UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

☑

QUARTERLY

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

OF

1934

For the quarterly period ended September

30, 2020

OR

☐

TRANSITION REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

for the transition period from

 To

Commission File Number

001-12505

CORE MOLDING TECHNOLOGIES, INC.

___________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Delaware

31-1481870

(State or other jurisdiction

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

☑

 No

☐

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

☑

 No

☐

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

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☑

(Do not check if a smaller

reporting company)

Emerging growth company

☐

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.

☐

Indicate by check mark whether the registrant is a shell company as defined in Rule

12b-2 of the Exchange Act. Yes

☐

 No

☑

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 November 6, 2020, the latest practicable date,

8,496,655

 shares of the registrant’s common stock were issued, which

includes

524,782

 shares of unvested restricted common stock.

2

Table of Contents

3

4

5

6

8

9

27

34

35

36

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37

37

37

38

39

3

Item 1. Financial Statements

Part I — Financial Information

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

(Unaudited)

Three months ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net sales

$

59,873,000

$

74,655,000

$

161,705,000

$

228,168,000

Cost of sales

49,035,000

68,171,000

137,192,000

210,043,000

Gross margin

10,838,000

6,484,000

24,513,000

18,125,000

Selling, general and administrative expense

6,517,000

7,041,000

17,136,000

21,431,000

Goodwill impairment

—

4,100,000

—

4,100,000

Total expenses

6,517,000

11,141,000

17,136,000

25,531,000

Operating income (loss)

4,321,000

(4,657,000)

7,377,000

(7,406,000)

Other income and expense

Interest expense

966,000

1,113,000

3,338,000

2,878,000

Net periodic post-retirement benefit

(20,000)

(23,000)

(60,000)

(71,000)

Total other expense

946,000

1,090,000

3,278,000

2,807,000

Income (loss) before taxes

3,375,000

(5,747,000)

4,099,000

(10,213,000)

Income tax expense (benefit)

32,000

378,000

(4,933,000)

(452,000)

Net income (loss)

$

3,343,000

$

(6,125,000)

$

9,032,000

$

(9,761,000)

Net income (loss) per common share:

Basic

$

0.39

$

(0.78)

$

1.07

$

(1.25)

Diluted

$

0.39

$

(0.78)

$

1.07

$

(1.25)

See notes to unaudited consolidated financial statements.

4

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three months ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net income (loss)

$

3,343,000

$

(6,125,000)

$

9,032,000

$

(9,761,000)

Other comprehensive income (loss):

Foreign currency hedging derivatives:

Unrealized hedge gain (loss)

415,000

(254,000)

(456,000)

539,000

Income tax benefit (expense)

(88,000)

58,000

98,000

(144,000)

Interest rate swaps:

Unrealized hedge gain (loss)

172,000

(87,000)

(550,000)

(809,000)

Income tax benefit (expense)

(39,000)

20,000

125,000

184,000

Post retirement benefit plan adjustments:

Net actuarial gain

46,000

28,000

136,000

88,000

Prior service costs

(124,000)

(122,000)

(372,000)

(372,000)

Income tax benefit

17,000

20,000

50,000

60,000

Comprehensive income (loss)

$

3,742,000

$

(6,462,000)

$

8,063,000

$

(10,215,000)

See notes to unaudited consolidated financial statements.

5

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

September 30, 

2020

December 31,

(Unaudited)

2019

Assets:

Current assets:

Cash and cash equivalents

$

14,809,000

$

1,856,000

Accounts receivable, net

26,306,000

32,424,000

Inventories, net

15,233,000

21,682,000

Income tax receivable

2,657,000

652,000

Prepaid expenses and other current assets

3,688,000

4,611,000

Total current assets

62,693,000

61,225,000

Right of use asset

3,506,000

4,484,000

Property, plant and equipment, net

75,207,000

79,206,000

Goodwill

17,376,000

17,376,000

Intangibles, net

12,003,000

13,464,000

Other non-current assets

3,215,000

3,551,000

Total Assets

$

174,000,000

$

179,306,000

Liabilities and Stockholders’ Equity:

Current liabilities:

Current portion of long-term debt

$

2,753,000

$

49,451,000

Accounts payable

17,949,000

19,910,000

Contract liabilities

2,745,000

3,698,000

Compensation and related benefits

6,450,000

5,515,000

Accrued other liabilities

7,101,000

5,260,000

Total current liabilities

36,998,000

83,834,000

Long-term debt

31,537,000

—

Other non-current liabilities

3,962,000

3,119,000

Post retirement benefits liability

7,974,000

7,927,000

Total Liabilities

$

80,471,000

$

94,880,000

Commitments and Contingencies

—

—

Stockholders’ Equity:

Preferred stock — $0.01 par value, authorized shares — 10,000,000; no shares outstanding at

September 30, 2020 and December 31, 2019

—

—

Common stock — $0.01 par value, authorized shares – 20,000,000; outstanding shares: 7,971,873 at

September 30, 2020 and 7,877,945 at December 31, 2019

80,000

79,000

Paid-in capital

35,831,000

34,772,000

Accumulated other comprehensive income (loss), net of income taxes

401,000

1,370,000

Treasury stock - at cost, 3,810,929 at September 30, 2020 and 3,806,355 at December 31, 2019

(28,521,000)

(28,501,000)

Retained earnings

85,738,000

76,706,000

Total Stockholders’ Equity

93,529,000

84,426,000

Total Liabilities and Stockholders’ Equity

$

174,000,000

$

179,306,000

See notes to unaudited consolidated financial statements.

