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Core Molding Technologies (NYSEMKT:CMT) released 2Q 2007 results on 8/9/07.

Press release highlights:

  • Sales to $38.3 million from $39.5 million in 2Q 2006
  • Product sales down 36% to $24.69 million from $38.43 million in 2Q 2006
  • Total sales stayed fairly even because of increase in tooling revenue to $13.61 million from $1.09 million
  • Cost of sales $33.7 million from $31.66 million in 2Q 2006
  • Net income down to $1.26 million ($0.12 per share) from $2.5 million ($.24 per share) in 2Q 2006
  • Profit margin 3.3% from 6.3% in 2Q 2006
  • TTM EPS $0.65 per share
  • Diluted share count 10,618,000
  • Cash flow from operating activities $2.91 million from $3.82 million in 2Q 2006
  • Cash flow from investing activities -$1.07 million from -$3.27 million in 2Q 2006
  • Cash flow from financing activities -$484K from -$790K in 2Q 2006
  • $17.5 million in cash
  • $6.85 million in long-term debt
  • Inventory $19.68 million
  • (Press release highlights:

  • Sales to $38.3 million from $39.5 million in 2Q 2006
  • Product sales down 36% to $24.69 million from $38.43 million in 2Q 2006
  • Total sales stayed fairly even because of increase in tooling revenue to $13.61 million from $1.09 million
  • Cost of sales $33.7 million from $31.66 million in 2Q 2006
  • Net income down to $1.26 million ($0.12 per share) from $2.5 million ($.24 per share) in 2Q 2006
  • Profit margin 3.3% from 6.3% in 2Q 2006
  • TTM EPS $0.65 per share
  • Diluted share count 10,618,000
  • Cash flow from operating activities $2.91 million from $3.82 million in 2Q 2006
  • Cash flow from investing activities -$1.07 million from -$3.27 million in 2Q 2006
  • Cash flow from financing activities -$484K from -$790K in 2Q 2006
  • $17.5 million in cash
  • $6.85 million in long-term debt
  • Inventory $19.68 million
  • (SEC 10-Q)

    I must say that management is handling this tough stretch quite well considering the industry situation. The business is still managing to bring in positive cash flow, they're still able to reinvest some money into the business without relying on financing activities, the balance sheet remains healthy and actually improving, and costs are being kept under control. This is not a dumb management team, but the thing that I worry about with CMT is the fact that trucking is losing some ground in the U.S. to railroads. I'm sure trucks will have a place here for awhile, the question is how consistent and how profitable of an industry it will be. Even with this in mind, I'm still finding CMT an attractive long-term investment. You rarely find a management team this connected to shareholders and the business and with such a knowledge of the industry and company. Not to mention that this is a micro-cap stock. I'm thinking that with this smart management team CMT will be able to expand for a good amount of time and start making some deals with other manufacturers. Management has weathered this storm so well to date, and you can't ignore the fact of how well the business was doing prior to this year.

    I don't have much to say about this quarter's results. It seems that management is saying industry projections are a pick-up of sales in 2008. I can see that happening, and if that's true then picking up some of CMT here wouldn't be a terrible idea. I'm still believing that trucking will be facing a lot of pressure both from high costs and railroads. If oil prices fall back down like they did last fall it'd really help the industry get through this difficult time. Whether or not I'll be able to open a position in CMT anytime soon is a hard thing to answer, all I know is that this is an excellent management team with a company that definitely still has a future. Remember that they still are partnered up with fine businesses like Paccar and International, so CMT is pretty safe for the time being if their major customers can get it together this coming year. My guess is that they will. Plus, CMT will be going up an easy year next year; it probably won't be too hard to beat what they've done this year.

    Currently the stock is at $7.00, a P/E of 10.77.

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    Disclosure: none

    Source: Core Molding Technologies: 2Q Earnings Review