CORE MOLDING TECHNOLOGIES INC (CMT) Business

ITEM 1. BUSINESS

DESCRIPTION OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.

Core Molding Technologies, Inc. (the "Company") and its subsidiaries operate in the engineered materials market as one operating segment as a molder of thermoplastic and thermoset structural products. The Company produces and sells molded products for varied markets, including medium and heavy-duty trucks, power sports, building products and other industrial markets. Core Molding Technologies has its headquarters in Columbus, Ohio, and operates six production facilities in the United States, Canada and Mexico.

In general, the Company achieves product growth and diversification in several different ways, including: (1) resourcing of existing structural products from another supplier by an original equipment manufacturer (“OEM”); (2) obtaining new structural products through a selection process in which an OEM solicits bids; (3) successful marketing of structural products for previously non-structural applications; (4) successful marketing of structural products to OEMs outside of our traditional markets; (5) developing of new materials, technology and processes to meet current or prospective customer requirements; (6) converting alternative materials to engineered materials; (7) expanding its business through the direct sale of engineered materials, including Sheet Molding Compound ("SMC"); and (8) acquiring an existing business. The Company's efforts continue to be directed towards all seven of those identified areas.

PRODUCTS

Structural plastics compete largely against metals and have the strength to function well during prolonged use. Management believes that structural plastic components offer many advantages over metals, including:

•heat resistance;

•corrosion resistance;

•lighter weight;

•lower cost;

•greater flexibility in product design;

•part consolidation for multiple piece assemblies;

•lower initial tooling costs for lower volume applications;

•high strength-to-weight ratio; and

•dent-resistance in comparison to steel or aluminum.

Our manufacturing facilities utilize various production processes; however, end products are similar and are not unique to a facility or customer base.

Sheet Molding Compound (“SMC”)

SMC is primarily a combination of resins, fiberglass, fillers, and catalysts compounded and cured in sheet form, which is then used to manufacture compression-molded products, as discussed below. The Company incorporates a sophisticated computer program in the process of compounding various complex SMC formulations tailored to meet customer needs. The program provides for the control of information during various production processes and data for statistical batch controls.

Molded Products

The Company manufactures structural products using compression molding (54 presses), resin transfer molding (4 presses), and injection molding processes (24 presses). As of December 31, 2025, the Company owned 82 molding presses including 18 in its Columbus, Ohio facility; 25 in its Matamoros, Mexico facility; 18 in its Cobourg, Canada facility; 10 in its Gaffney, South Carolina facility; 5 in its Winona, Minnesota facility; and 6 in its Monterrey, Mexico facility. The Company's molding presses range in size from 250 to 5,500 tons.

SMC compression molding is a process whereby SMC is molded to form by matched die steel molds through which a combination of heat and pressure are applied via a molding press. Outer components and high strength reinforcing components are fabricated with this process. Visually appealing components are produced with vacuum assisted molding and through utilizing in-mold coating (IMC). IMC can provide an additional benefit of conductivity assisting in the process of post paint application along with reducing porosity and improving surface appearance. This thermoset process produces high quality, dimensionally consistent products and is typically used for high volume products.

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Direct Long Fiber Thermoplastic (“DLFT”) compression molding employs two molds, typically a core and a cavity, similar to matched die SMC molding. This is a process for compounding and molding thermoplastic materials with "long" fibers (typically, 0.5 inch or longer). Engineered thermoplastic pellets and performance additives are compounded in a screw extruder, to which chopped reinforcements (typically, glass fibers) are added and further extruded. A "charge" of material is cut to a precise weight, and this "charge" is directly moved to a compression or injection transfer process, where it is molded into a finished part. The process allows for direct processing of the compounded material, bypassing the expense and delay of producing an intermediate product (pellets or sheets) as is used in other fiber-reinforced thermoplastic molding processes. The D-LFT process is an attractive option for products that have highly complex geometry, require high strength and stiffness, and benefit from the recyclability of a thermoplastic resin.

Vacuum resin transfer compression molding (“RTM”) process employs two mold halves, typically a core and a cavity, similar to matched die molding. The composite is produced by placing glass mat, chopped strand, or continuous strand fiberglass in the mold cavity in the desired pattern. Parts used for cosmetic purposes typically have a gel coat applied to the mold surface. The core mold is then fitted to the cavity, and upon a satisfactory seal, a vacuum is applied. When the proper vacuum is achieved, the resin is injected into the mold to fill the part. Finally, the part is allowed to cure and is then removed from the mold and trimmed to shape. Fiberglass reinforced products produced from the RTM process exhibit a high-quality surface on both sides of the part and excellent part thickness. The multiple insert tooling technique can be utilized in the RTM process to improve throughput based upon volume requirements.