6

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statement of Stockholders’ Equity

(Unaudited)

For the three months ended September

30, 2019:

Common Stock

Outstanding

Accumulated

Other

Total

Paid-In

Comprehensive

Treasury

Retained 

Stockholders'

Shares

Amount

Capital

Income

Stock

Earnings

Equity

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

Net loss

(6,125,000)

(6,125,000)

Change in post retirement 

benefits, net of tax benefit

of $20,000

(75,000)

(75,000)

Unrealized foreign currency 

hedge loss, net of tax 

benefit of $58,000

(196,000)

(196,000)

Change in interest rate 

swaps, net of tax benefit 

of $20,000

(67,000)

(67,000)

Share-based compensation

398,000

398,000

Balance at September 30, 

2019

7,854,736

$

79,000

$

34,472,000

$

1,663,000

$

(28,463,000)

$

82,168,000

$

89,919,000

For the nine months ended September

30, 2019:

Common Stock

Outstanding

Accumulated

Other

Total

Paid-In

Comprehensive

Treasury

Retained 

Stockholders'

Shares

Amount

Capital

Income

Stock

Earnings

Equity

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

(9,761,000)

(9,761,000)

Change in post retirement 

benefits, net of tax 

benefit of $60,000

(225,000)

(225,000)

Unrealized foreign currency 

hedge gain, net of tax of 

$144,000

396,000

396,000

Change in interest rate 

swaps, net of tax benefit 

of $184,000

(625,000)

(625,000)

Purchase of treasury stock

(7,744)

(60,000)

(60,000)

Restricted stock vested

86,316

1,000

1,000

Share-based compensation

1,264,000

1,264,000

Balance at September 30, 

2019

7,854,736

$

79,000

$

34,472,000

$

1,663,000

$

(28,463,000)

$

82,168,000

$

89,919,000

7

For the three months ended September

30, 2020:

Common Stock

Outstanding

Accumulated

Other

Total

Paid-In

Comprehensive

Treasury

Retained 

Stockholders'

Shares

Amount

Capital

Income

Stock

Earnings

Equity

Balance at June 30, 2020

7,965,289

$

80,000

$

35,476,000

$

2,000

$

(28,501,000)

$

82,395,000

$

89,452,000

Net income

3,343,000

3,343,000

Change in post retirement 

benefits, net of tax 

benefit of $17,000

(61,000)

(61,000)

Unrealized foreign currency 

hedge gain, net of tax 

of $88,000

327,000

327,000

Change in interest rate 

swaps, net of tax 

of $39,000

133,000

133,000

Purchase of treasury stock

(4,574)

(20,000)

(20,000)

Restricted stock vested

11,158

Share-based compensation

355,000

355,000

Balance at September 30, 

2020

7,971,873

$

80,000

$

35,831,000

$

401,000

$

(28,521,000)

$

85,738,000

$

93,529,000

For the nine months ended September

30, 2020:

Common Stock

Outstanding

Accumulated

Other

Total

Paid-In

Comprehensive

Treasury

Retained 

Stockholders'

Shares

Amount

Capital

Income

Stock

Earnings

Equity

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

9,032,000

9,032,000

Change in post retirement 

benefits, net of tax 

benefit of $50,000

(186,000)

(187,000)

Unrealized foreign currency 

hedge loss, net of tax

benefit of $98,000

(358,000)

(358,000)

Change in interest rate 

swaps, net of tax benefit 

of $125,000

(425,000)

(424,000)

Purchase of treasury stock

(4,574)

(20,000)

(20,000)

Restricted stock vested

98,502

1,000

1,000

Share-based compensation

1,059,000

1,059,000

Balance at September 30, 

2020

7,971,873

$

80,000

$

35,831,000

$

401,000

$

(28,521,000)

$

85,738,000

$

93,529,000

See notes to unaudited consolidated financial statements.

8

Core Molding Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

September 30,

2020

2019

Cash flows from operating activities:

Net income (loss)

$

9,032,000

$

(9,761,000)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

8,425,000

7,700,000

Deferred income tax

517,000

(632,000)

Goodwill impairment

—

4,100,000

Share-based compensation

1,059,000

1,264,000

Losses (gains) on foreign currency translation

203,000

(22,000)

Change in operating assets and liabilities:

Accounts receivable

6,118,000

(378,000)

Inventories

6,449,000

2,352,000

Prepaid and other assets

(747,000)

1,900,000

Accounts payable

(2,053,000)

(2,505,000)

Accrued and other liabilities

2,238,000

253,000

Post retirement benefits liability

(189,000)

(298,000)

Net cash provided by operating activities

31,052,000

3,973,000

Cash flows from investing activities:

Purchase of property, plant and equipment

(2,716,000)

(6,280,000)

Net cash used in investing activities

(2,716,000)

(6,280,000)

Cash flows from financing activities:

Gross repayments on revolving line of credit

(59,356,000)

(148,679,000)

Gross borrowings on revolving line of credit

47,349,000

152,121,000

Proceeds from term loan

175,000

—

Payment of principal on term loans

(3,391,000)

(2,532,000)

Payment of deferred loan costs

(140,000)

(434,000)

Payments related to the purchase of treasury stock

(20,000)

(60,000)

Net cash provided by (used in) financing activities

(15,383,000)

416,000

Net change in cash and cash equivalents

12,953,000

(1,891,000)

Cash and cash equivalents at beginning of period

1,856,000

1,891,000

Cash and cash equivalents at end of period

$

14,809,000

$

—

Cash paid for:

 Interest

$

3,523,000

$

2,706,000

 Income taxes

$

467,000

$

1,160,000

Non-cash investing activities:

Fixed asset purchases in accounts payable

$

146,000

$

429,000

See notes to unaudited consolidated financial statements.

