate of approximately 2.49% to the counterparty and receives 30 day LIBOR for both cash flow hedges. At inception, all interest rate swaps were formally documented as cash flow hedges and are measured at fair value each reporting period. See Note 11, "Debt", for additional information.

Financial Statement Impacts

The following tables detail amounts related to our derivatives designated as hedging instruments:

	Fair Value of Derivative Instruments
	June 30, 2020
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	—	Accrued other liabilities	$	419,000
Notional contract values		$	—		$	3,958,000
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	1,428,000
Notional swap values		$	—		$	28,000,000
	December 31, 2019
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	452,000	Accrued other liabilities	$	—
Notional contract values		$	15,358,000		$	—
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	706,000
Notional swap values		$	—		$	29,750,000

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the three months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020		2019				2020			2019
Foreign exchange contracts	$	1,213,000	$	354,000		Cost of goods sold	$	(364,000	)	$	(79,000	)
						Selling, general and administrative expense	$	(47,000	)	$	(4,000	)
Interest rate swaps	$	205,000	$	(470,000	)	Interest expense	$	(144,000	)	$	(1,000	)

^(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income (Loss) is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the six months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative						Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020			2019				2020			2019
Foreign exchange contracts	$	(532,000	)	$	841,000		Cost of goods sold	$	(306,000	)	$	(55,000	)
							Selling, general and administrative expense	$	(34,000	)	$	8,000
Interest rate swaps	$	(528,000	)	$	(722,000	)	Interest expense	$	(194,000	)	$	—

^(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income (Loss) is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

XML

Accumulated Other Comprehensive Income (Notes)

6 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

The following table presents changes in Accumulated Other Comprehensive Income (Loss), net of tax, for the six months ended June 30, 2020 and 2019:

2019:	Hedging Derivative Activities			Post Retirement Benefit Plan Items(A)			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2018	$	(612,000	)	$	2,729,000		$	2,117,000
Other comprehensive income (loss) before reclassifications	119,000			—			119,000
Amounts reclassified from accumulated other comprehensive income (loss)	(47,000		)	(190,000		)	(237,000		)
Income tax benefit (expense)	(38,000		)	40,000			2,000
Balance at June 30, 2019	$	(578,000	)	$	2,579,000		$	2,001,000
2020:
Balance at December 31, 2019	$	(191,000	)	$	1,561,000		$	1,370,000
Other comprehensive income (loss) before reclassifications	(1,060,000		)	—			(1,060,000		)
Amounts reclassified from accumulated other comprehensive income (loss)	(533,000		)	(158,000		)	(691,000		)
Income tax benefit	350,000			33,000			383,000
Balance at June 30, 2020	$	(1,434,000	)	$	1,436,000		$	2,000

^(A) The effect of post-retirement benefit items reclassified from Accumulated Other Comprehensive Income (Loss) is included in other income and expense on the Consolidated Statements of Income (Loss). These Accumulated Other Comprehensive Income (Loss) components are included in the computation of net periodic benefit cost (see Note 10, "Post Retirement Benefits" for additional details). The tax effect of post-retirement benefit items reclassified from Accumulated Other Comprehensive Income (Loss) is included in income tax expense on the Consolidated Statements of Income (Loss).

XML

Critical Accounting Policy (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Government Subsidy [Policy Text Block]

Government subsidies: The Company received $1,391,000 in government subsidies during the three and six months ended June 30, 2020. The Company accounted for government subsidies in accordance with International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The Company recorded the assistance in selling, general and administrative expenses and determined that there is reasonable assurance all conditions attached to the assistance were met and the grants would be received. The government subsidies consisted of the Canadian Emergency Wage Subsidy and the Shared Work Programs of Ohio, South Carolina and Minnesota.

Contract with Customer, Asset and Liability [Policy Text Block]

Contract Assets/Liabilities: Contract assets and liabilities represent the net cumulative customer billings, vendor payments and revenue recognized for tooling programs. For tooling programs where net revenue recognized and vendor payments exceed customer billings, the Company recognizes a contract asset. For tooling programs where net customer billings exceed revenue recognized and vendor payments, the Company recognizes a contract liability. Customer payment terms vary by contract and can range from progress payments based on work performed or one single payment once the contract is completed. The Company has recorded contract assets of $61,000 as of June 30, 2020and $888,000 at December 31, 2019. Contract assets are generally classified as current within prepaid expenses and other current assets on the Consolidated Balance Sheets. During the six months ended June 30, 2020, the Company recognized no impairments on contract assets. For the six months ended June 30, 2020, the Company recognized $729,000 amount of revenue from contract liabilities outstanding as of December 31, 2019.

Postemployment Benefit Plans, Policy [Policy Text Block]

Post-retirement benefits: The Company records an accrual for post-retirement costs associated with the health care plan sponsored by the Company for certain employees. 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 the Company's operations. The effect of a change in healthcare costs is described in Note 13, "Post Retirement Benefits", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. The Company had a liability for post retirement healthcare benefits based on actuarially computed estimates of $9,187,000 at June 30, 2020 and $9,160,000 at December 31, 2019.

