Capital Markets Day Transcript - CMT 2026-09-29

Sandy Martin, Head of Investor Relations

okay welcome today to our 2026 first ever investor day and plant tour at our matamores facility in mexico we've got a lot of great products as you can see around the room that depict what we do we've got a lot of great materials to go over today i want to give you a quick run of the show when i step away we're going to play a quick video that'll give you some nice background on some of the stuff that we're doing and then i'm going to turn it over to eric palamaki to run through a presentation our presentation today will be broken into two parts we'll have a break in the middle at the end we'll have a long Q&A session followed by dinner and networking in the back of this room right outside the room is restrooms if you need those on the far left over here there's snacks drinks and anything you need if you got to get up and go out for the room for anything you know help yourself no worries also on the table in front of you is the internet information. If anybody needs the internet, welcome to do that. We don't have plugs on the tables, but if you need to charge something, we can make some room outside for you as well. With that, let's get started. First and foremost, everybody's seen a safe harbor statement, which you see up on the screen in front of me. Everybody's read one of these, so I don't plan to read that, but please know that we will make forward-looking statements in today's presentation. Now to the best part, our speakers. Most of you in this room and most of you on the webcast have had plenty of opportunities to speak with our president and CEO, Eric Palamacki, and our chief financial officer, Alex Panda. And while you're going to get a chance to speak with them more and hear from them more today, you're also going to get a chance to hear from some of the other leaders in our organization. You're going to get to hear from people like Alec Bantz, who's our chief commercial officer, Stephanie Pulliam, who's our executive vice president of human resources, Mike Gayford, who was just announced Monday as our chief operating officer, and Arnold Alanis, Alanis, I'm sorry, who's our executive vice president and operations of our Mexico facility. With that, I'm going to get our video started, and then I'm going to turn things over to Eric. Thank you.

Speaker 17

Over the past several years, CORE has built a stronger company. We've improved execution. We strengthened our customer relationships. We invested in our people. manufacturing network, and commercial capabilities. Now, Core is entering its next phase. We are taking a proven operating platform into larger opportunities, deeper customer relationships, and more diversified markets. Our objective is not growth for growth's sake. It is profitable growth that expands margins, generates cash, and earns attractive returns on capital. This is why CORE, and this is why now.

Marshall Starr, Other

CORE's vision is providing engineered solutions to our customers.

Speaker 17

Technology creates capability. People turn capabilities into results. Across CORE, our teams work across materials, engineering, manufacturing, quality, and operations to solve customer problems and execute complex programs.

Chris Jansen, Other

We work together as one team. We have a core culture that we all are transcribing to and we're all practicing.

Speaker 17

That collaboration allows knowledge developed in one facility to strengthen the entire network. It helps CORE launch programs, respond to challenges, and deliver with the consistency our customers expect.

Rob Anderson, Other

The key is really bringing the talents together and aligning them on a common goal.

Speaker 17

At CORE, culture is not separate from execution. It is what makes repeatable execution possible. And the opportunity ahead is broad. CORE is positioned to grow across five key markets. Markets where our capabilities can solve real-world challenges and where demand continues to create new opportunities. Transportation has been part of CORE's heritage for decades. Today, we're taking that expertise into the next generation of transportation applications, delivering large, complex composite components engineered for performance, efficiency, and durability. We're also building on our strength in power sports. From components for side-by-side vehicles to personal watercraft, CORE's specialized molding technologies allow us to produce complex parts at scale.

Alex Bantz, Other

At CORE, we have multiple processes so we can choose the right solution that best fits the application.