Structural Foam and Web Injection Molding (“SIM”) are low-pressure injection molding processes that develop high-strength, rigid parts at low weight. This is accomplished by mixing a foaming agent (usually nitrogen gas) with the melted polymer (structural foam process), or by injecting nitrogen gas into the mold cavity immediately after the plastic resin is injected (structural web molding). Structural foam produces a cellular interior structure that can provide twice the rigidity of a solid plastic molding. The structural web process pushes the plastic out to the mold cavity walls, uniformly packing out the entire mold and hollowing out thicker sections to create products of varying wall thicknesses. As a result, structural web molded parts have a smoother, glossier finish than other low-pressure parts. Both processes give part designers flexibility when designing products that need strength and stiffness at low weight and also have the benefit of recyclability due to the use of a thermoplastic resin.

Reaction Injection Molding (“RIM”) is a process whereby a composite is produced through the injection of a two- component thermoset resin system utilizing dicyclopentadiene (“DCPD”) technology. DCPD technology involves injecting a liquid compound into matched die aluminum molds to form the part. In this process the mold is prepared, closed and the liquid compound is injected into the tool then cured. Additional finishing is required when the part is designated for top coat painting. The RIM process is an alternative to other closed mold processes for mid-volume parts that require a high level of impact resistance.

Hand Lay-Up is a process that utilizes a shell mold, typically the cavity, where glass cloth, either chopped strand or continuous strand glass mat, is introduced into the cavity. Resin is then applied to the cloth and rolled out to achieve a uniform wet-out from the glass and to remove any trapped air. The part is then allowed to cure and is removed from the mold. After removal, the part typically undergoes trimming to achieve the shape desired. Parts used for cosmetic purposes typically have a gel coat applied to the mold surface prior to the lay-up to improve the surface quality of the finished part. Parts produced from this process have a smooth outer surface and an unfinished or rough interior surface. These fiberglass-reinforced products are typically non-cosmetic components or structural reinforcements that are sold externally or used internally as components of larger assemblies.

Spray-Up is a process that utilizes the same type of shell mold as hand-lay-up, but instead of using glass cloth to produce the composite part, a chopper/spray system is employed. Glass rovings and resin feed the chopper/spray gun. The resin coated, chopped glass is sprayed into the mold to the desired thickness. The resin coated glass in the mold is then rolled out to ensure complete wet-out and to remove any trapped air. The part is then allowed to cure, is removed from the mold, and is then trimmed to the desired shape. Parts used for cosmetic purposes typically have a gel coat applied to the mold surface prior to the resin-coated glass being sprayed into the mold to improve the surface quality of the finished part. Parts produced from this process have a smooth outer surface and an unfinished or rough interior surface.

Assembly, Machining, and Paint Products

Many of the products molded by the Company are assembled, machined, and prime painted or topcoat painted to result in a finished product used by the Company's customers.

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The Company has demonstrated manufacturing flexibility that accommodates a range of low volume hand assembly and machining work, to high volume, highly automated assembly and machining systems. Robotics are used as deemed productive for material handling, machining, and adhesive applications. In addition to conventional machining methods, water-jet cutting technology is also used where appropriate. The Company also utilizes paint booths and batch ovens in its facilities. The Company generally contracts with outside providers for higher volume programs that require top coat paint.

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT

Capital expenditures totaled approximately $17.3 million, $11.5 million, and $9.1 million in 2025, 2024, and 2023, respectively. These capital expenditures primarily consisted of building and equipment improvements and additional production equipment to manufacture parts.

The Company continuously engages in product development. Research and development activities focus on developing new material formulations, new structural composite products, new production capabilities and processes, and improving existing products and manufacturing processes. The Company does not maintain a separate research and development organization or facility, but uses its production equipment, as necessary, to support these efforts and cooperates with its customers and its suppliers in research and development efforts. Likewise, manpower to direct and advance research and development is integrated with the existing manufacturing, engineering, production, and quality organizations. Management has estimated that costs related to research and development were approximately $1.4 million, $1.9 million and $1.7 million in 2025, 2024, and 2023, respectively.

