Good morning, and welcome to the Core Molding Technologies First Quarter 2022 Earnings Conference Call. Please note this event is being recorded. I’d now like to turn the conference over to Sandy Martin of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us for the Core Molding Technologies conference call to review first 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 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 Exchange Commission. Management may also refer to non-GAAP measures, including adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings release. Core Molding Technologies assumes no obligation to publicly update or revise any forward-looking statements. 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 also been included in an 8-K submitted to the SEC. And now I would like to turn the call over to the company’s CEO, Dave Duvall. Dave?

Thank you, Sandy, and good morning, everyone. Let me start today’s call by celebrating an accomplishment with our teams. We were recently notified of the Gallis Award nomination that recognizes Core Molding for ORBIS’ supplier of the month. And this is 2 months in a row. The nomination is provided by the ORBIS plant teams to companies that have stepped up to take whatever actions are necessary to support the ORBIS value proposition. This value proposition exemplifies a commitment to provide the highest level of quality, service and on-time delivery with flawless execution. We are grateful and humbled by the nominations. I am proud of our team for their commitment to excellence in the field, especially given the challenging supply chain. So during the last quarter’s call, John and I talked about implementing a much more proactive investor outreach program that started with our earnings conference call. Today, we’re expanding on that by adding a questions-and-answer session at the end of our prepared remarks. We are pleased with the reaction from new and existing investors as we continue to create more dialogue and transparency with the investment community. Additionally, we have expanded our outreach to attend additional conferences and non-deal roadshows as part of our new ongoing strategy to share our business transformation and growth story. Our EVP of Human Resources, Renee Anderson, likes to remind me that when you think you’ve communicated enough, you need to do it 10 times more. I appreciate her coaching, and I believe I’ve learned from it. This is exactly why John and I are ramping up our investor and public communications. In the past, Core Molding was a medium and heavy-duty truck company with about 91% of our revenue coming from the transportation industry. Today, transportation represents less than 40% of our revenues. This is not because we reduced our revenue on trucks, but a direct and purposeful result of our business transformation strategy to diversify our revenue into other markets that are either growing or still early in the conversion process of transitioning from traditional materials to engineering materials to obtain the benefits of lightweighting, design flexibility, strength to weight ratio, and corrosion resistance. I know we keep saying it, but we can never state it enough. The conversion from traditional materials to an engineered material is typically a significant change for our customer, which is why it is important to have a technical solution sales approach to help the customer optimize the end solution for them and their end customer. It does require more upfront work, including design, development, and simulation, but it enables customers to create unique products and solutions that by the basic design of the engineered material perform better. The bottom line is that there is always a finite number of end products that will be purchased, but there’s an almost unlimited demand for product improvements. I think it’s exciting to be in a company where we can utilize the largest portfolio of processes to optimize materials at their chemical and even molecular levels to create unique solutions that improve our infrastructure, environment, and society. This, to me, will have unlimited demand no matter what changes we see in the market or society. So back to the original question, why change in communication? We want to share our transformation with the investor community because we know it’s an exciting opportunity for growth and absolutely is a significant change in our business model. Today, I will discuss our continued progress on initiatives and touch on some highlights in our 2022 first quarter results. Then I’ll turn the call over to John to review Q1 in more detail. Lastly, I will come back to wrap up the call and discuss our efforts around the company’s important sustainability program at Core. We continue to grow our relationship with large blue-chip companies like UFP Industries in the building products industry, Navistar, PACCAR, and Volvo serving the heavy-duty truck industry. We also have secured a major market share in the marine and land powersports industry with Yamaha and BRP in North America. Revenue growth and diversification are key components of our long-term strategy. And in the first quarter of 2022, we successfully added $10 million of net new wins. These net new wins will launch between 2022 and 2024 and are incremental to the $75 million of net new wins that we achieved last year. And we are beginning to generate incremental net sales this year from those net new wins. This new business further diversifies the company’s revenue by expanding into growing markets like industrial, utilities, packaging, as well as powersports. The momentum from 2021 has carried into 2022, and we will continue to strategically diversify as we purposefully grow our business. We launched 3 new programs in the first quarter of 2022, and they are beginning to ramp up volumes. Working with our customers, we are on schedule to launch several additional programs in 2022, which were included in last year’s net new wins. Additionally, the Ford Bronco roof program, which we won in 2020, is set to ramp up production in the second quarter of this year, and we believe that demand will ramp up quickly for this product. Flawless launches of major programs require robust processes, disciplined execution, and a dedicated team. I appreciate and do not underestimate our team’s level of effort, diligence, and hard work required to bring all of these new products to life. New business wins continue to be our primary growth driver. Our opportunity pipeline is robust at over $200 million. We are now at a point that in order to continue our revenue expansion, we need to add capacity. John will discuss later the change to our capital expenditure plan and the benefits from our new wins on our revenues in the first quarter. Turning now to our financial results. Fiscal first quarter results were strong. We reported net sales of over $90 million. That’s the highest quarterly sales ever for Core Molding. We grew adjusted EBITDA dollars with a double-digit adjusted EBITDA of 10.5%, which was our stated goal. Our continued focus to offset the impact of raw material inflation that began in 2021, resulted in better overall profitability despite the dilutive impact to the gross margin percentage. We are seeing material and labor supply pressure stabilize, and customer demand continues to be strong. We recognize that the world and market continue to be challenging for all and therefore monitor daily customer demands. With that, I’ll turn the call over to John Zimmer to further discuss our financial results.