Self Insurance Reserve [Policy Text Block]

Self-Insurance: The Company is self-insured with respect to its Columbus and Batavia, Ohio; Gaffney, South Carolina; Winona, Minnesota and Brownsville, Texas for medical, dental and vision claims and Columbus and Batavia, Ohio for workers’ compensation claims, all of which are subject to stop-loss insurance thresholds. The Company is also self-insured for dental and vision with respect to its Cobourg, Canada location. The Company has recorded an estimated liability for self-insured medical, dental, vision and worker’s compensation claims incurred but not reported at June 30, 2020 and December 31, 2019 of $901,000 and $1,203,000, respectively.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangibles: The Company evaluates goodwill annually on December 31 to determine whether impairment exists, or at interim periods if an indicator of possible impairment exists. As a result of the Horizon Plastics acquisition on January 16, 2018 and the status of its integration, the Company established two reporting units, Core Traditional and Horizon Plastics. The annual impairment tests of goodwill may be completed through qualitative assessments, however the Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any reporting unit in any period. The Company may resume the qualitative assessment for any reporting unit in any subsequent period.

Due to the Company's financial performance and continued depressed stock price, the Company performed a quantitative analysis for both of its reporting units at September 30, 2019. During 2019, the Company incurred a loss of margin in its Horizon Plastics reporting unit caused by selling price decreases that the Company has not been able to fully offset with material cost reductions. As a result of the quantitative analysis, the Company concluded that the carrying value of Horizon Plastics was greater than the fair value, which resulted in a goodwill impairment charge of $4,100,000 at September 30, 2019 representing 19% of the goodwill related to the Horizon Plastics reporting unit.

There were no indicators of impairment for the six months ended June 30, 2020 that would trigger additional analysis; however, should the Company experience a prolonged suspension of operations due to COVID-19, the Company may incur goodwill and intangible impairment charges in the future.

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Instruments: Derivative instruments are utilized to manage exposure to fluctuations in foreign currency exchange rates and interest rates on long term debt obligations. All derivative instruments are formally documented as cash flow hedges and are recorded at fair value at each reporting period. Gains and losses related to currency forward contracts and interest rate swaps are deferred and recorded as a component of Accumulated Other Comprehensive Income (Loss) in the Consolidated Statement of Stockholders' Equity and then subsequently recognized in the Consolidated Statement of Income (Loss) when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income. For additional information on derivative instruments, see Note 14, "Fair Value of Financial Instruments".

Inventory, Policy [Policy Text Block]

Inventories: Inventories, which include material, labor and manufacturing overhead, are valued at the lower of cost or net realizable value. 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. The Company has recorded an allowance for slow moving and obsolete inventory of $823,000 at June 30, 2020 and $898,000 at December 31, 2019.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

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 the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company recorded an allowance for doubtful accounts of $109,000 and $50,000 at June 30, 2020 and December 31, 2019, respectively.

Management also records an allowance for estimated customer chargebacks for returns, price discounts and adjustments, premium freight and expediting costs and customer production line disruption costs resulting from late deliveries. At times, customers have asserted a right to significant production line disruption charges to recover damages as a result of late delivery. The Company typically works with its customers to minimize disruption charges, validate damages and negotiate resolution. The Company records accruals for customer chargebacks when a valid charge is probable and the amount of the charge can be reasonably estimated. Should customer chargebacks fluctuate from the estimated amounts, additional allowances may be necessary. The Company reduced accounts receivable for chargebacks by $148,000 at June 30, 2020 and $476,000 at December 31, 2019.

Revenue [Policy Text Block]

evenue Recognition: The Company recognizes revenue from two streams, product revenue and tooling revenue. Product revenue is earned from the manufacture and sale of sheet molding compound and thermoset and thermoplastic products. Revenue from product sales is generally recognized as products are shipped, as the Company transfers control to the customer and is entitled to payment upon shipment. In certain circumstances, the Company recognizes revenue from product sales when products are produced and the customer takes control at our production facility.

Tooling revenue is earned from manufacturing multiple tools, molds and assembly equipment as part of a tooling program for a customer. Given that the Company is providing a significant service of producing highly interdependent component parts of the tooling program, each tooling program consists of a single performance obligation to provide the customer the capability to produce a single product. Based on the arrangement with the customer, the Company recognizes revenue either at a point in time or over time. When the Company does not have an enforceable right to payment, the Company recognizes tooling revenue at a point in time. In such cases, the Company recognizes revenue upon customer acceptance, which is when the customer has legal title to the tools.

Certain tooling programs include an enforceable right to payment. In those cases, the Company recognizes revenue over time based on the extent of progress towards completion of its performance obligation. The Company uses a cost-to-cost measure of progress for such contracts because it best depicts the transfer of value to the customer and also correlates with the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Under the cost-to-cost measure of progress, progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes: The Company’s Consolidated Balance Sheets include a net non-current deferred tax asset of $2,026,000 for the Canadian and Mexican tax jurisdictions and a net non-current deferred tax liability of $517,000 for the U.S. tax jurisdiction at June 30, 2020. The Company evaluates the balance of deferred tax assets that will be realized based on the premise that the Company is more likely than not to realize deferred tax benefits through the generation of future taxable income. For more information, refer to Note 12, "Income Taxes", of the Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets: Long-lived assets consist primarily of property, plant and equipment and definite-lived intangibles. The recoverability of long-lived assets is evaluated by an analysis of operating results and consideration of other significant events or changes in the business environment. The Company evaluates whether impairment exists for property, plant and equipment on the basis of undiscounted expected future cash flows from operations before interest. There was no impairment of the Company's long-lived assets for the six months ended June 30, 2020 or June 30, 2019.

