Core Molding Technologies reports third quarter 2025 growth, driven by PowerSports recovery and $250 million sales pipeline

OPERATOR - (00:00:04)

Good morning everyone. Welcome to the core Molding Technologies Third Quarter 2025 Financial Results Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, Please press star 0 on your telephone keypad. As a reminder, this conference call is being recorded. I will turn the call over to Sandy Martin, Three Part Advisors. Please go ahead. Thank you and good morning everyone. We appreciate your joining us for the Core Molding Technologies Conference call to review our third quarter 2025 results. Joining me on the call today are the Company's President and CEO Dave Duvall, as well as COO Eric Halemake and CFO Alex Panda. This call is being webcast and can be accessed through coremt.com via an audio link on the Investor Relations Events and Presentations page. Today's conference call, including the Q and A session will be recorded. Please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance are forward looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform act of 1995. Forward looking statements are uncertain and outside the Company's control. Actual results may differ materially from those expressed or implied. Please refer to today's earnings release for our disclosures on forward looking statements. These factors and other risks and uncertainties are described in detail in the Company's filings with the securities and Exchange Commission. Core Molding Technologies assumes no obligation to update or revise any forward looking statements publicly. Management will refer to non GAAP measures including adjusted eps, adjusted ebitda, the debt to trailing twelve months, EBITDA ratio, free cash flow and return on capital employed reconciliations to the nearest GAAP measure are available at the end of our earnings release. Our earnings release has been submitted to the SEC on Form 8K and now we'd like to turn the call over to the Company's President and CEO Dave Duvall.

Dave Duvall - President and CEO - (00:02:40)

Thank you Sandy and thank you all for joining us today. The positive momentum we've highlighted last quarter has continued to build and remains firmly in place. The only change from our Q2 update relates to the timing of our tooling revenue which has shifted into the fourth quarter. As a reminder, tooling is an inter process involving fabrication, testing and ultimately customer final sign off, making it inherently challenging to predict the exact timing of revenue recognition with the vendored trucking industry. Several projects remain on hold pending greater clarity around the administration's policy direction. That said, we have continued to make significant progress this year and this quarter across our next largest verticals. During the third quarter, sales in our PowerSports building products and industrial and utilities markets grew year over year reflecting the continued traction of our invest for growth initiatives and the gradual improvement in market conditions. Powersports, a major sales category for Core, achieved its first year over year growth in eight quarters, marking a return to growth after two full years of declines. We believe this momentum is being fueled by a combination of new product introductions and our continual wallet share growth. As an example, we are now in full production for the UTV Skid plates. In the third quarter, we successfully launched the UTV Skid plate program we've discussed on prior calls. We're seeing signs of recovery in demand for powersports, helped by expectations for continued lower interest rates and new launches. That combination is creating a more active demand environment across both water and land powersports as we head into 2026. Regarding the skid plate program specifically, we expect it to generate approximately 8 million in annual run rate revenue once fully ramped. While this category remains somewhat seasonal, we believe Powersports is positioned for a stronger rebound in 2026, particularly in a more favorable interest rate environment following recent cuts and new program launches. Last quarter we highlighted 46.7 million in new business wins this year, 99% of which is incremental. This builds on the 45 million in wins from last year. We are pleased with the momentum and excited about our known future growth and continue to see additional opportunities for and a robust sales pipeline of over $250 million. But we know we still have many opportunities to leverage the execution improvements we have made and therefore we are continuing to invest and aggressively refine our sales systems. This has always been the last phase of the core molding transformation and it is our current must win battle as we drive to leverage all the business execution improvements and unlock the earnings potential of our improved capabilities to accelerate growth. Further, we have implemented a value selling program and we're adding three new business development roles that are focused on and incentivized to expand.