Thank you, Dave, and good morning, everyone. First quarter 2022 net sales totaled $90.6 million, up 24% versus a year ago, and product sales increased 30% versus the prior year period. Sales increases were largely driven by customer demand across all industries, new program sales, mainly from industrial and powersports customers as well as raw material recoveries. Gross profit for the quarter was $14.5 million or 16% of sales compared to $12.7 million or 17.5% of sales in the prior year first quarter. The decline in the first quarter margin percentage was primarily due to the impact of margin recoveries from higher raw material costs. Excluding this impact, first quarter 2022 gross margin would have been 17.7%, an improvement from the year-ago quarter. We have recovered a majority of the increased costs the company has incurred from the raw material inflation. However, we are still working with certain customers to obtain recovery. We expect to have all significant recovery agreements finalized by the end of the second quarter. Although we have seen improvement in supply chains, we continue to carefully monitor customer demand changes resulting from supply chain impacts. After adjusting for raw material recoveries, we were able to match profitability levels from last year’s first quarter, even with broader inflationary headwinds from other cost categories like labor, supplies, and energy. Selling, general, and administrative expenses for the quarter were $8.5 million compared to $7.4 million in the prior year period. Higher wage costs due to investment in our technical solutions and advanced manufacturing engineering teams, additional professional fees related to information technology improvements and recruiting, and higher insurance costs due to premium inflation drove the SG&A increase. We also finalized a new 4-year labor agreement in our Cobourg facility. Now all of the company’s labor agreements are finalized for 2022, which provides stability and assurance of uninterrupted supply for our customers. In the first quarter, the company reported solid operating income of $6 million, a year-over-year quarterly expansion from $5.3 million in 2021 and a sequential improvement from operating income that was $1.9 million in the fourth quarter of 2021. Fiscal 2022 first quarter net income aggregated $3.9 million or $0.46 per share compared to the 2021 first quarter net income of $3.5 million or $0.41 per share. Adjusted EBITDA for the fiscal 2022 first quarter was $9.5 million or 10.5% compared to $8.6 million for the prior year. You can find the GAAP to non-GAAP reconciliations of adjusted EBITDA financial measures at the end of today’s press release. As we discussed in our last call, our revenue diversification strategy continues to progress with product revenue for the first quarter of 2022, consisting of 39% truck, 23% powersports, 17% building products, 7% industrials and utilities, and 14% from all other categories. Turning now to the company’s financial position, cash flow and balance sheet. The company’s cash used by operating activities totaled $1.7 million for the first 3 months ended March 31, 2022, and capital expenditures for the same period were $2.5 million. The first quarter negative working capital is actually a positive signal of growth for us, with uses of cash that include higher accounts receivable and inventory, and approximately 32% increase in product revenues from the fourth quarter of 2021 drove the growth in accounts receivable. On the last call, we guided to capital spending in 2022 in the range of $14 million to $16 million, inclusive of the $2.2 million to complete the capacity expansion of the direct long fiber thermoplastic expansion in our Mexico plant. We expect this large press to be operational in the second quarter. Since then, our recent evaluation of existing plant space, coupled with the continued sales momentum in 2022, influenced us to request board approval for $5 million of additional capital spending for 2022, bringing the full year capital expenditure budget to approximately $20 million. This will allow us to maximize our current footprint and add capacity by purchasing 3 new presses, which should be revenue-generating immediately upon installation. Notably, we are also installing robotic and automated systems on 3 of our presses, which will result in higher throughputs and efficiencies with less reliance on labor. At March 31, 2022, the company had total liquidity of $20.8 million consisting of $1.3 million of cash and $19.5 million of availability under our revolving credit facility. The company had term debt of $24.2 million at year-end. As of the end of the quarter, our term debt to trailing 12-month EBITDA ratio was less than 1x adjusted EBITDA. An important metric used by our company is return on capital employed, which is a pretax return metric. For the first quarter, the return was 4.5% or approximately 18% on an annualized basis, which is in line with our long-term goal. We believe that our strong balance sheet and ample liquidity provides us with the flexibility, resiliency, and growth in 2022. Given our successful completion of our business transformation from a few years back, we remain focused on and believe in our core strengths, and strategic growth prospects in 2022 and beyond, and we remain committed to grow long-term shareholder value.