XML

Net Income per Common Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Computation of basic and diluted net income per common share:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020			2019		2020		2019
Net income (loss)	$	(2,272,000	)	$	209,000	$	5,689,000	$	(3,636,000	)
Less: net income allocated to participating securities	—			10,000		358,000		—
Net income (loss) available to common shareholders	(2,272,000		)	199,000		5,331,000		(3,636,000		)
Weighted average common shares outstanding — basic	7,916,000			7,822,000		7,899,000		7,786,000
Effect of dilutive securities	—			—		—		—
Weighted average common and potentially issuable common shares outstanding — diluted	7,916,000			7,822,000		7,899,000		7,786,000
Basic net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)
Diluted net income (loss) per common share	$	(0.29	)	$	0.03	$	0.67	$	(0.47	)

XML

Major Customers (Tables)

6 Months Ended

Jun. 30, 2020

Concentration Risks, Types, No Concentration Percentage [Abstract]

Schedule of Major Customers

The following table presents sales revenue for the above-mentioned customers for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
UFP product sales	$	9,484,000	$	9,203,000	$	18,471,000	$	15,325,000
UFP tooling sales	—		—		—		—
Total UFP sales	9,484,000		9,203,000		18,471,000		15,325,000
Navistar product sales	6,500,000		17,043,000		17,166,000		31,296,000
Navistar tooling sales	1,088,000		743,000		1,186,000		782,000
Total Navistar sales	7,588,000		17,786,000		18,352,000		32,078,000
Volvo product sales	2,167,000		14,581,000		9,740,000		29,096,000
Volvo tooling sales	622,000		32,000		2,147,000		139,000
Total Volvo sales	2,789,000		14,613,000		11,887,000		29,235,000
PACCAR product sales	3,167,000		12,435,000		11,116,000		24,247,000
PACCAR tooling sales	—		987,000		207,000		1,160,000
Total PACCAR sales	3,167,000		13,422,000		11,323,000		25,407,000
BRP product sales	2,206,000		2,429,000		9,453,000		7,977,000
BRP tooling sales	113,000		38,000		333,000		129,000
Total BRP sales	2,319,000		2,467,000		9,786,000		8,106,000
Other product sales	12,323,000		19,749,000		31,831,000		38,951,000
Other tooling sales	136,000		4,007,000		180,000		4,411,000
Total other sales	12,459,000		23,756,000		32,011,000		43,362,000
Total product sales	35,847,000		75,440,000		97,777,000		146,892,000
Total tooling sales	1,959,000		5,807,000		4,053,000		6,621,000
Total sales	$	37,806,000	$	81,247,000	$	101,830,000	$	153,513,000

XML

Inventory (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	June 30, 2020		December 31, 2019
Raw materials	$	10,558,000	$	13,041,000
Work in process	1,623,000		1,818,000
Finished goods	4,044,000		6,823,000
	$	16,225,000	$	21,682,000

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Lease, Cost [Table Text Block]

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	357,000	$	358,000	$	714,000	$	715,000
Total net lease cost	$	357,000	$	358,000	$	714,000	$	715,000

Supplemental Balance Sheet Disclosures [Text Block]

upplemental balance sheet information related to leases was as follows:

	June 30, 2020			December 31, 2019
Operating Leases:
Operating lease right of use assets	$	3,832,000		$	4,484,000
Total operating lease right of use assets	$	3,832,000		$	4,484,000
Current operating lease liabilities(A)	$	743,000		$	1,304,000
Noncurrent operating lease liabilities (B)	3,028,000			3,119,000
Total operating lease liabilities	$	3,771,000		$	4,423,000
Weighted average remaining lease term (in years):
Operating leases	3.8			4.0
Weighted average discount rate:
Operating leases	5.0		%	4.9		%

Cash Flow, Supplemental Disclosures [Text Block]

Other information related to leases were as follows:

	Six Months Ended
	June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases(C)	$	714,000	$	715,000

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of June 30, 2020, maturities of lease liabilities were as follows:

	Operating Leases
2020 (remainder of year)	$	716,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	4,522,000
Less: imputed interest	(751,000		)
Total lease obligations	3,771,000
Less: current obligations	(743,000		)
Long-term lease obligations	$	3,028,000

As of December 31, 2019, maturities of lease liabilities were as follows:

	Operating Leases
2020	$	1,433,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024	530,000
Total lease payments	5,239,000
Less: imputed interest	(816,000		)
Total lease obligations	4,423,000
Less: current obligations	(1,304,000		)
Long-term lease obligations	$	3,119,000

XML

Property, Plant & Equipment (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment [Table]

Property, plant and equipment consisted of the following for the periods specified:

