Core Molding Narrows 2026 Gross-Margin Outlook to 16-17%

The Tip Desk · November 3, 2026 · 3 min read

Production revenue rose 19.7% to $64.8 million in the fiscal third quarter as truck demand recovered and tooling project sales reached $25.4 million.

Core Molding Technologies (CMT), an engineered materials company that molds structural products for trucks, powersports, building products and utilities, reported production revenue of $64.8 million for the three months ended September 30, 2026, up 19.7% from a year earlier after a 1.2% year-over-year decline in the prior quarter.

The company said the rebound was driven mainly by higher demand from medium- and heavy-duty truck and new program launches. Medium- and heavy-duty truck production revenue recovered to $28.2 million from $19.5 million a year earlier. Building products rose to $6.9 million from $5.9 million, and industrial and utilities to $7.1 million from $5.9 million. Power sports declined to $13.6 million from $17.5 million. All other production revenue was $9.1 million.

Tooling project revenue, which the company described as project-based work ahead of a customer production cycle, jumped to $25.4 million from $4.3 million a year earlier. Total net revenue increased 54.4% to $90.2 million. Chief Financial Officer Alex Panda said tooling accounted for a larger portion of sales, which affects reported margins in the short term but creates recurring demand.

Gross margin compressed to $13.4 million, or 14.8% of net revenues, from 17.4% a year earlier. Panda said gross margin would have been approximately 18.6% excluding tooling mix and Monterrey commissioning charges. The company also said this year’s margins were pressured by higher raw material input costs, offset by favorable fixed operating leverage, operating efficiencies and product mix.

Operating income fell to $1.6 million, or 1.8% of net revenues, from $2.6 million, or 4.4%, a year earlier. Third-quarter selling, general and administrative expenses of $11.8 million included $1.8 million of non-recurring costs associated with the Mexico expansion and footprint optimization. Net income declined to $1.5 million, or $0.17 a share, from $1.9 million, or $0.22 a share. Adjusted net income was $2.9 million, up from $2.1 million; adjusted net income per diluted share was $0.33, up from $0.24. Adjusted EBITDA held at $6.4 million but fell to 7.1% of net revenues from 11.0%.

President and Chief Executive Officer Eric Palomaki said the quarter absorbed one-time start-up costs associated with the Mexico expansion, footprint optimization and higher external input costs. Monterrey is now operational, and two 4,500-ton presses in Matamoros are on track to come online by year-end. The company spent about $0.8 million to establish a hood and battery-systems center of excellence in Gaffney, South Carolina.

Consistent with its September Investor Day outlook, Core Molding continues to expect full-year net sales to be flat to up approximately 5%. It narrowed its full-year gross-margin outlook to 16% to 17% from the 17% to 19% range given with second-quarter results.

So far this year the company said it has secured approximately $30 million in new business awards and sees a path to approximately $50 million through six late-stage projects, including a significant award for battery energy storage systems.

Cash and cash equivalents were $5.4 million at September 30, 2026, down from $38.1 million at year-end 2025, with $4.8 million drawn on the revolving credit facility after a July 2026 amendment that refinanced the term loan and established $100 million of facilities. Capital expenditures for the first nine months were $19.7 million, including $12.2 million for the Mexico expansion. For the full year the company expects capital spending of approximately $28 million to $30 million, including about $20 million for Mexico.