MAJOR CUSTOMERS

The Company had five major customers during the years ended December 31, 2025, 2024, and 2023, BRP, Inc. ("BRP"), International Motors, LLC ("International"), PACCAR, Inc. ("PACCAR"), Volvo Group North America, LLC ("Volvo") and Yamaha Motor Corporation ("Yamaha"). 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 presented. The loss of a significant portion of sales to these customers could have a material adverse effect on the business of the Company. The following table presents sales to major customers as a percent of total sales for the years ended December 31:

BRP provides a portfolio of industry-leading products comprising of snowmobiles, watercraft, on and off-road vehicles, power sports propulsion systems as well as engines for karts, motorcycles and recreational aircraft. Yamaha offers a diverse portfolio of products, including motorcycles, watercraft, outboard motors, ATVs, side-by-side vehicles, musical instruments, and audio solutions, all designed to deliver exceptional performance and innovation across land, water, and sound. Demand for these products is driven by consumer demand and general economic conditions.

The North American truck market in which International, Volvo, and PACCAR compete is highly competitive and the demand for medium and heavy-duty trucks is subject to considerable volatility as it moves in response to cycles in the overall business environment and is particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled. Truck demand also depends on general economic conditions and changes to emission regulations, among other factors.

OTHER CUSTOMERS

The Company also produces products for other customers and industries, including medium and heavy-duty trucks, power sports, building products, industrial and utilities and other commercial markets. Sales to these customers individually were all less than 10% of total sales for interim and annual reporting during 2025, 2024, and 2023.

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GEOGRAPHIC INFORMATION

Substantially all of the Company's products are sold in U.S. dollars. The following table provides information related to the Company's sales by country, based on the ship to location of customers' production facilities, for the years ended December 31 (in thousands):

SEASONALITY & BUSINESS CYCLE

The Company's business is affected annually by the production schedules of its customers. Certain of the Company's customers typically shut down their operations on an annual basis for a period of one to several weeks during the Company's third quarter. Certain customers also typically shut down their operations during the last week of December. As a result, demand for the Company's products typically decreases during the third and fourth quarters. Demand for medium and heavy-duty trucks, power sports, automotive, and commercial products also fluctuates on an economic, cyclical and seasonal basis, causing a corresponding fluctuation for demand of the Company's products.

MAJOR COMPETITORS

The Company believes that it is one of the largest compounders and molders of thermoset and thermoplastic structural products in North America. The Company faces competition from a number of other molders including, most significantly, Molded Fiber Glass Companies, CSP, Ashley Industrial Molding, René Matériaux Composite Ltée ("RMC"), STS Group, and 20/20 Custom Molded Plastics.

RAW MATERIALS

The principal raw materials used in the Company's processes are unsaturated polyester, vinyl ester, polyethylene, polypropylene, and dicyclopentadiene resins, fiberglass, and various filler's. Other significant raw materials include adhesives for assembly of molded components, in-mold coating, gel-coat, prime paint for preparation of cosmetic surfaces, and hardware (primarily metal components). Many of the raw materials used by the Company are petrochemical-based, natural gas-based, as well as downstream derivatives, and therefore, the costs of certain raw materials can be affected by changes in costs in these upstream commodities. Due to fluctuating commodity prices, suppliers are typically reluctant to enter into agreements that maintain pricing over the term of the agreement. The Company generally has supplier alternatives for each raw material, and regularly evaluates its supply base to improve its overall purchasing position.

Normally we do not carry inventories of raw materials or finished products in excess of what is reasonably required to meet production and shipping schedules, and to manage risk of supply and variation in demand.

CAPACITY CONSTRAINTS

Capacity utilization is measured based on standard cycle times and a standard work week, which can range from five days per week, three-shifts per day to seven days per week, 24x7 operation, depending on the facility and molding process. During times when demand exceeds the standard five day, three -shift capacity, the Company will work weekends to create additional capacity, which can provide capacity utilization percentages greater than 100%. During 2025, the Company has used various methods from overtime to weekend manpower crews to support the customers' production requirements.

The Company measures facility capacity in terms of its large compression molding presses (2,000 tons or greater). The Company owned 25 large compression molding presses at its facilities at December 31, 2025. The capacity utilization in these production facilities was 50% and 73% for the years ended December 31, 2025 and 2024, respectively.

The Company measures facility capacity in terms of its large injection molding presses (750 tons or greater). The Company owned 12 large injection molding presses at its facilities at December 31, 2025. The capacity utilization in these production facilities was 46% and 52% for the years ended December 31, 2025 and 2024, respectively.