	June 30, 2020			December 31, 2019
Property, plant and equipment	$	172,683,000		$	170,881,000
Accumulated depreciation	(96,155,000		)	(91,675,000		)
Property, plant and equipment — net	$	76,528,000		$	79,206,000

XML

Goodwill and Intangibles (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill [Line Items]

Schedule of Goodwill [Table Text Block]

Goodwill activity for the six months ended June 30, 2020 consisted of the following:

Balance at December 31, 2019	$	17,376,000
Additions	—
Impairment	—
Balance at June 30, 2020	$	17,376,000

XML

Goodwill and Intangibles Intangibles (Tables)

6 Months Ended

Jun. 30, 2020

Acquired Finite-Lived Intangible Assets [Line Items]

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

Intangible assets at June 30, 2020 were comprised of the following:

Definite-lived Intangible Assets	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade Name	25 Years	$	250,000	$	(53,000	)	$	197,000
Trademarks	10 Years	1,610,000		(395,000		)	1,215,000
Non-competition Agreement	5 Years	1,810,000		(890,000		)	920,000
Developed Technology	7 Years	4,420,000		(1,552,000		)	2,868,000
Customer Relationships	10-12 Years	9,330,000		(2,040,000		)	7,290,000
Total		$	17,420,000	$	(4,930,000	)	$	12,490,000

XML

Post Retirement Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

The components of expense for the Company's post-retirement benefit plans for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Pension expense:
Multi-employer plan	$	145,000		$	231,000		$	391,000		$	462,000
Defined contribution plan	215,000			324,000			508,000			586,000
Total pension expense	360,000			555,000			899,000			1,048,000
Health and life insurance:
Interest cost	59,000			72,000			118,000			144,000
Amortization of prior service costs	(124,000		)	(125,000		)	(248,000		)	(250,000		)
Amortization of net loss	45,000			29,000			90,000			58,000
Net periodic benefit cost	(20,000		)	(24,000		)	(40,000		)	(48,000		)
Total post retirement benefits expense	$	340,000		$	531,000		$	859,000		$	1,000,000

XML

Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity [Table Text Block]

The following summarizes the status of Restricted Stock and changes during the six months ended June 30, 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2019	343,919		$	9.37
Granted	287,750		4.62
Vested	(87,344	)	10.69
Forfeited	(8,385	)	13.72
Unvested balance at June 30, 2020	535,940		$	6.54

XML

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Derivative Instruments, Gain (Loss) [Table Text Block]

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the six months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative						Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020			2019				2020			2019
Foreign exchange contracts	$	(532,000	)	$	841,000		Cost of goods sold	$	(306,000	)	$	(55,000	)
							Selling, general and administrative expense	$	(34,000	)	$	8,000
Interest rate swaps	$	(528,000	)	$	(722,000	)	Interest expense	$	(194,000	)	$	—

^(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income (Loss) is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

The following tables summarize the amount of unrealized and realized gain (loss) recognized in Accumulated Other Comprehensive Income (Loss) ("AOCI") for the three months ended June 30,2020 and 2019:

Derivatives in subtopic 815-20 Cash Flow Hedging Relationship	Amount of Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)(A)	Amount of Realized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
	2020		2019				2020			2019
Foreign exchange contracts	$	1,213,000	$	354,000		Cost of goods sold	$	(364,000	)	$	(79,000	)
						Selling, general and administrative expense	$	(47,000	)	$	(4,000	)
Interest rate swaps	$	205,000	$	(470,000	)	Interest expense	$	(144,000	)	$	(1,000	)

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following tables detail amounts related to our derivatives designated as hedging instruments:

	Fair Value of Derivative Instruments
	June 30, 2020
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	—	Accrued other liabilities	$	419,000
Notional contract values		$	—		$	3,958,000
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	1,428,000
Notional swap values		$	—		$	28,000,000
	December 31, 2019
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Prepaid expense other current assets	$	452,000	Accrued other liabilities	$	—
Notional contract values		$	15,358,000		$	—
Interest rate swaps	Prepaid expense other current assets	$	—	Accrued other liabilities	$	706,000
Notional swap values		$	—		$	29,750,000

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents changes in Accumulated Other Comprehensive Income (Loss), net of tax, for the six months ended June 30, 2020 and 2019:

2019:	Hedging Derivative Activities			Post Retirement Benefit Plan Items(A)			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2018	$	(612,000	)	$	2,729,000		$	2,117,000
Other comprehensive income (loss) before reclassifications	119,000			—			119,000
Amounts reclassified from accumulated other comprehensive income (loss)	(47,000		)	(190,000		)	(237,000		)
Income tax benefit (expense)	(38,000		)	40,000			2,000
Balance at June 30, 2019	$	(578,000	)	$	2,579,000		$	2,001,000
2020:
Balance at December 31, 2019	$	(191,000	)	$	1,561,000		$	1,370,000
Other comprehensive income (loss) before reclassifications	(1,060,000		)	—			(1,060,000		)
Amounts reclassified from accumulated other comprehensive income (loss)	(533,000		)	(158,000		)	(691,000		)
Income tax benefit	350,000			33,000			383,000
Balance at June 30, 2020	$	(1,434,000	)	$	1,436,000		$	2,000