9

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 September

30, 2020, and the results of operations and cash flows for the nine months ended

September

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 production facilities

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. As of September 30, 2020, the Company was in default

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") as discussed in Note 11, “Debt”. As a result of the default, the Lenders requested that the

Company seek alternative financing, which caused uncertainty about the Company’s future liquidity and raised substantial doubt

about the Company’s ability to continue as a going concern.

10

On October 27, 2020, the Company entered into a credit agreement and a master security agreement (the “Refinancing

Agreements”) with Wells Fargo Bank, National Association and FGI Equipment Finance LLC, respectively, as discussed in Note

16, “Subsequent Events”, and repaid all of its obligations under the A/R Credit Agreement. Management believes that the

Refinancing Agreements will provide sufficient liquidity to sustain the Company’s needs for the next 12 months. The closing of

the Refinancing Agreements alleviated the substantial doubt about the Company’s ability to continue as a going concern prior to

the filing date of our Form 10-Q, see Note 16, “Subsequent Events”.

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 title and risk of ownership to the

customer and is entitled to payment. In limited circumstances, the Company recognizes revenue from product sales when products

are produced and the customer takes title and risk of ownership at the Company's production facility.

Tooling revenue is earned from manufacturing 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 $

130,000

 and $

50,000

 at September

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 $

105,000

 at September

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 $

726,000

 at September

30, 2020 and $

898,000

 at December

31, 2019.

11

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 $

343,000

 at September

30, 2020, and $

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. For the nine

months ended September

30, 2020, the Company recognized

no

 impairments on contract assets. For the nine months ended

September 30, 2020, the Company recognized $

5,710,000

 amount of revenue from contract liabilities related to open jobs

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

September 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 nine months ended September

30, 2020 or September

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 nine months ended September 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.

12

Self-Insurance:

 The Company is self-insured with respect to its Columbus and Batavia, Ohio, Gaffney, South Carolina, Winona,

Minnesota and Brownsville, Texas medical, dental and vision claims and Columbus and Batavia, Ohio 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 September

30, 2020 and December

31, 2019 of $

807,000

 and

$

1,203,000

 respectively.

Post-retirement Benefits:

 Management records an accrual for post-retirement costs associated with the health care plan sponsored

by Core Molding Technologies. Should actual results differ from the assumptions used to determine the reserves, additional

provisions may be required. In particular, increases in future healthcare costs above the assumptions could have an adverse effect

on Core Molding Technologies’ operations. The effect of a change in healthcare costs is described in Note 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. Core Molding Technologies had a liability for post retirement healthcare benefits based on

actuarially computed estimates of $

9,207,000

 at September

30, 2020 and $

9,160,000

 at December

31, 2019.

Government Subsidies

:

 The Company received $

25,000

 and $

1,416,000

 in government subsidies during the three and nine

months ended September 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, Employee Retention Credit under the Cares Act and the Shared Work Programs of Ohio, South

Carolina and Minnesota.

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.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. This guidance

is intended to simplify various aspects of income tax accounting including the elimination of certain exceptions related to the

approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of

deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise

taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis

of goodwill. The Company adopted the new standard effective January 1, 2020 during the third quarter with no material impact

13

on our consolidated financial statements. Adoption of this guidance requires certain changes to primarily be made prospectively,

with some changes to be made retrospectively.

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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net income (loss)

$

3,343,000

$

(6,125,000)

$

9,032,000

$

(9,761,000)

Less: net income allocated to participating securities

206,000

—

558,000

—

Net income (loss) available to common shareholders

$

3,137,000

$

(6,125,000)

$

8,474,000

$

(9,761,000)

Weighted average common shares outstanding — basic

7,969,000

7,851,000

7,922,000

7,804,000

Effect of dilutive securities

—

—

—

—

Weighted average common and potentially issuable

common shares outstanding — diluted

7,969,000

7,851,000

7,922,000

7,804,000

Basic net income (loss) per common share

$

0.39

$

(0.78)

$

1.07

$

(1.25)

Diluted net income (loss) per common share

$

0.39

$

(0.78)

$

1.07

$

(1.25)

14

5. MAJOR CUSTOMERS

The Company had five major customers during the nine months ended September 30, 2020, Universal Forest Products, Inc.

(“UFP”), Navistar, Inc. (“Navistar ”), PACCAR, Inc. (“PACCAR”), Volvo Group North America, LLC (“Volvo”), 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 nine months ended September

30, 2020 and 2019:

Three months ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

UFP product sales

$

12,188,000

$

6,751,000

$

30,659,000

$

22,076,000

UFP tooling sales

—

—

—

—

Total UFP sales

12,188,000

6,751,000

30,659,000

22,076,000

Navistar product sales

8,065,000

15,115,000

25,231,000

46,411,000

Navistar tooling sales

5,198,000

145,000

6,384,000

927,000

Total Navistar sales

13,263,000

15,260,000

31,615,000

47,338,000

PACCAR product sales

8,268,000

11,532,000

19,383,000

35,779,000

PACCAR tooling sales

179,000

165,000

386,000

1,325,000

Total PACCAR sales

8,447,000

11,697,000

19,769,000

37,104,000

Volvo product sales

4,907,000

11,117,000

14,647,000

40,213,000

Volvo tooling sales

38,000

61,000

2,186,000

200,000

Total Volvo sales

4,945,000

11,178,000

16,833,000

40,413,000

BRP product sales

4,240,000

3,116,000

13,693,000

11,287,000

BRP tooling sales

175,000

2,502,000

508,000

3,358,000

Total BRP sales

4,415,000

5,618,000

14,201,000

14,645,000

Other product sales

16,572,000

19,880,000

48,406,000

58,637,000

Other tooling sales

43,000

4,271,000

222,000

7,955,000

Total other sales

16,615,000

24,151,000

48,628,000

66,592,000

Total product sales

54,240,000

67,511,000

152,019,000

214,403,000

Total tooling sales

5,633,000

7,144,000

9,686,000

13,765,000

Total sales

$

59,873,000

$

74,655,000

$

161,705,000

$

228,168,000

6. INVENTORY

Inventories, net consisted of the following:

