Core Molding Technologies Inc

Good morning, everyone. Welcome to the Core Molding Technologies second quarter fiscal 2022 financial results conference call. As a reminder, this conference call is being recorded. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Now, I will turn the call over to Sandy Martin, three-part advisors. to provide introductions and read the Safe Harbor Statements. Please go ahead.

Thank you and good morning, everyone. We appreciate you joining us for the Core Molding Technologies Conference Call to review second quarter results for 2022. Joining me on the call today are Core Molding's President and CEO, Dave Duvall, and the company's EVP and CFO, John Zimmer. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section at coremt.com. Today's call, including the Q&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 by their nature are uncertain and outside of the company's control. Actual results may differ materially from those expressed or implied. Please refer to the earnings press release that was issued today 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 publicly update or revise any forward-looking statements. Management may also refer to non-GAAP measures, including adjusted EBITDA, free cash flow, return on capital employed, and adjusted gross margin. Reconciliations to the nearest gap measures can be found at the end of our earnings release. Finally, the earnings press release we issued earlier today is posted on the investor relations section of our website at coremt.com. A copy of the release has been included in an 8K submitted to the SEC. And now, I would like to turn the call over to Dave Duvall. Dave?

Thank you, Sandy, and good morning, everyone. Before I get into the quarterly progress, I'd like to start by congratulating our Executive Vice President of Human Resources, Renee Anderson. Renee was selected as a 2022 HR Impact Award honoree this year. If you remember, this award is presented to human resources professionals each year that exemplify excellence and leadership at their company, as well as doing important work in the field of HR and communities where they live and work. Renee absolutely embodies excellence, integrity, and HR leadership at Core Molding, and she has positively impacted the customers and communities that we serve. Renee and the HR team are a critical component of our success and our overall business strategy. Having an open, engaging, and rewarding work environment is foundational to any business strategy, and we're fortunate that Renee is a part of our leadership team and she is an asset to the organization. I would like to start with some very recent good news. Last week, we came to an agreement with Volvo to extend our current supply agreement through 2027. With this extension, we were able to modify terms that provide the company with a recovery of raw material costs. This agreement also provides our valuable partner with uninterrupted service for more than five years. We're excited to continue our relationship with Volvo Last quarter, John and I spoke to you about our IR strategy that we implemented earlier this year and described how we have prioritized a proactive investor outreach process. We're pleased with the reaction from the buy side and sell side on our journey to increase awareness of the core molding story. We continue to believe that our stock is under followed and we are continually working to create transparency and awareness of our company. Now, Turning to our continued progress, I will open up by discussing our major initiatives and touch on some highlights in our 2022 second quarter results. Then I'll turn the call over to John to review Q2 in more detail. Lastly, I will come back to wrap up the call and discuss our continued efforts around the company's sustainability programs and provide some market outlook. Historically, core molding was synonymous with the heavy truck OEM industry. In 1996, we acquired Columbus Plastics, which was a division of Navistar International. So it was natural for legacy stakeholders to think of us as a truck company, citing that more than 90% of our revenues originated from the heavy duty transportation industry. However, in 2015, we began transforming the business through strategic acquisitions that added thermoplastic presses and specialized material compositions. Then in 2019, we underwent a major company-wide operational turnaround project. Most recently in 2020, we introduced two important teams, our technical solution sales team and our materials R&D to create engineering materials that support customers by solving challenges and creating new products. Instead of referring to ourselves as a composite company, we began building an innovative business around engineered materials. This deliberate sequence that includes our turnaround program, transformational and diversification plans, coupled with the launch of the technical solution sales and material R&D teams over the past several years brings us to 2022. And today, our medium and heavy duty truck business represents 39% of our product revenues, well below the 90% of truck business from just a few years back. We did not deliberately reduce our truck revenues. Instead, we strategically grew into other industries and businesses by partnering with customers and developing new, specially formulated engineered products that are either a unique solution or much improved conversion from traditional materials like concrete or metal. In many cases, we take multiple components and redesign them into a single molded piece that is lighter weight, stronger, corrosive resistant, and requires less labor during assembly for the customer. We are skilled at providing the upfront work, including design development simulation, which enables customers to create unique products and solutions that by their basic design perform better and last longer. The outcome is an infinite market for product improvements, especially important now when costs are rising and businesses, as well as the public sector, need better margins and simpler supply chains. This differentiation opens up new markets and creates new demand which is what we are experiencing with the continued momentum in our business. Profitable growth and diversification will continue to be the cornerstones of our business model and long-term strategy. And in the first half of 2022, we have successfully added $16 million of net new wins. These net new wins will launch between 2022 and 2024 and are incremental to the $75 million of wins we achieved last year. This incremental business further diversifies the company's revenues by expanding into growing markets like last-mile delivery transportation, utilities, construction, agricultural, and power sports. A number of our current customer partners are seeing the strength of our model and are engaging us to partner with them on the other products, thereby increasing our wallet share. Personal watercrafts and all-terrain vehicles are a great example of this. We have significant market share in the personal watercraft industry, but some of these companies also sell golf carts, all-terrain vehicles, or light utility vehicles, and we are partnering with those teams to look at other engineering material applications. We believe this larger category of utility and sport vehicles provides additional tailwinds related to our power sports category. This is just one example of our significant wallet share expansion possibilities. Coming off of back-to-back record revenue quarters, we are encouraged by business demand for 2022 and 2023. The demand environment allows us to be more selective about the new business that we accept. We will continue to look for ways to diversify revenues and produce high value products, generating better margins. We are ramping up major programs with certain customers and have full production launch in Q3 of the Ford Bronco roof and our automotive category. Launches of major programs, along with serving production requirements of existing commitments, requires proven processes, adequate capacity, and a dedicated team in each of the plants. Bringing all these new products to life requires stable, reliable systems that are capable of handling changes in customer demand while delivering operational improvements. We are working daily on all of this. New business wins continue to be our primary growth driver. Our current opportunity pipeline continues to be robust at over $115 million. If you remember from last time, this was significantly higher, but the pipeline is lower than reported in the first quarter as we rationalized opportunities based on capacity constraints and eliminated lower value-add opportunities and projects that require capacity sooner than what we can deliver. We are now to a point that in order to continue our revenue expansion, We are increasing capacity with the installation of three new presses and automation in our existing facilities. We first want to maximize capacity within our existing six plants before adding another location. Turning now to a few of our financial highlights on top of our highest quarterly sales reported for core molding last quarter, we topped the number for the second quarter with over $98 million in revenue. In Q2, we continued to focus on offsetting raw material and other manufacturing cost inflation and are always looking for ways to improve efficiencies in our plants. In the second quarter, we saw some inefficiencies driven by high customer demand and disruption in order fulfillment due to customer supply chain challenges. We are actively working with our customers to manage demand and improve our production efficiencies. Our material and labor supply pressures have stabilized but are still a challenge at times, so we are monitoring this carefully. The important takeaway is that the demand environment continues to be strong. With that, I will turn the call over to John to give further details on our overall financial results.