XML

Critical Accounting Policy (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Mar. 31, 2020 USD ($)
Unusual or Infrequent Item, or Both [Line Items]
Contract with Customer, Asset, Not Past Due	$ 61,000		$ 61,000		$ 888,000
Debt, Current	36,167,000		$ 36,167,000		50,258,000
Number of Reporting Units			2
Defined Benefit Plan, Net Periodic Benefit Cost (Credit)	(20,000)	$ (24,000)	$ (40,000)	$ (48,000)
Postemployment Benefits Liability	9,187,000		9,187,000		9,160,000
Self Insurance Reserve	901,000		901,000		1,203,000
Goodwill, Impairment Loss			0		$ 4,100,000
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount					19.00%
Asset Impairment Charges			0	$ 0
Inventory Valuation Reserves	823,000		823,000		$ 898,000
Accounts Receivable, Allowance for Credit Loss	109,000		109,000		50,000
Accounts Receivable, Allowance for Chargebacks	148,000		148,000		476,000
Contract with Customer, Liability, Revenue Recognized			729,000
Working Capital	12,345,000		12,345,000
Income Taxes Receivable	6,870,000		6,870,000		$ 652,000
Government Grant			1,391,000
CARES Act [Member]
Unusual or Infrequent Item, or Both [Line Items]
Income Taxes Receivable	$ 5,688,000		$ 5,688,000			$ 6,155,000

XML

Recent Accounting Pronouncement (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Accounting Changes and Error Corrections [Abstract]
Operating Lease, Right-of-Use Asset	$ 3,832,000	$ 4,484,000
Operating Lease, Liability	$ 3,771,000	$ 4,423,000

XML

Net Income per Common Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net income	$ (2,272,000)	$ 209,000	$ 5,689,000	$ (3,636,000)
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	0	10,000	358,000	0
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic	$ (2,272,000)	$ 199,000	$ 5,331,000	$ (3,636,000)
Weighted average common shares outstanding — basic	7,916,000	7,822,000	7,899,000	7,786,000
Weighted Average Number Diluted Shares Outstanding Adjustment	0	0	0	0
Weighted average common and potentially issuable common shares outstanding — diluted	7,916,000	7,822,000	7,899,000	7,786,000
Earnings Per Share, Basic	$ (0.29)	$ 0.03	$ 0.67	$ (0.47)
Earnings Per Share, Diluted	$ (0.29)	$ 0.03	$ 0.67	$ (0.47)

XML

Major Customers (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Revenue, Major Customer [Line Items]
Number of Major Customers			5
Revenues	$ 37,806,000	$ 81,247,000	$ 101,830,000	$ 153,513,000
Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	35,847,000	75,440,000	97,777,000	146,892,000
Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	1,959,000	5,807,000	4,053,000	6,621,000
Navistar [Member]
Revenue, Major Customer [Line Items]
Revenues	7,588,000	17,786,000	18,352,000	32,078,000
Navistar [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	6,500,000	17,043,000	17,166,000	31,296,000
Navistar [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	1,088,000	743,000	1,186,000	782,000
Volvo [Member]
Revenue, Major Customer [Line Items]
Revenues	2,789,000	14,613,000	11,887,000	29,235,000
Volvo [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	2,167,000	14,581,000	9,740,000	29,096,000
Volvo [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	622,000	32,000	2,147,000	139,000
Universal Forest Products [Member]
Revenue, Major Customer [Line Items]
Revenues	9,484,000	9,203,000	18,471,000	15,325,000
Universal Forest Products [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	9,484,000	9,203,000	18,471,000	15,325,000
Universal Forest Products [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	0	0	0	0
Paccar [Member]
Revenue, Major Customer [Line Items]
Revenues	3,167,000	13,422,000	11,323,000	25,407,000
Paccar [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	3,167,000	12,435,000	11,116,000	24,247,000
Paccar [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	0	987,000	207,000	1,160,000
BRP [Member]
Revenue, Major Customer [Line Items]
Revenues	2,319,000	2,467,000	9,786,000	8,106,000
BRP [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	2,206,000	2,429,000	9,453,000	7,977,000
BRP [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	113,000	38,000	333,000	129,000
Other Customers [Member]
Revenue, Major Customer [Line Items]
Revenues	12,459,000	23,756,000	32,011,000	43,362,000
Other Customers [Member] | Product [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	12,323,000	19,749,000	31,831,000	38,951,000
Other Customers [Member] | Service [Member]
Revenue, Major Customer [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	$ 136,000	$ 4,007,000	$ 180,000	$ 4,411,000

XML

Inventory (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Inventory [Line Items]
Inventory, Raw Materials and Purchased Parts, Net of Reserves	$ 10,558,000	$ 13,041,000
Inventory, Work in Process, Net of Reserves	1,623,000	1,818,000
Inventory, Finished Goods, Net of Reserves	4,044,000	6,823,000
Inventory, Net	$ 16,225,000	$ 21,682,000