September 30, 2020

December 31, 2019

Raw materials

$

9,871,000

$

13,041,000

Work in process

1,536,000

1,818,000

Finished goods

3,826,000

6,823,000

Total

$

15,233,000

$

21,682,000

15

Inventory quantities on-hand are regularly reviewed, and where necessary, provisions for excess and obsolete inventory are

recorded based on historical and anticipated usage.

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, accrued other liabilities and other non-current

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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Operating lease cost

$

357,000

$

358,000

$

1,072,000

$

1,073,000

Total net lease cost

$

357,000

$

358,000

$

1,072,000

$

1,073,000

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

September 30, 2020

December 31, 2019

Operating leases:

Operating lease right of use assets

$

3,506,000

$

4,484,000

Total operating lease right of use assets

$

3,506,000

$

4,484,000

Current operating lease liabilities

(A)

$

843,000

$

1,304,000

Noncurrent operating lease liabilities

(B)

2,602,000

3,119,000

Total operating lease liabilities

$

3,445,000

$

4,423,000

Weighted average remaining lease term (in years):

Operating leases

3.5

4.0

Weighted average discount rate:

Operating leases

5.0

%

4.9

%

16

(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:

Nine Months Ended

September 30,

2020

2019

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

(C)

$

1,072,000

$

1,073,000

(C)

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

As of September

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

Operating Leases

2020 (remainder of year)

$

358,000

2021

1,174,000

2022

1,102,000

2023

1,000,000

2024

530,000

 Total lease payments

4,164,000

Less: imputed interest

(719,000)

 Total lease obligations

3,445,000

Less: current obligations

(843,000)

 Long-term lease obligations

$

2,602,000

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

17

8. PROPERTY, PLANT & EQUIPMENT

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

September 30, 2020

December 31, 2019

Property, plant and equipment

$

173,644,000

$

170,881,000

Accumulated depreciation

(98,437,000)

(91,675,000)

Property, plant and equipment — net

$

75,207,000

$

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 September 30, 2020 and 2019 was

$2,273,000 and $1,977,000, respectively. Depreciation expense for the nine months ended September 30, 2020 and 2019 was

$6,764,000 and $5,115,000, respectively. Amounts invested in capital additions in progress were $1,858,000 and $1,615,000 at

September 30, 2020 and December 31, 2019, respectively. At September 30, 2020 and December 31, 2019, purchase

commitments for capital expenditures in progress were $338,000 and $336,000, respectively.

9. GOODWILL AND INTANGIBLES

Goodwill activity for the nine months ended September

30, 2020 consisted of the following:

Balance at December 31, 2019

$

17,376,000

Additions

—

Impairment

—

Balance at September 30, 2020

$

17,376,000

Intangibles, net at September

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

$

(56,000)

$

194,000

Trademarks

10 Years

1,610,000

(435,000)

1,175,000

Non-competition agreement

5 Years

1,810,000

(981,000)

829,000

Developed technology

7 Years

4,420,000

(1,709,000)

2,711,000

Customer relationships

10-12 Years

9,330,000

(2,236,000)

7,094,000

Total

$

17,420,000

$

(5,417,000)

$

12,003,000

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

The aggregate intangible asset amortization expense was $1,461,000 for the nine months ended September 30, 2020 and 2019.

Intangibles, net at December

31, 2019 were comprised of the following:

18

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

10. POST RETIREMENT BENEFITS

The components of expense for the Company’s post-retirement benefit plans for the three and nine months ended September

30,

2020 and 2019 are as follows:

Three months ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Pension expense:

Multi-employer plan

$

157,000

$

270,000

$

549,000

$

732,000

Defined contribution plan

258,000

364,000

766,000

950,000

Total pension expense

415,000

634,000

1,315,000

1,682,000

Health and life insurance:

Interest cost

59,000

72,000

177,000

216,000

Amortization of prior service costs

(124,000)

(125,000)

(372,000)

(375,000)

Amortization of net loss

45,000

30,000

135,000

88,000

Net periodic benefit cost

(20,000)

(23,000)

(60,000)

(71,000)

Total post retirement benefits expense

$

395,000

$

611,000

$

1,255,000

$

1,611,000

The Company made payments of $1,518,000 to pension plans and $131,000 for post-retirement healthcare and life insurance

during the nine months ended September 30, 2020. For the remainder of 2020, the Company expects to make approximately

$276,000 of pension plan payments, of which $98,000 was accrued at September 30, 2020. The Company also expects to make

approximately $1,102,000 of post-retirement healthcare and life insurance payments for the remainder of 2020, all of which were

accrued at September 30, 2020.