Speaker 17

The opportunity extends beyond our traditional vehicle markets. CORE supports the infrastructure behind the changing world, from utility applications to components supporting data centers, power generation, and other critical infrastructure. In building products, our capabilities support applications that become part of the places where people live and work and in construction and agriculture we're producing components built to perform in some of the most demanding environments from equipment components to tractor cab roofs core is helping customers turn complex designs into products ready for the real world our 2030 objectives are about more than just scale we are building towards a company with more than 500 million dollars in revenue stronger margins greater cash generation and higher returns on capital employed. The path includes organic growth, deeper customer relationships, market diversification, disciplined investment, and strategic acquisitions when they improve the quality of the business. Every major use of capital must support long-term shareholder value. That opportunity is supported by a footprint built around our customers and our capabilities. Across our footprint, And each core facility brings a unique strength to the network. In Columbus, our world headquarters and center of excellence for SMC compound production, we make the material that feeds multiple facilities across the network. So SMC and the SMC production we have here really is the heartbeat of core molding. In Gaffney, we bring decades of experience in heavy truck hoods together with growing capabilities in battery enclosures and other industrial applications. In Winona, specialized DLFT technology and deep composite expertise create another differentiated capability within the core network.

Chris Jansen, Other

Being the pioneer of the DLFT process in particular, we have many many years of experience.

Speaker 17

In Coburg, our low pressure injection molding capabilities allow us to produce large complex structural foam parts for markets including power sports, building products, and utilities. And in Mexico, we're continuing to expand capacity, capabilities, and talent to support new programs and future growth. Matamoros alone spans more than half a million square feet and brings together advanced manufacturing processes across three business units. Monterey has specialized power sports and DCP capabilities with approximately 70,000 square feet available to support future opportunities.

Arnold Alanis, Other

We believe the best process is one that is safe, stable, and repeatable.

Speaker 17

CORE has the markets. We have the technology. We have the operational teams to run our facilities effectively. And we have the people. Now, we're putting those pieces together for our next phase of growth. We're investing in capacity. We're expanding our capabilities. We're strengthening our teams. And we're creating the flexibility to respond when our customers bring us their next challenge.

Marshall Starr, Other

Every day, we focus on making things better from a structural perspective.

Speaker 17

Because that's what CORE does best. We don't just manufacture parts. We engineer solutions. We solve problems. And we build the capabilities to do more of it. CORE has spent years building the foundation, a disciplined operating system, a specialized manufacturing network, trusted customer relationships, and a team capable of solving difficult problems. Now, we are putting that foundation to work. We are expanding where we have an advantage. We are investing where we can earn attractive returns. And we are pushing growth that strengthens margins, cash flow, diversification, and long-term shareholder value.

Rob Anderson, Other

I just can't wait for the next problem to solve for our customers.

Speaker 17

The opportunity is visible. The strategy is clear. The team is ready. CORE is built for what's next.