XML

Leases (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Renewal Term	5 years		5 years
Operating Lease, Cost	$ 357,000	$ 358,000	$ 714,000	$ 715,000
Operating Lease, Cost	714,000			$ 715,000
Operating Lease, Right-of-Use Asset, Noncurrent	3,832,000		3,832,000		$ 4,484,000
Operating Lease, Right-of-Use Asset	3,832,000		3,832,000		4,484,000
Operating Lease, Liability, Current	(743,000)		(743,000)		(1,304,000)
Operating Lease, Liability, Noncurrent	3,028,000		3,028,000		3,119,000
Operating Lease, Liability	$ 3,771,000		$ 3,771,000		$ 4,423,000
Operating Lease, Weighted Average Remaining Lease Term	3 years 9 months		3 years 9 months		4 years
Operating Lease, Weighted Average Discount Rate, Percent	0.00%		0.00%		0.00%
Lessee, Operating Lease, Liability, to be Paid, Year One	$ 716,000		$ 716,000		$ 1,433,000
Lessee, Operating Lease, Liability, to be Paid, Year Two	1,174,000		1,174,000		1,174,000
Lessee, Operating Lease, Liability, to be Paid, Year Three	1,102,000		1,102,000		1,102,000
Lessee, Operating Lease, Liability, to be Paid, Year Four	1,000,000		1,000,000		1,000,000
Lessee, Operating Lease, Liability, to be Paid, Year Five	530,000		530,000		530,000
Lessee, Operating Lease, Liability, to be Paid	4,522,000		4,522,000		5,239,000
Lessee, Operating Lease, Imputed Interest	(751,000)		(751,000)		(816,000)
Lessee, Operating Lease, Discounted Lease Payments	$ 3,771,000		$ 3,771,000		$ 4,423,000
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	1 year		1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	4 years		4 years

XML

Property, Plant & Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation	$ 2,216,000	$ 2,075,000	$ 4,488,000	$ 4,101,000
Property, plant and equipment	172,683,000		172,683,000		$ 170,881,000
Accumulated depreciation	(96,155,000)		(96,155,000)		(91,675,000)
Property, Plant and Equipment, Net	76,528,000		76,528,000		79,206,000
Capital expenditures in progress	1,973,000		1,973,000		1,615,000
Commitments for capital expenditures in progress	$ 917,000		$ 917,000		$ 336,000

XML

Goodwill and Intangibles (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Goodwill [Line Items]
Amortization of Intangible Assets	$ 487,000	$ 974,000
Goodwill	17,376,000	17,376,000	$ 17,376,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Goodwill	$ 0	0
Goodwill, Impairment Loss		$ 0	$ 4,100,000

XML

Goodwill and Intangibles Intangibles by Major Asset Class (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 487,000		$ 974,000
Finite-Lived Intangible Assets, Gross	17,420,000		17,420,000		$ 17,420,000
Finite-Lived Intangible Assets, Accumulated Amortization	(4,930,000)		(4,930,000)		(3,956,000)
Finite-Lived Intangible Assets, Net	12,490,000		$ 12,490,000		$ 13,464,000
Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			25 years		25 years
Finite-Lived Intangible Assets, Gross	250,000		$ 250,000		$ 250,000
Finite-Lived Intangible Assets, Accumulated Amortization	(53,000)		(53,000)		(48,000)
Finite-Lived Intangible Assets, Net	197,000		$ 197,000		$ 202,000
Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years		10 years
Finite-Lived Intangible Assets, Gross	1,610,000		$ 1,610,000		$ 1,610,000
Finite-Lived Intangible Assets, Accumulated Amortization	(395,000)		(395,000)		(315,000)
Finite-Lived Intangible Assets, Net	1,215,000		$ 1,215,000		$ 1,295,000
Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			5 years		5 years
Finite-Lived Intangible Assets, Gross	1,810,000		$ 1,810,000		$ 1,810,000
Finite-Lived Intangible Assets, Accumulated Amortization	(890,000)		(890,000)		(709,000)
Finite-Lived Intangible Assets, Net	920,000		$ 920,000		$ 1,101,000
Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			7 years		7 years
Finite-Lived Intangible Assets, Gross	4,420,000		$ 4,420,000		$ 4,420,000
Finite-Lived Intangible Assets, Accumulated Amortization	(1,552,000)		(1,552,000)		(1,237,000)
Finite-Lived Intangible Assets, Net	2,868,000		2,868,000		3,183,000
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	9,330,000		9,330,000		9,330,000
Finite-Lived Intangible Assets, Accumulated Amortization	(2,040,000)		(2,040,000)		(1,647,000)
Finite-Lived Intangible Assets, Net	7,290,000		$ 7,290,000		$ 7,683,000
Minimum [Member] | Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years	10 years
Maximum [Member] | Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			12 years	12 years
Product [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	35,847,000	$ 75,440,000	$ 97,777,000	$ 146,892,000
Product [Member] | Universal Forest Products [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	$ 9,484,000	$ 9,203,000	$ 18,471,000	$ 15,325,000