19

11. DEBT

Debt consists of the following:

September 30,

December 31, 

2020

2019

Term loans, interest at a variable rate (8.0% at September 30, 2020 and 6.30% at

December 31, 2019) with monthly payments of interest and quarterly payments of

principal through January 2023

$

34,875,000

$

38,250,000

Revolving loans, interest at a variable rate (8.0% at September 30, 2020 and 6.04% at 

December 31, 2019)

—

12,008,000

Term loan, interest at a fixed rate (5.5% at September 30, 2020) with monthly payments 

of interest and principal through April 2025

160,000

—

Total

35,035,000

50,258,000

Less deferred loan costs

(745,000)

(807,000)

Less current portion

(2,753,000)

(49,451,000)

Long-term debt

$

31,537,000

$

—

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 “ US 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 US 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 A/R 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.

During 2019, the Company 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). On November 22, 2019, the Company and the Lenders entered into a forbearance agreement (the

"Forbearance Agreement"), which was amended twice, first on March 13, 2020 (the "Amended Forbearance Agreement") and

then on May 29, 2020 (the “Second Amended Forbearance Agreement”).

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, 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-

20

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.

The Company has unblocked maximum availability of $20,000,000 of variable rate revolving loans of which $0 is outstanding

as of September 30, 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 5.5% and a term of 60 months. The amount outstanding at September 30, 2020 was

$160,000 of which, $127,000 was classified as long term debt.

On October 27, 2020, the Company entered into the Refinancing Agreements, as defined in Note 2, “Critical Accounting Policies

and Estimates ”, and repaid all of its obligations under the A/R Credit Agreement. Management believes that the Refinancing

Agreements will provide sufficient liquidity to sustain the Company’s needs for the next 12 months. The closing of the

Refinancing Agreements alleviated the substantial doubt about the Company’s ability to continue as a going concern prior to the

filing date of our Form 10 -Q, see Note 16, “Subsequent Event”. The Company, therefore, classified its debt between short -term

and long-term in accordance with the A/R Credit Agreement.

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 $1,255,000 and

$706,000 at September 30, 2020 and December 31, 2019, respectively. On October 27, 2020, concurrent with the Company

entering into the Refinancing Agreements, both interest rate swap agreement were terminated, see Note 16, “Subsequent Events”.

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 September 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 September 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 nine months ended September 30, 2020 is estimated to be $4,933,000, approximately 120.3% of income

before income taxes. The effective tax rate for 2020 reflects recording net operating losses in U.S. jurisdictions at the tax rate,

34%, which will be applied when the Company carries 2020 losses back to previous years.

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

all has been collected as of September 30, 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. The income tax benefit also consists of a rate benefit of $2,371,000 based on the losses being

21

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 nine months ended September 30, 2020:

Weighted Average 

Number of

Grant Date

Shares

Fair Value

Unvested balance at December 31, 2019

343,919

$

9.37

Granted

287,750

4.62

Vested

(98,502)

10.37

Forfeited

(8,385)

13.72

Unvested balance at September 30, 2020

524,782

$

6.46

At September 30, 2020 and 2019, there was $1,928,000 and $2,377,000, 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 2.3 years. Total compensation cost related to restricted stock grants for the three months ended Septe mber 30,

2020 and 2019 was $319,000 and $350,000, respectively, all of which was recorded to selling, general and administrative expense.

Total compensation cost related to restricted stock grants for the nine months ended September 30, 2020 and 2019 was $968,000

and $1,121,000, respectively, all of which was recorded to selling, general and administrative expense

During the nine months ended September 30, 2020 and 2019, employees surrendered 4,574 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 nine months ended September 30, 2020 is as follows:

22

Weighted Average 

Number of

Grant Date

Shares

Fair Value

Outstanding as of December 31, 2019

222,112

$

2.57

Granted

—

—

Exercised

—

—

Forfeited

(27,266)

2.57

Outstanding at end of the period ended September 30, 2020

194,846

$

2.57

Exercisable at end of the period ended September 30, 2020

84,300

$

2.57

The average remaining contractual term for those SARs outstanding at September 30, 2020 is 3.6 years, with no aggregate

intrinsic value. At September 30, 2020 and 2019, there was $225 ,000 and $435,000, respectively, of total unrecognized

compensation expense, net of estimated forfeitures, related to SARs. Total compensation cost related to SARs for the three months

ended September 30 , 2020 and 2019 was $36,000 and $42,000, respectively, all of which was recorded to selling, general and

administrative expense. Total compensation cost related to SARs for the nine months ended September 30 , 2020 and 2019 was

$91,000 and $145,000, 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 1.6 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 September 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 September 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 September 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

23

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 September

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 interest rate swap pays a fixed rate of 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 statements impacts

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

Fair Value of Derivative Instruments

September 30, 2020

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Foreign exchange contracts

Prepaid expenses other current assets

$

—

Accrued other liabilities

$

4,000

Notional contract values

$

—

$

51,000

Interest rate swaps

Prepaid expenses other current assets

$

—

Accrued other liabilities

$

1,255,000

Notional swap values

$

—

$

27,125,000

December 31, 2019

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Foreign exchange contracts

Prepaid expenses other current assets

$

452,000

Accrued other liabilities

$

—

Notional contract values

$

15,358,000

$

—

Interest rate swaps

Prepaid expenses other current assets

$

—

Accrued other liabilities

$

706,000

Notional swap values

$

—

$

29,750,000

24

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 September 30, 2020 and 2019:

Amount of Unrealized 

Derivatives in 

Gain (Loss) Recognized 

Location of Gain (Loss) 

Amount of Realized Gain 

subtopic 815-20 

in Accumulated Other 

Reclassified from 

(Loss) Reclassified from 

Cash Flow Hedging 

Comprehensive Income (Loss) on

Accumulated Other 

Accumulated Other 

Relationship

Derivative

Comprehensive Income (Loss)

(A)