BACKLOG

The Company relies on production schedules provided by its customers to plan and implement production. These schedules are normally provided on a weekly basis and typically considered firm for approximately four weeks. Some customers update these schedules daily for changes in demand, allowing them to run their inventories on a “just-in-time” basis. The

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ordered backlog of four weeks of expected shipments was approximately $16.8 million, 100% of which the Company shipped during the first month of 2026, and $19.1 million at December 31, 2025 and 2024, respectively.

HUMAN CAPITAL MANAGEMENT

As of December 31, 2025, the Company employed a total of 1,239 employees, which consisted of 339 employees in the United States, 727 employees in Mexico and 173 employees in Canada. The salary workforce consisted of 307 employees, while 932 employees were hourly. Four plant locations making up 65.8% of the workforce are covered by collective bargaining agreements.

Details on the collective bargaining agreements are as follows:

To support the Company’s long-term strategic plan, the Company is committed to being an employer of choice focusing on providing a safe place to work, organizational development opportunities, talent planning and a competitive total rewards package.

Safety – The safety of the Company's workforce is a top priority with continued improvement in the Company's safety record. The Company utilizes behavior-based safety programs at all global facilities as a proactive method of increasing safe behaviors.

Organizational Development – The Company provides learning and development opportunities across the workforce, including structured leadership development programs designed to support front-line leaders, emerging leaders, and high-potential employees identified through succession and talent planning processes. These development programs reinforce the Company’s core values, strengthen leadership capability, and support long-term succession planning with individual professional growth.

Talent Planning – The Company maintains people management processes designed to attract, develop, and retain a high-performing workforce. Performance management practices align individual objectives with organizational strategic goals and support employee development.

The Company conducts periodic employee engagement surveys along with an online platform to administer ongoing anonymous surveys. These tools provide timely insights that inform action planning, strengthen communication and leadership effectiveness, and support a culture of continuous improvement and employee engagement.

Total Rewards – Our total rewards package supports an environment where employees want to stay and build their career. We provide fair and competitive compensation and benefits that promote physical, emotional and financial well-being. With a focus on the employee experience, our workplace fosters employee engagement, productivity and morale while encouraging effort, creativity and innovation.

ENVIRONMENTAL, CLIMATE RELATED REGULATIONS AND COMPLIANCE

The Company's manufacturing operations are subject to federal, state, and local environmental laws and regulations, which impose limitations on the discharge of hazardous and non-hazardous pollutants into the air and waterways. The Company has established and implemented standards for the treatment, storage, and disposal of hazardous waste. Our policy is to conduct our business with due regard for the preservation and protection of the environment. Our environmental waste management process involves the regular auditing of hazardous waste accumulation points, hazardous waste activities, authorized treatment, and storage and disposal facilities. We believe that our operations are in substantial compliance with all material environmental laws and regulations applicable to our plants and operations. Historically, our annual costs of achieving and maintaining compliance with environmental laws and regulations have not been material to our financial results. However, new requirements, more stringent application of existing requirements or the discovery of previously

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unknown environmental conditions could result in material environmental related expenditures in the future. See below under "Item 1A Risk Factors - Legal, Insurance, Tax and Cybersecurity Risks - Changes in legal, regulatory, and social responses to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability."

The Company has Environmental Management Systems at all of its facilities and has obtained ISO 14001 certification at all facilities. As part of the Company's environmental policy, all manufacturing employees are trained on waste management and other environmental issues. The Company's full Board provides oversight of the Company's environmental and climate matters through an Enterprise Risk Management system and quarterly reporting process.

The Company holds various environmental operating permits for its production facilities in the U.S., Mexico, and Canada as required by U.S., Mexican and Canadian federal, state and local regulations. The Company has substantially complied with all requirements of these operating permits.

The Company produces structural parts that are long-lived assets and generally not considered single source plastics. As such, the Company is not currently subject to any resin plastic taxes or single-use plastic regulations.

PATENTS, TRADE NAMES, AND TRADEMARKS

The Company will evaluate, apply for, and maintain patents, trade names, and trademarks where it believes that such patents, trade names, and trademarks are reasonably required to protect its rights in its products. However, the Company does not believe that any single patent, trade name, or trademark or related group of such rights is materially important to its business or its ability to compete.

AVAILABLE INFORMATION

We maintain a website at www.coremt.com. Annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, all amendments to those reports, and other information about us are available free of charge through this website as soon as reasonably practicable after the reports are electronically filed with the SEC. These materials are also available from the SEC’s website at www.sec.gov.