XML

Post Retirement Benefits (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2020
Pension, health and life insurance expense:
Multiemployer Plan, Employer Contribution, Cost	$ 145,000	$ 231,000	$ 391,000	$ 462,000
Defined contribution plan contributions	215,000	324,000	508,000	586,000
Total pension expense	360,000	555,000	899,000	1,048,000
Interest cost	59,000	72,000	118,000	144,000
Amortization of prior service costs	(124,000)	(125,000)	(248,000)	(250,000)
Amortization of net loss	45,000	29,000	90,000	58,000
Net periodic benefit cost	(20,000)	(24,000)	(40,000)	(48,000)
Total post retirement benefits expense	340,000	$ 531,000	859,000	$ 1,000,000
Payments to pension plans			511,000
Payments for post retirement healthcare and life insurance			91,000
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accrued Expected Pension Plan Payments	$ 839,000		$ 839,000
Forecast [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Expected payments to pension plans					$ 1,385,000
Expected future payments for other post retirement benefits					$ 1,142,000

XML

Debt (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Apr. 24, 2020	Dec. 31, 2017
Debt Instrument [Line Items]
Loans Payable	$ 36,000,000		$ 38,250,000
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums	(672,000)		(807,000)
Debt, Current, Net	(35,360,000)		49,451,000
Revolving Line of Credit	0		12,008,000
Other Loans Payable			0
Purchase Price Funded with Debt	49,500,000
Less current portion	(36,167,000)		(50,258,000)
Working Capital	$ 12,345,000
Long-term Debt, Gross			$ 0
Derivative, Fixed Interest Rate	2.49%
Percent of subsidiary stock not security for financing	65.00%
Letter of Credit, Maximum	$ 250,000
Letters of Credit Outstanding, Amount	160,000
Term Loan Domestic [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	32,000,000
Domestic Line of Credit [Member]
Debt Instrument [Line Items]
Revolving Line of Credit	2,000,000
Maximum borrowing capacity	40,000,000
Term Loan Foreign [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 13,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.00%		6.04%
Debt Instrument, Basis Spread on Variable Rate	2.00%
Foreign Line of Credit [Member]
Debt Instrument [Line Items]
Revolving Line of Credit	$ 2,500,000
Existing Term Loan [Member]
Debt Instrument [Line Items]
Loans Payable					$ 6,750,000
Equipment Term Loan [Member]
Debt Instrument [Line Items]
Other Loans Payable	167,000			$ 175,000
Long-term Debt, Gross	$ 135,000
Debt Instrument, Interest Rate, Stated Percentage	5.50%		0.00%
Derivative, Basis Spread on Variable Rate	55000.00%
Line of Credit [Member] | Foreign Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000
First Amendment [Member] | Domestic Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 32,500,000
First Amendment [Member] | Domestic Line of Credit Additional Amount [Member]
Debt Instrument [Line Items]
Derivative, Basis Spread on Variable Rate	70000.00%
Forbearance Agreement [Member] | Domestic Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 28,000,000
Amended Forbearance Agreement [Member] | Unblocked Domestic Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	20,000,000
Amended Forbearance Agreement [Member] | Domestic Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	25,000,000
Amended Forbearance Agreement [Member] | Domestic Line of Credit Additional Amount [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5,000,000
Derivative, Basis Spread on Variable Rate	6.50%
Interest Rate Swap Domestic [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 25,000,000
Interest Rate Swap Foreign [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	10,000,000
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 35,000,000
Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.00%		6.30%
Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Restrictive Covenants	3500000	7500000	12500000
Liability [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Foreign Currency Contracts, Liability, Fair Value Disclosure	$ 1,428,000		$ 706,000

XML

Income Taxes (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2017	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Dec. 31, 2019
Unusual or Infrequent Item, or Both [Line Items]
Deferred Tax Assets, Net, Noncurrent							$ 2,026,000
Income before income taxes	$ (2,383,000)	$ 422,000		$ 724,000	$ (4,466,000)
Effective income tax rate				686.00%	19.00%
Income Taxes Receivable	6,870,000			$ 6,870,000			652,000
Income Taxes Paid, Net				302,000	$ 1,016,000
Deferred Tax Assets, Valuation Allowance	0			0			$ 3,267,000
Income Tax Expense (Benefit)	111,000	(213,000)		$ 4,965,000	830,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			34.00%	21.00%
CANADA
Unusual or Infrequent Item, or Both [Line Items]
Deferred Tax Assets, Net, Noncurrent	2,026,000			$ 2,026,000
UNITED STATES
Unusual or Infrequent Item, or Both [Line Items]
Deferred Tax Liabilities, Net		$ 517,000			$ 517,000
CARES Act [Member]
Unusual or Infrequent Item, or Both [Line Items]
Income Taxes Receivable	5,688,000			5,688,000		$ 6,155,000
Income Taxes Paid, Net	466,000
Deferred Tax Assets, Valuation Allowance	3,267,000			3,267,000
Income Tax Rate Change Benefit				$ 2,371,000
Income Tax Expense (Benefit)	$ (5,638,000)