Comprehensive Income (Loss)

2020

2019

2020

2019

Foreign exchange

contracts

$

668,000

$

(192,000)

Cost of goods sold

$

(219,000)

$

55,000

Selling, general and

administrative expense

$

(33,000)

$

8,000

Interest rate swaps

$

321,000

$

(101,000)

Interest expense

$

(149,000)

$

(14,000)

(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 nine months ended September 30, 2020 and 2019:

Amount of Unrealized 

Derivatives in 

Gain (Loss) Recognized 

Location of Gain (Loss) 

Amount of Realized Gain 

subtopic 815-20 

in Accumulated Other 

Reclassified from 

or (Loss) Reclassified from 

Cash Flow Hedging 

Comprehensive Income (Loss)

on 

Accumulated Other 

Accumulated Other 

Relationship

Derivative

Comprehensive Income (Loss)

(A)

Comprehensive Income (Loss)

2020

2019

2020

2019

Foreign exchange 

contracts

$

135,000

$

649,000

Cost of goods sold

$

(525,000)

$

110,000

Selling, general and 

administrative expense

$

(67,000)

$

—

Interest rate swaps

$

(206,000)

$

(823,000)

Interest expense

$

(343,000)

$

(13,000)

(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.

25

15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents changes in Accumulated Other Comprehensive Income (Loss), net of tax, for the nine months ended

September

30, 2020 and 2019:

Accumulated 

Derivative 

Post Retirement 

Other 

Hedging 

Benefit Plan 

Comprehensive 

2019:

Activities

Items

(A)

Income (Loss)

Balance at December 31, 2018

$

(612,000)

$

2,729,000

$

2,117,000

Other comprehensive loss before 

reclassifications

(174,000)

—

(174,000)

Amounts reclassified from accumulated 

other comprehensive income (loss)

(96,000)

(284,000)

(380,000)

Income tax benefit

40,000

60,000

100,000

Balance at September 30, 2019

$

(842,000)

$

2,505,000

$

1,663,000

2020:

Balance at December 31, 2019

$

(191,000)

$

1,561,000

$

1,370,000

Other comprehensive loss before 

reclassifications

(71,000)

—

(71,000)

Amounts reclassified from accumulated 

other comprehensive income (loss)

(935,000)

(236,000)

(1,171,000)

Income tax benefit

223,000

50,000

273,000

Balance at September 30, 2020

$

(974,000)

$

1,375,000

$

401,000

(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).

16. SUBSEQUENT EVENTS

26

Credit Refinancing

On

October 27, 2020

, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National

Association, as administrative agent, lead arranger and book runner, and the lenders party thereto (the “Lenders”). Pursuant to

the terms of the Credit Agreement, the Lenders made available to the Company secured loans (the “ Wells Fargo Loans ”) in the

maximum aggregate principal amount of $

43,500,000

, consisting of (i) a revolving loan commitment of $

25,000,000

(approximately $

8,745,000

 of which was advanced to the Company on October 28, 2020) and (ii) term loan commitments of

$

18,500,000

 ($

16,790,000

 of which was advanced to the Company on October 28, 2020). Such revolving loan commitment

terminates, and all outstanding borrowings thereunder must be repaid, on

October 27, 2024

, and such term loans are to be repaid

in

monthly

 installments with the remaining outstanding balance due on

October 27, 2024

, in each case subject to certain optional

and mandatory repayment terms. The Company’s obligations under the Credit Agreement and the Loans are unconditionally

guaranteed by each of the Company’s U.S. and Canadian subsidiaries, with such obligations of the Company and such subsidiaries

being secured by a lien on substantially all of their U.S. and Canadian assets. Interest is payable monthly and is based on either

LIBOR Rate or Base Rate, as defined by the Credit Agreement, at the discretion of the Company. As of October 28, 2020, the

revolving loan was based on the

Base Rate

 resulting in a rate of

4.75

% and the term loan was based on the

LIBOR Rate

 resulting

in a rate of

3.75

%.

In connection with the funding of the Wells Fargo Loans, FGI Equipment Finance LLC advanced to the Company, pursuant to a

Master Security Agreement, dated as of

October 27, 2020

 (the “Security Agreement”), among FGI Equipment Finance LLC, the

Company as debtor, and each of Core Composites Corporation and CC HPM, S. de R.L. de C.V. as a guarantor, a term loan in

the principal amount of $

13,200,000

 (the “FGIEF Loan”), which loan is secured by certain assets of the Company and the

guarantors located in Mexico. Interest is payable

monthly

 at a fixed rate of

8.25

%.

The proceeds of the Wells Fargo Loans and the FGIEF Loans were used in part to repay all existing outstanding indebtedness of

the Company owing to KeyBank National Association, and to pay certain fees and expenses associated with the transactions

contemplated by the Credit Agreement and the Security Agreement, and will be used to finance the ongoing general corporate

needs of the Company.

Concurrent with the closing of the Credit Agreement and the Master Security Agreement, the Company settled both outstanding

interest rate swaps, which resulted in a loss and cash outflow of $

1,253,000

, recorded in interest expense and operating activities,

respectively. The Company also recorded losses of $

605,000

 from writing off outstanding deferred loan costs related to the

Amended A/R Credit Agreement.

Facility Closure

On November 5, 2020 the Company announced it will close the manufacturing facility located in Batavia, Ohio in 2021. The

Company has begun working with customers to relocate the business into other Core locations or to third parties.