Dave Duvall, CEO

Welcome to Investor Day 2026. Pleased to have all of you joining us in person, as well as on the webcast. And thanks to some of our suppliers and banking partners also for being here today. We're glad to have everybody. Today's important milestone for us. This is our 30-year anniversary as CORE Molding Technologies. and the journey we want to talk to you about is the next chapter of CORE. We're not here to tell you the turnaround story, but we're here to demonstrate how the turnaround that we've had over prior years is turning into a platform for growth. Over the last several years, we've rebuilt our operating foundation, strengthened leadership, and improved execution, and invested in our capacity. Our objective today is simple, to show investors why CORE is positioned to create substantial long-term shareholder value. Each member of our leadership team today will help you connect our strategy, our operations, and our people associated with our capital allocation and how we work together to drive profitable revenue. The message today is why CORE and why now? We'll have a time at the end for questions, so please feel free to jot those down. We've got a lot of material to cover. I know you were going to want to ask questions, but we'll have plenty of time to do that at the end today. so why now investors if you remember anything today let it be these five things growth is visible and it's tangible not just through a promise but through actual customers with actual products that we've won and they're in the process of launching our operating transformation has already produced measurable results you can see it in the pnl and the gross margin scale matters as revenue grows our quality of earnings will benefit from those economies of scale And the capital decisions here at CORE are made through a rigorous and disciplined process associated with a return on capital employee calculation. Our goal is to build trust, do what we said we're going to do, which we think we've done the last few years, and continue to do that over the next few years as we say what we're going to do and then we execute and do what we said we were going to do. So why invest in CORE? We combine a lot of characteristics that are difficult to find. CORE molding technology ranges from thermoplastic to thermoset. We do have 45 years of award-winning manufacturing experience and we operate in attractive markets with high barriers of entry. Many of our products end up being sole-sourced with core molding. There's only one set of tools and we make and manufacture those parts for our customers. And those customers, we have decade-long relationships. They're large successful blue-chip companies and we work with them well over many decades and will continue to for many decades to come. Our large and ultra-large molding capabilities are difficult and expensive to replicate. When you all get the chance to tour our facility in Matamoros and see the size and scale of a five-story tall press and what it takes to make that installation, you'll really appreciate the barrier of entry that it takes to build some of these parts that you see behind me on the stage. We've proven that we have disciplined process for capital allocation, and most importantly, I'll remind you again, we've seen the growth. We've already seen wins, and you can see it in that gross margin line as well. As we think about the transformation journey, it's important to reflect back on the past, a few years, and what we call our must-win battles. You'll hear all of the leaders today tell you about a particular must-win battle as they go through, but from the highlights, back in 2019 and 2020, we called that the turnaround. We focused on stabilization, leadership, our customers, fixing equipment, and liquidity challenges. We built foundational systems, things like leadership development, diversification, and operating discipline systems, our manufacturing processes. All of those combined together today apply to Must Win Battle of Invest for Growth and our 2026 Must Win Battle, which is our investments in our Mexico facilities. That's the expansion of our Monterey facility from a 50,000 square foot operation to a 200,000 square foot operation, as well as an added square footage and 4,500 ton presses in our Matamoros facility to support sleeper roofs. When we think about performance, we always try to measure it on what are those key performance metrics that we want to measure. One of my favorite quotes from Dr. Deming, in God we trust, all others bring data. A few of those data points that I'd like to share from the last five years, internal promotion rate in 2020 was 10%. Last year, 48%. So almost every other person that we promoted inside of the company came from inside. For you guys in person you're looking at an entire group of them standing in front of you. This entire group was part of an internal succession over many years of development, executive coaching, internal training classes and so on. That exists down through our organization as well. It's not just what you see here today.

Speaker 17

In purchasing savings we weren't tracking in 2020.

