Core Molding Technologies (CMT) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw $17M in new business wins, strong execution on growth strategy, and best gross margin in over a decade, despite a 4.7% sales decline due to truck market weakness, partially offset by robust Powersports and new product category growth.

• Leadership transition underway, with COO role split and Erik Palomaki becoming CEO; succession plan costs impacted results.

• Mexico expansion progressing ahead of schedule, with major investments and facility consolidation expected by end of Q2.

• Business development pipeline exceeds $220M, targeting $50M in new program awards for 2026 and a long-term revenue goal of $500M.

• Powersports market delivered 46% year-over-year revenue growth, marking the third consecutive quarter of growth.

Financial highlights

• Q1 revenues were $58.6M, down 4.7% year-over-year, mainly due to truck cycle dynamics; product sales were $57.5M, tooling sales $1.1M.

• Gross margin reached 20.4% ($12M), up from 19.2% year-over-year and 15.2% sequentially.

• Operating income was $764K (1.3% margin), down from $2.8M, reflecting higher SG&A from Mexico expansion and succession costs.

• Net income was $605K ($0.07 per diluted share), down from $2.2M ($0.25 per share); adjusted net income was $3.2M ($0.37 per share).

• Adjusted EBITDA was $7.3M (12.5% of sales), up from $7.2M (11.7%) year-over-year.

• Operating cash flow was negative $9.2M, with capital expenditures of $3.8M and negative free cash flow of $13M, in line with investment plans.

Outlook and guidance

• Full-year 2026 sales expected to be flat to up 5%, with tooling revenue weighted to Q4 and truck market recovery anticipated in H2.

• Gross margin guidance reaffirmed at 17%-19% for the year.

• Capital expenditures for 2026 projected at $25M-$30M, with $18M-$20M for Mexico growth.

• Anticipates $3M in one-time Mexico expansion costs and $2M in succession plan costs, mainly in H1 2026.

• Expecting $50M in new program awards in 2026 and long-term revenue target of $500M.