 Revenue from

the facility accounts for less than

5

% of the Company's total revenues and the Company anticipates approximately half of those

revenues will transition to other Core locations. The Company anticipates shutdown costs to consist of severance cost, moving

and production testing and recertification costs and asset impairment charges. Management has determined the costs related to

the closure of the manufacturing facility located in Batavia, Ohio to be immaterial to the Company’s consolidated financial

statements.

27

Part I — Financial Information

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 char ges; 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.

28

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 nine months ended September 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

29

Company gains experience with new tools and processes. Therefore, during a new program launch period, start-up costs and

inefficiencies can affect operating results.

Nine Months Ended September

30, 2020

Product sales for the nine months ended September 30, 2020 decreased 29% compared to the same period in 2019. Operating

income increased from a loss of $7,406,000 to income of $7, 377,000 for the nine months ended September 30, 2020 compared

to the same period a year ago. 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 were the primary drivers 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.

The Company also incurred lower operating and SG&A cost s.

For the nine months ended September 30, 2020, product sales to truck customers decreased by 45% 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 47% for the nine months ended September 30,

2020 compared to the same period in 2019.

For the nine months ended September 30, 2020, the Company recorded net income of $9,032 ,000 or $1.07 per basic and diluted

share, compared with net loss of $9,761,000, or ($1.25) per basic and diluted share for the nine months ended September 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 and the tax rate change of 21% to 34% .

Looking forward, the Company anticipates lower product sales for 2020 when compared to 2019, due to the negative impact of

customer shutdowns as a result of COVID-19 and lower demand from truck customers. Based on customer forecasts, the

Company anticipates product sales demand to be down slightly for the three months ended December 31, 2020 when compared

to the same period ended December 31, 2019

Results of Operations

Three Months Ended September

30, 2020, as Compared to Three Months Ended September

30, 2019

Net sales for the three months ended September 30, 2020 and 2019 totaled $59,873,000 and $74,655,000, respectively. Included

in net sales were tooling project sales of $5,663,000 and $7,144,000 for the three months ended September 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 September 30, 2020 were $54,240,000 compared to

$67,511,000 for the same period in 2019. This decrease in sales is primarily the result of lower demand from truck and marine

customers partially offset by higher demand from customers in the construction and all-terrain vehicle market.

Gross margin was approximately 18.1 % of sales for the three months ended September 30, 2020, compared with 8.7% for the

three months ended September 30, 2019. The gross margin percentage increase was due to a favorable net change in product mix

and productivity efficiency of 11.9%, offset by an increase in sales return of 2.0% and lower leverage of fixed costs of 1.0%.

Selling, general and administrative expense (“SG&A”) was $6,517,000 for the three months ended September 30, 2020, compared

to $7,041,000 for the three months ended September 30, 2019. Decreased SG&A expenses resulted primarily from lower

professional and outside service expenses of $272,000 and travel expenses of $157,000.

The Company incurred a goodwill impairment of $4,100,000 associated with its Horizon Plastics reporting unit during the three

months ended September 30, 2019. The Company incurred lower profit margins in its Horizon Plastics reporting unit caused by

selling price decreases that the Company had not been able to fully offset with material cost reductions.

30

Interest expense totaled $966,000 for the three months ended September 30, 2020, compared to interest expense of $1,113,000

for the three months ended September 30, 2019. The decrease in interest expense was due to a lower average outstanding debt

balance, offset by higher interest rates during the three months ended September 30, 2020, when compared to the same period in

2019.

Income tax expense for the three months ended September 30, 2020 was 1.0% of income before income taxes, and income tax

for the three months ended September 30, 2019 was 6.6% of loss before income taxes. The Company’s effective tax rates reflect

the effects of taxable income and taxable losses being generated in tax jurisdictions with different tax rates. The effective tax rate

for 2020 reflects recording net operating losses in US jurisdictions at the tax rate which will be applied when the Company carries

2020 losses back to previous tax years. 

The Company recorded net income for the three months ended September 30, 2020 of $3,343,000 or $0.39 per basic and diluted

share, compared with a net loss of $6,125,000, or $0.78 per basic and diluted share, for the three months ended September 30,

2019.

Comprehensive income totaled

$3,742,000 for the three months ended September 30, 2020, compared to

comprehensive losses

of $6,462,000

for the same period ended September 30, 2019. The increase was primarily related to an increase in net income of

$9,468,000 and a change in unrealized foreign currency hedges of $ 523,000, net of tax.

Nine Months Ended September

30, 2020, as Compared to Nine Months Ended September

30, 2019

Net sales for the nine months ended September 30, 2020 and 2019 totaled $161,705,000 and $228,168,000, respectively.

Included in total sales were tooling project sales of $9,686,000 and $13,765,000 for the nine months ended September 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 nine months ended September 30, 2020 were $152,019,000

compared to $214,403,000 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. 

Gross margin was approximately 15 .2% of sales for the nine months ended September 30, 2020, compared with 7.9% for the

nine months ended September 30, 2019. The gross margin percentage increase was due to favorable net change in product mix

and manufacturing efficiency of 8.9% and a favorable net change in selling price and material costs of 1.1%, offset by lower

leverage of fixed costs of 2.1% and higher sales returns of 0.9%.

Selling, gener al and administrative expense (“SG&A”) was $17,136,000 for the nine months ended September 30, 2020,

compared to $21,431,000 for the nine months ended September 30, 2019. The decrease in SG&A expense primarily resulted from

lower professional and outside services of $1,417,000, government subsides enacted as a result of COVID-19 of $1,416,000 and

lower travel expenses of $619,000.

The Company incurred a goodwill impairment of $4,100,000 associated with its Horizon Plastics reporting unit during the nine

months ended September 30, 2019. The Company incurred lower profit margins in its Horizon Plastics reporting unit caused by

selling price decreases that the Company had not been able to fully offset with material cost reductions.