Dave Duvall, CEO

Last year we tracked three million dollars of savings on annualized direct material purchases or in some cases one-time capital purchases but we track all of them and we support teams when they win in those negotiations. Our training hours were relatively not tracked in 2020. Last year we tracked over 20,000 development hours through salaried hourly positions on our shop floors with our leaders of various levels. We're investing back in our people and you should see that from our team today. Our variable margins sometimes range wildly quarter to quarter. For those that remember our variable margin or our margin would vary based on mix, based on what certain markets were doing, and those were in the 20 to 24 percent range. Last year we averaged about 30, and it was consistent quarter over quarter in that 30 percent range, and that's continued into the first two quarters of 2026. Our scrap varied widely from three to six percent back in 2020. Last year we averaged under two percent for the entire year. Sometimes in some of our plants, which we'll show you a picture, have even gotten under one percent. and finally and certainly not least our safety performance score we were at a 4.01 serious injury incident rate so those are recordable rates in 2020 last year about a 75 reduction down to 1.07 that is one of the reasons why our employees stay with core is because they're part of the solution to drive safety improvements and all these other improvements there's one thing I've learned in 25 years of manufacturing there's always another problem coming around the corner Whether it's a new launch, a new project, a new tariff, doesn't matter what it is, there's always going to be a challenge. It's the ability to understand the data, solve that problem, and then measure the effectiveness of our solution. Did we get it fixed or not? And sort of reiterate and solve those problems. That is what it means to be good in manufacturing. And when we're good, and when we solve those problems or have those successes, we believe in celebrating them. Because we believe winning is contagious. whether it's in the upper left-hand corner you see mr panda and his corporate controller andrew leskowitz getting a cake over when they did the refinancing the refinancing this year so will save us over 900 000 over the next five years a significant accomplishment that those two helped us lead and you can even see on teams mr gayford and mr annalees holding their cupcakes because we planned in advance so they could have cake too on that on that day thank you tammy In the upper right hand corner, the first time Matamoros hit under 1% scrap, Arnold and I cooked, helped cook, we didn't cook them all, helped cook 750 steaks. We put a hurtin' on the steak industry here in the Brownsville Matamoros region that week. Or in the lower right hand corner, that was our ribbon cutting earlier this year in Monterey. Instead of standing on a stage and cutting the ribbon, we stood with the people on the shop floor with our entire team and made them part of the celebration of the opening of the plan, because we believe winning is important and it's contagious throughout the organization. This is certainly a key slide to make sure you understand. Diversification is part of our strategy, for sure, but this presentation, it does admit and show the decline in revenue through a difficult truck cycle over the last few years. Despite that reduction, you can see that margins have improved from the 8% range to 11% range despite decreasing revenue. We improve pricing, productivity, cost structure, and our execution through this time period. As that volume returns, we expect those benefits and operating leverage to further improve the quality of our earnings. We've become a stronger company because of this cycle, and as the cycle recovers, you'll be able to see it. When we think about our future, we think about diversification. It's been part of our history and our legacy already. diversification from 15 years ago was heavily dependent on the truck and transportation industry 91 truck in 2025 that percentage dropped to 44 with power sports making up an additional 27 so 75 of core is in truck and power sports when you hear us talk today about diversified sales that means a win outside of truck or power sports we're still happy to win truck and power sports programs but we're focused on winning things outside of truck and power sports This will reduce our diversification risk, reduce the cyclicality, and so far over the last two years, 65% of our new wins have been in those diversified categories. Ultimately, it lowers our concentration risk, both by any single one customer or any single one market, which we believe will enhance the quality of our earnings, making core molding technologies a more resilient and engineered solutions business. What are we uniquely good at? Every great company wants to understand and be clear at what it does best. We borrowed this concept from one of my favorite books. Jim Collins, in 2001, wrote a book called Good to Great. Some of you may have read it, and this is called The Hedgehog Concept. What can you be the best in the world at? What are you passionate about? And what drives your economic engine? Here at CORE, we know the answers to all three of those things. We're passionate about culture as a competitive advantage, taking care of our people, and making CORE a great place to work. We know what we