Thank you, John. As John discussed, we are pleased with our first quarter results and with customer demand that continues to expand our opportunity pipeline to over $200 million. Our company has worked hard to be a good corporate citizen that recognizes our social responsibility and commitment to our employees and the communities in which we live and work. In addition to social health, safety, and human rights policies, we are committed to environmental sustainability that focuses on the efficient use of energy and raw materials as well as waste minimization and risk prevention. Our material development team continues to research the use of organic and renewable materials. We have also appointed a dedicated leader of our sustainability efforts at Core to lead and optimize our efforts in this somewhat unclear period that all of us are experiencing. In our thermoplastics product line, we strive to use recycled material as an alternative to virgin materials, stressing our desire to convert waste into usable products. Simply stated, our goal is to exceed the needs of the present while helping to make the world a better place for the future. We also have some interesting research projects underway that I’ll discuss on future calls. One involves reversing coral reef damage in the ocean caused by linefish. Meaningful work and research is underway, so we will share more information in future quarters. We remain laser-focused on continuing to execute our long-term strategic plans, and we are well-positioned for continued growth. We are no longer a truck supplier, although we still very much appreciate our business and partnerships in the heavy truck industry. Our technical solutions sales are winning in new industries, and we continue to invest in our people, engineering capabilities, automation, and assets as we drive to improve every single day. We will also continue to invest in our ability to innovate and provide technical solutions and provide conversions that result in lighter weight, lower cost, and higher performance products for our customers. We are concentrating on new industries, especially in the industrial and utility sector as more people, and I quote this, work where they want to live in both suburban and rural settings where improved infrastructure is needed. We know that decision-makers of critical infrastructure investments will be evaluating products and processes, and our engineering materials solutions are supporting these customers by reducing the installation costs and converting traditional materials to a lighter weight, more durable composite solution. Our low-cost, lightweight, and durable substitutions with our technical solutions teams are ready for rapid deployment into new infrastructure projects. We believe the continued execution of our long-term strategic goals will position the company for further stability and profitable growth in the future. We see a bright future ahead for Core Molding Technologies, and we are excited to continue growing the company and delivering value for our shareholders and stakeholders. With that, I’d like to open the call to questions from analysts or investors. Operator?

Our first question comes from JP Geygan from Global Value Investment Corp.

Congratulations on the excellent results; it seems you’ve made significant progress over the past few years. You discussed labor, energy, and other cost pressures, but it appears that your recoveries have primarily focused on material costs. Can you provide more details on the other cost pressures you are facing? Is there an opportunity to recover any of those increases?

Yes, we mainly focus on recovering raw materials because the increases in those costs are much larger compared to other areas. Like everyone else, we are experiencing inflation in labor, energy, and natural gas prices, as well as rising supply costs and freight expenses related to delivery. While we have been working with our customers on these issues, we recognize our overhead and labor costs have also increased, and we have passed some of that through. However, we believe it is our responsibility to try to manage those costs. Our aim is not to pass all of it onto our customers, but to find ways to control expenses, seek efficiencies, and look for alternative suppliers. Minimizing costs is always our first priority. We have worked with various customers, and we have been able to pass some labor overhead costs, but material costs remain the largest part of the raw material inflation we are seeing.

Okay. That’s helpful. Obviously, supply chain issues are affecting all sorts of producers across all types of businesses. It strikes me that your customers might be more affected than your business, in particular, has been by supply chain issues. Can you provide any additional color around that and what we might expect as these issues resolve and demand begins to normalize?

Yes. We see a lot of stabilization in our supply base. We've made significant efforts to work with our suppliers and adjust our inventories and component mix. Most of the challenges are behind us. However, some larger customers are experiencing intermittent supply chain issues due to the complexity of their operations. While they may face challenges in the near future, they are eager to catch up. We're noticing strong demand and a push to meet that demand.