XML

Stock Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized					3,000,000
Weighted Average Grant Date Fair Value of Restricted Stock
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation			0	7,744
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number					194,846	222,112
Weighted Average Grant Date Fair Value of Restricted Stock
Unvested balance at December 31, 2015, USD per share	$ 2.57		$ 2.57		$ 2.57	$ 2.57
Unvested balance at Period End, USD per share	$ 2.57		$ 2.57
Unrecognized compensation expense		$ 478,000		$ 478,000	$ 260,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			1 year 10 months
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Exercise Price					$ 10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price			$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price					$ 2.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period			(27,266)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Weighted Average Grant Date Fair Value			$ 2.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number					84,300
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term			3 years 10 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					$ 0
Stock Appreciation Rights (SARs) [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs	$ 31,000	103,000	$ 55,000	103,000
Restricted Stock [Member]
Restricted Stock Rollforward, Shares
Unvested balance at December 31, 2016			343,919
Granted			287,750
Vested			(87,344)
Forfeited			(8,385)
Unvested balance at Period End	535,940		535,940
Weighted Average Grant Date Fair Value of Restricted Stock
Unvested balance at December 31, 2015, USD per share	$ 6.54		$ 6.54		$ 6.54	$ 9.37
Granted, USD per share			4.62
Vested, USD per share			10.69
Forfeited, USD per share			13.72
Unvested balance at Period End, USD per share	$ 6.54		$ 6.54
Unrecognized compensation expense					$ 2,249,000		$ 2,736,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			2 years 7 months
Restricted Stock [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs	$ 357,000	$ 413,000	$ 649,000	$ 763,000

XML

Fair Value of Financial Instruments (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative, Fixed Interest Rate	2.49%		2.49%
Foreign Exchange Forward [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments Fair Value	$ 1,213,000	$ 354,000	$ (532,000)	$ 841,000
Foreign Exchange Forward [Member] | Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	0		$ 0			$ 452,000
Description of Location of Foreign Currency Derivatives on Balance Sheet			Prepaid expense other current assets		Prepaid expense other current assets
Derivative, Notional Amount	0		$ 0			15,358,000
Foreign Exchange Forward [Member] | Liability [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Description of Location of Foreign Currency Derivatives on Balance Sheet			Accrued other liabilities		Accrued other liabilities
Foreign Currency Contracts, Liability, Fair Value Disclosure	419,000		$ 419,000			0
Derivative, Notional Amount	3,958,000		3,958,000			0
Interest Rate Swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial Instruments Fair Value	205,000	(470,000)	(528,000)	(722,000)
Interest Rate Swap [Member] | Assets [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	0		$ 0			0
Description of Location of Foreign Currency Derivatives on Balance Sheet			Prepaid expense other current assets		Prepaid expense other current assets
Derivative, Notional Amount	0		$ 0			0
Interest Rate Swap [Member] | Liability [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Description of Location of Foreign Currency Derivatives on Balance Sheet			Accrued other liabilities		Accrued other liabilities
Foreign Currency Contracts, Liability, Fair Value Disclosure						706,000
Derivative, Notional Amount	28,000,000		$ 28,000,000			$ 29,750,000
Interest Rate Swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Face Amount	35,000,000		35,000,000
Cost of Sales [Member] | Foreign Exchange Forward [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	(364,000)	(79,000)	(306,000)	(55,000)
Selling, General and Administrative Expenses [Member] | Foreign Exchange Forward [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	(47,000)	(4,000)	(34,000)	8,000
Interest Expense [Member] | Interest Rate Swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ (144,000)	$ (1,000)	$ (194,000)	$ 0

XML

Fair Value of Financial Instruments Derivative Instruments and Hedging Activities (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Foreign Exchange Forward [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Financial Instruments Fair Value	$ 1,213,000	$ 354,000	$ (532,000)	$ 841,000
Foreign Exchange Forward [Member] | Selling, General and Administrative Expenses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	(47,000)	(4,000)	(34,000)	8,000
Foreign Exchange Forward [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	(364,000)	(79,000)	(306,000)	(55,000)
Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Financial Instruments Fair Value	205,000	(470,000)	(528,000)	(722,000)
Interest Rate Swap [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ (144,000)	$ (1,000)	$ (194,000)	$ 0

XML

Accumulated Other Comprehensive Income (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ 2,000		$ 2,000		$ 1,370,000
Unrealized Foreign Currency Hedge Gain (Loss), Tax	(174,000)	$ (68,000)	186,000	$ (202,000)
Derivative [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(1,434,000)	(578,000)	(1,434,000)	(578,000)	(191,000)	$ (612,000)
Unrealized Loss on Foreign Currency Derivatives, before Tax			(1,060,000)	119,000
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net			(533,000)	(47,000)
Other Comprehensive Income (Loss), Tax			350,000	(38,000)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	1,436,000	2,579,000	1,436,000	2,579,000	1,561,000	2,729,000
Unrealized Loss on Foreign Currency Derivatives, before Tax			0	0
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Before Tax			158,000	190,000
Other Comprehensive Income (Loss), Tax			33,000	40,000
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ 2,000	$ 2,001,000	2,000	2,001,000	$ 1,370,000	$ 2,117,000
Unrealized Loss on Foreign Currency Derivatives, before Tax			(1,060,000)	119,000
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax			(691,000)	(237,000)
Other Comprehensive Income (Loss), Tax			$ 383,000	$ 2,000