can do the best in the world at. It's large and ultra-large molding and it's manufacturing processes that are uniquely challenging in some way. And we know what drives our economic engine. All of you that are going to visit Matamoros will get to see it tomorrow. It's Mexico truck production, it's power sports, and it's unique solutions like SMC compounds, battery boxes like you see in the back corner, our lattice production, various small components. That is what makes up CORE. And if we apply those decisions to our everyday making processes, it'll allow us to continue to move from good to great. And that brings us to the strategy house. What is our long-term strategy and how we align it to the entire company? We share this with everybody in the entire company. It's posted in every plant. Everybody understands it. And at the top is our vision to be the most reliable, innovative, and responsive partner in engineering material and manufacturing solutions. at the bottom is the foundation our core values to be a learning organization with the courage to challenge through mutual respect and transparency and through the middle are the five pillars in priority order culture has a competitive advantage we want to be accountable to results never to be a victim but to deliver on results that is what makes a culture and makes it a competitive advantage the second pillar is operational excellence we're still a manufacturing company We're not working on AI large language models, we're a manufacturing company. We've got to be good at scrap, we've got to be good at problem solving, and take a data driven approach that is absolutely core to our competence. And the last three are really all related to growth. Grow wallet share means being first in our customers' minds, it's working with customers that we already have today to help solve problems and expand those. It's to solve problems for our customers, we've got to listen so that we can provide the how for the what of our customers. And the final pillar, industry diversification, where when we're focused on organic growth and new wins, we'd love those to be diversified new customers. Also when we take an inorganic approach, and Mr. Pando will give you more details, we're also looking for industry diversification when we look at an acquisition. And anybody can have a strategy, but the strategy is only good if you can execute it. that's the most important part of any strategy and so this is how we bring our strategy to life we start with the strategy house we convert it into a five-year plan with detailed walk of exactly the things that we think we can do have already done or are planning to do make sure that it meets our objectives and goals and then we convert it into a policy deployment matrix that policy deployment matrix has all the annual initiatives for the entire business and is reviewed with every employee at every location. This keeps everybody on the same page and engages them on an annual process, which they can take through the red, what we call the red thread. Understand the challenge in the project, make sure it's part of their annual goals and objectives, that each person understands how it relates to them. And then we go through a process of reiterating that through weekly reviews, monthly operations process to make sure that we are successful in accomplishing all of the annual objectives that we set out every year. And then we repeat this process year after year, continuing to iterate to achieve those five-year objectives. And addressable market is a question I often get from the investment communities and investor conversations. It's very difficult for us to talk about that with CORE because the opportunities are in any market. It is a huge opportunity. It could be the chairs and tables you guys are sitting at today. It could be any one of these large parts that you see behind me from the power sports and But it could be in almost any market. the size of that market could be in the billions, but the composite industry is where we live and grow every day. Seven to eight percent CAGR if you were to search the internet and look at why are composites growing. The reason composites have continued to grow over many years globally is because of the conversion of wood, concrete, and metals into a composite. You're changing the technology and moving to a composite. Our traditional truck and power sports, we continue to win we've worked with many of these customers for decades we understand where our investments are and why those are strategic and valuable to our customers like the ones that we're doing in mexico today and those will help us continue to win in the truck and power sports business and some of the new areas we're focused is utilities and building products we've been successful on burial vaults and flush covers like the ones you see in the back corner over there those are kind of flush covers that we make we've been working with electrical enclosure boxes as well as grid hardening batteries like the large white battery box you see against the wall. That's a battery for on a bus but a very similar size that goes on an industrial that does grid hardening where they're installing batteries to help support peak loads of grid demand for electrical usage. It doesn't matter the industry but if we can associate a composite part, large effectively molded part in the composites industry where we can solve problems for our customer, those are