Got it. Turning to your capital structure. You’ve obviously made some substantial improvements over the past several quarters or years, but it strikes me that there might be room for additional improvements, or to say another way, lower your cost of capital, particularly your debt capital. Can you provide some color around how we would expect the capital structure to develop over the coming quarters?

Yes. So we are working on that right now. We started the process probably about 9 months ago of looking at how to restructure our debt. We had the third quarter, which was a little bit of a challenge. And so we kind of held off, and now that we have a good couple of quarters again behind us. We are in the final negotiations with restructuring the debt. We looked at overall lowering the cost and then being able to fix some of the costs also when we get that done. We would hope to have that done probably by the end of the second quarter, maybe the start of the third quarter at the latest, but we’re actively working on that right now.

Okay. And then finally for me, you previously stated that acquisition is likely a part of your growth strategy, particularly as you diversify into various end markets. Can you provide any sort of commentary around where you stand in evaluating potential acquisitions and what we would expect in terms of characteristics of an acquisition target?

Yes. I mean it’s absolutely part of our strategy. We know moving forward. Right now, when we’re getting $75 million in net new wins last year, $10 million already in the first quarter. Right now, our focus is on gaining the organic growth that we’re seeing out there and really installing the capacity and locations in our plants that are already set up for those machines being the least expensive option for growing the business. Acquisitions we see as something a little further out when we’re looking at where we need to install capacity and then adding to our overall strategy and value proposition, whether that’s either different processes, technologies, or knowledge to help us with the technical solutions sales. Right now, we have a lot of opportunities that we’re acting on today.

Yes, makes sense. All right. That’s it for me. I appreciate the additional color, and congratulations again.

The next question comes from Justyn Putnam from the Talanta Investment Group.

My question is, as you look out over the next several years to continue with this transition in the business. How much of an anomaly is the current level of capital expenditures you’re expecting for this year?

Again, Justyn, I think the way we look at it is, I don’t think it’s an anomaly. I think where we would be looking at it is our maintenance CapEx is usually going to be somewhere around probably 3% of sales. We’ll flex those up and flex those down as needed. So as we grow the company, if we can get to our targets of continuing to grow the revenue, there is going to be the maintenance CapEx that we’ll continue to grow kind of in line with revenues. As Dave mentioned, and I mentioned in mine, I think we’ve kind of always put out there that a couple of years ago, we were at $200 million, $210 million. We kind of last year hit $307 million, just to $90 million a quarter. And what we’re seeing is to really go to that next level, we are going to strategically have to add capacity, primarily presses, maybe some brick-and-mortar at some point as we kind of grow the facility. So I would see that CapEx only be needed as we grow the company. As we go to that next level of revenues, $400 million and above, I think we would continue to add capacity strategically in order to continue to grow the company. So I don’t know that I’d call it abnormal, but I would call it part of the growth strategy of us getting to that next level. We are going to definitely have to add presses and automation as we move forward.

The next question comes from Chip Moore from EF Hutton.

I want to follow up there, I guess, on investing to meet the strong organic demand, just the 3 new presses that you’re investing in sort of timeline there, how do we think about that? And then can you delve a little bit deeper into the automation efforts? I think you said it was on 3 presses; what that will give you in terms of throughput and cost and potential maybe to roll out more automation throughout the business?

Yes. The three new presses will be installed this year. One of them is already operational, and we are relocating that one and automating it. The other two presses, which were not in operation, are being refurbished and will be set up at existing locations. It's exciting to implement full automation, which will fully automate the loading and unloading on the presses. There are challenges in hiring direct labor in certain regions of the U.S., but the focus is on improving throughput, speed, and maximizing the use of our assets at the presses.

Got it. And maybe one more, just on the opportunity pipeline. I think you mentioned it's greater than $200 million; you've mentioned that before. Should we consider that as having a similar mix to the current business in terms of end market? Or does it lean towards a certain area and provide more diversification, perhaps in industrial utility, for instance?

Yes. If I were to assess it as a percentage of current sales compared to future sales, it would certainly favor the strategic direction since it is more focused on the front end of the strategy and serves as a leading indicator. We are observing stronger activity in sectors where we are intentionally targeting business, such as industrial utilities and agriculture. So we are seeing significant growth in that area.

There are no more questions in the queue. This concludes our question-and-answer session. I’d like to turn the conference back over to Dave Duvall for any closing remarks.

I’d like to thank everyone, and thank you for your continued interest in our company. We look forward to providing an update on our progress when we report our second quarter results in August. Thank you very much from the entire team.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.