Interest expense totaled $3,338,000 for the nine months ended September 30, 2020, compared to interest expense of $2,878,000

for the nine months ended September 30, 2019. The increase in interest expense was due to higher interest rates during the nine

months ended September 30, 2020, when compared to the same period in 2019.

Income tax benefit for the nine months ended September 30, 2020 was 120.3% of the income before income taxes, and income tax

benefit for the nine months ended September 30, 2019 was 4.4% of the loss before income taxes. The Company’s effective tax

rates reflect the effects of taxable income and taxable losses being generated in tax jurisdictions with different tax rates.

31

The Company recorded a net income for the nine months ended September 30, 2020 of $9,032,000, or $1.07 per basic and diluted

share, compared with a net loss of $9.761,000 or $1.25 per basic and diluted share, for the nine months ended September 30,

2019.

Comprehensive income totaled

$8,063,000 for the nine months ended September 30, 2020, compared to

comprehensive losses

of $10,215,000

for the same period ended September 30, 2019. The increase was primarily related to higher net income of

$18,793,000 and a change in unrealized foreign currency hedges of $753,000, net of tax, for the nine months ended September

30, 2020.

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 September 30, 2020, the Company had

outstanding foreign exchange contracts with notional amounts totaling $51,000, compared to $15,358,000 outstanding as of

December 31, 2019. As of September 30, 2020, the Company also had outstanding interest rate swaps with notional amounts

totaling $27,125,000, compared to $29,750,000 outstanding as of December 31, 2019.

Cash provided by operating activities for the nine months ended September 30, 2020 totaled $31,052,000. Net income of

$9,032,000 positively impacted operating cash flows. Non-cash deductions of depreciation and amortization included in net

income amounted to $8,425,000. Changes in working capital increased cash provided by operating activities by $11,816,000,

which primarily related to changes in accounts receivable, inventory and other accrued liabilities, offset by accounts payable.

At September 30, 2020, the Company had $14,809,000 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 nine months ended September 30, 2020 was $2,716,000, which related to purchases of

property, plant and equipment. The Company anticipates spending up to $2,000,000 during the remainder of 2020 on property,

plant and equipment purchases for all of the Company's operations.

At September 30, 2020, purchase commitments for capital expenditures in progress were $338,000. 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 nine months ended September 30, 2020 totaled $15,383,000, which primarily consisted

of net revolving loan payments of $12,007,000 and net scheduled repayments of principal on outstanding term loans of

$3,391,000. The Company was able to make the repayments primarily due to the cash provided by operating activities of the

$15,399,000 for the nine months ended of September 30, 2020.

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 “ US 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 US Revolving Loans to the Company on a dollar-for-dollar basis) and term

32

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 A/R 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.

During 2019, the Company 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). On November 22, 2019, the Company and the Lenders entered into a forbearance agreement (the

"Forbearance Agreement"), which was amended twice, first on March 13, 2020 agreement (the "Amended Forbearance

Agreement") and then on May 29, 2020 (the “Second Amended Forbearance Agreement”).

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, 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.

The Company has unblocked maximum availability of $20,000,000 of variable rate revolving loans of which $0 is outstanding

as of September 30, 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 September 30, 2020

was $160,000 of which, $127,000 was classified as long term debt.

On October 27, 2020, the Company entered into the Refinancing Agreements, as defined in Note 2, “Critical Accounting Policies

and Estimates”, and repaid all of its obligations under the A/R Credit Agreement. Management believes that existing cash, cash

flow from operating activities and available borrowings under the Refinancing Agreements will be sufficient to meet the

Company’s liquidity needs for the next 12 months. Based on the Company ’s forecasts, which are based on industry analysts’

estimates of heavy and medium-duty truck production volumes, customers' forecasts, as well as other assumptions, management

believes that the Company will be able to maintain compliance with its financial covenants for the next 12 months. 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.

Off-Balance Sheet Arrangements

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

33

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 September 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 here

34

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 and Restated 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, fiberglass, and metal components for

use in production. The prices and availability of these materials are affected by the prices of crude oil, natural gas and other

feedstocks, tariffs, 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.

35

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.There were no changes in internal controls over financial reporting (as

such term is defined in Exchange Act Rule

13a-15(f)) that occurred in the last fiscal quarter that have materially affected, or are

reasonably likely to materially affect, our internal controls over financial reporting.

36

Part II — Other Information

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.

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.

Unregistered Sales of Equity Securities and Use of Proceeds

Period

Total Number of

Shares Purchased

Average Price

Paid per Share

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs

Maximum Number that

May Yet be Purchased

Under the Plans or

Programs

July 1 to 30, 2020

3,788

4.61

—

—

August 1 to 31, 2020

—

—

—

—

September 1 to 30, 2020

—

—

—

—

Defaults Upon Senior Securities

None.

37

Mine Safety Disclosures

None.

Other Information

None.

Item 6.

 Exhibits

See Index to Exhibits.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its

behalf by the undersigned thereunto duly authorized.

CORE MOLDING TECHNOLOGIES, INC.

Date:

November

6, 2020

By:

/s/ David L. Duvall

David L. Duvall

President, Chief Executive Officer, and Director

Date:

November

6, 2020

By:

/s/ John P. Zimmer

John P. Zimmer

 Executive Vice President, Secretary, Treasurer and Chief Financial Officer

39

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 Corporation

1

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, 1996

1

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)

40

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

11

Computation of Net Income per Share

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

November

6, 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

November

6, 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

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

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.