the best projects for core molding. And why composites, these are some of the reasons why the world changes those traditional materials over to composites. We don't want people to come to CORE to buy composites. We want them to come buy solutions, solutions to a problem that they have. Whether it's helping them reduce weight, improve durability, or lower a total lifecycle cost, we want to help solve that problem. And we'll create opportunities through part consolidation. Sometimes metal parts, there are rivets, welds, additional features. If we can mold that all into one part, we can material savings or labor savings to our customer. The more complex those problems become, the more attractive they are to us and this is a benefit for CORE. When you apply them to CORE and some of the products that we have today in that large and ultra-large format solution, this is what this is what they look like. In the truck market it could be hoods, school bus hoods, root sleeper roofs or air deflectors like the one you see behind me. It can take a bird hit at 75 miles an hour. No problem. If it's power sports, it could be the skid plates that we have an underbody protection that we launched last year. A great new product. Or the cargo boxes that we have for UTVs like you see in the back. Imagine the people that takes and the assets it takes to make a part that big in a one-piece molding. That's what makes Core unique and that's why we own a large percentage of the cargo box UTV market because they're very difficult large parts to make or if it's a power sport for water like the personal watercraft hull and mid deck you see to my right those are those are great products and we're in 85 to 87 percent of the personal water crafts in the world because of our ability to make those in single pieces in building products you've surely seen them around a deck or patio either at your house or somebody else's or you walked on a dock this summer that was made out of a composite or i promise you every one of you has opened an SMC door and never even realized that it was a composite door that you opened in or out of a house, residence, or condo. In the utility space, you've been on a rail line and seen a trough beside it. We're making composite troughs. If you've seen anybody installing a parking lot in a commercial residence space, they can't run water off and so they have to collect the storm water under the parking lot so it doesn't run off into creeks and streams. That's what those green chambers are for underneath the parking lot to store water. Again, won't corrode, won't rust, it's not wood, it won't rot, and it's significantly lighter and cheaper than concrete. And on the last process, everybody that's coming to Matamoros, you'll get to see one of my favorite processes, building a 12-foot industrial fan blade, hollow composite fan blade, 12 feet long in one piece. No bond joints, no assembly, a single part, a truly awesome engineering process. And how do those apply to some of the recent new wins? the the automotive part you see in the upper left is the inner bed sides tailgate and d panels a great process for us in the electric vehicle space in a heavily utilized cargo facility takes quite a beating with throwing things in and out of the back of a truck or construction vehicles like the lift you see there where the customer wants a composite side pod painted in color and we've added top coat paint capability to both our matamaris and monterey facilities to be able to serve the construction and agricultural market. The medical bed application on the upper right replaces stamped steel and powder coated panels. You get a molded part with hinges, with handles, with guides, excuse me, everything you want on the part already molded in saving that customer a significant total assembly cost. They've already awarded two programs to us because of the success of the first one. And the battery enclosure shown on the lower left is a battery that can be hot swapped on the top of a bus so you never have downtime for charging and that's similar to the part we have here in the in the room today we solve problems to be able to drop that battery from the top of the bus onto the ground without failure our top coat paint that i mentioned as well as our smc compounding that we have in columbus ohio is another key area that we've been able to win grow new additional business and in the lower right hand corner. For those of you that were on the tour today or got here early enough Monday to see a Starship launch out of Starbase here in Brownsville, Texas carrying a few satellites into orbit this week in the last 24 hours, those satellites need to talk to a base station. Shown there is the base stations that communicate with satellites and it will look small on the page but that part in the lower right hand corner is two meters across. It's over six feet across and provides the chassis for all the hardware and all the assembly for that unit and they'll be launching in December this year in Matamoros. So let me summarize. Why CORE? Because we've proven our operating transformation. Why now? Because growth is becoming visible. We have strengthened the foundation, diversified the business, and built an execution culture. Most importantly, we've positioned ourselves to capitalize on large market opportunities. Next, Alex Bantz will show you how we're converting these capabilities into measurable commercial growths. Thank you. Alex?

Alex Bantz, Other

All right. Thanks, Eric. Good afternoon, everyone. My name is Alex Bantz. I'm the Chief Commercial Officer for Core Molding. I've been with the company not quite two years now. I joined in November of 24, so coming up on my two-year anniversary. Because I'm the newest member of the group up here, I'll spend just a few minutes talking about my background, just so you get a flavor of who I am. My background is actually in engineering, so my degree and my education is in engineering. And I started as an engineer, and as fast as I could, I went over to the commercial side. So it's apparently in my blood. I started in procurement, Then I went to sales and then I did product management, marketing, and then into sales leadership and management. Most of my career has been in that commercial space, but all of my career has been in manufacturing. That's what I know. That's what I love. I still get a kick almost on a daily basis when I get to see parts that I've been intimately involved with out in the world. So I've had the pleasure of working with some great customers and great companies, and I get to see my parts out there almost every day. So that's still a rush to me. I know it's kind of silly. And ultimately, my engineering background really does help me to understand our customers and deal with the highly technical products that we sell at my previous customer or previous employers, employees, and here at Core Molding. So, I was hired here to accelerate growth, so that's what we're going to talk about today. So, in that growth conversation, we'll talk about where we've been and how we've significantly transformed our commercial organization, both the structure and the processes. We'll talk about the successes that we've achieved along that path over the first 18 months, record level of incremental platform awards, and then also we'll talk about where we're going and how we are excited about how much tremendous runway of growth we have in the markets that we're focused on. So starting with people, when I first came in, again, November of 24, one of the first things I noticed when I started thinking about how we can accelerate growth, I noticed that the structure of our group was really hindering our ability to grow. And what I mean was that the structure, we had key account managers, and account managers were completely responsible for the entire process of customer relationships. So they were getting pulled into quality issues, payment issues, pricing, delivery, everything, and then also growth at the end of it. And it was that growth at the end of it was really the issue. They weren't able to focus as much as we wanted them to on pure growth. They're getting pulled in multiple directions and really detracting from our ability to grow. So what we did is we created a dedicated growth team so all day every day they wake up they think about growing the business and hopefully they think about that until they go to bed and whether that's with our current customers or new customers at the same time we also created a team dedicated to maximizing the customer experience so what they do is focus on those day-to-day issues so that the other team can really focus on that growth and the customer experience team really enables growth two ways they allow that that focus to happen in the growth team but also they increase the customer satisfaction to facilitate growth with our current customers which is vital to our growth path and through specialization and adding resources we've tripled our bandwidth for growth activities and we've doubled our bandwidth for increasing that customer experience and both groups are really benefiting from that efficiency of focus another thing I noticed when I started and and really just observing the team in general a couple things I noticed that we were really just churning quotes. So we really focused on quantity and speed of quotes coming in and getting them out, which is fine, but we weren't really focusing enough on the strategy of how to win those opportunities. We were treating a $5 million opportunity the same way we would treat a half million dollar opportunity. And also our key account managers on our team were taking more of a passive approach to finding new opportunities. So in conjunction with the structure changes, we implemented some new processes to further increase the effectivity of both teams. And here's a highlight of some of those. For the growth team, which we call our business development team, we created a ranking system to help us identify and prioritize the best opportunities where we have the best chance to win. We trained on and implemented value selling methodologies into our sales process to identify and solve the root issues of each opportunity, what the customer really needs when they're asking us to quote on something. We're driving a how-to-win approach through the mentality, through the entire sales process, and asking those questions immediately when we find out what is the competition, how can we beat them, how can we outmaneuver them, what are their strengths, What are their weaknesses? What are our strengths? How do we win this business? We want to treat every opportunity as a battle against our competitors. And then more so this year, we're focusing on proactively identifying new opportunities in our focus markets that I'll get into here in a little bit and Eric already touched on. So instead of taking that passive approach, now we're getting proactive and really taking it to the market. On the customer experience side, really the initial focus was on maximizing our scorecards. So we have blue chip, really sophisticated customers that have pretty intense scorecards. That's how they evaluate how we operate on a daily basis. So this team is now going to be able to make sure that their judgment of us is in alignment how we think of ourselves. And then once we get that alignment, how do we maximize those scores so that when a new opportunity comes around, we are in the best position possible to win it. And in addition to that, we're also aligning with the plants and the operations team with our customers to make sure that throughout the entire order process we're in alignment on minimum order quantities lead times everything to make their job easier and our job easier and advocating for our customers when it's appropriate but more importantly advocating for our facilities and our plants to our customers when appropriate and ultimately protecting our current business and enabling that growth team to go out and grow with our current customers so that all sounds great but does it really actually mean growth right so is it working and I might be a little biased but I would say yes I think it is it is working so 2025 63 million dollars in annual incremental revenue that's a that's a record so we asked all our long-term serving employees and some of our board members no one can remember a year of more growth than we experienced last year and we're following that up with this year 26 million in the first half and great momentum going into the second half. So that's nearly 90 million dollars of growth annually in the first 18 months of the new system. But it's not just the numbers that are exciting, it's also the diversity that you see within the numbers when you really dig down. And those numbers are, that diversity is by market. You can see here different markets we're serving, where we're winning, by customer. It's not like we're going out and winning one or two huge opportunities. We've got 30 different opportunities, discrete projects that we're working on, and that's really helping us diversify our customer base, our process, and our markets. And Eric already mentioned 65% of those wins are in diversified markets beyond truck and power sports. So that's going towards our goal of diversifying the business. We want to grow truck, we want to grow power sports, but we want to grow everything faster, and we're doing that. And then when you look at the minimum amount of revenue over the lifespan of these projects, and we took a pretty conservative look at this, when you add that together we estimate 400 million dollars of total revenue that we want in these 18 months so very exciting stuff so where are we at today uh so what you're seeing is a snapshot of our current pipeline um this is a snapshot in time this is probably done in late july after we close second quarter and you can see a lot of numbers here but i'll just i'll focus on a few and the one that really jumps out i should probably put it in bold 1.4 billion dollars of total revenue over the lifespan of these projects that we have in our funnel currently today. Transformational growth opportunity for us. We've got nearly $150 million of opportunities annually that is prospecting. So that's what we call stage zero. This is the initiative that we've really implemented this year where our guys are going out and finding opportunities, not waiting for them to come to us. And then we've got $210 million annual incremental revenue that we're actually quoting right now, whether it's quoting, negotiating, or waiting for an award. And that $210 over the lifespan, that's where we're getting that $1.4 billion. And we're not even taking into account the $150 million because we're not sure what those lifespans are. And then more exciting is when you look at our previous win rate over the last 18 months that we've experienced and you apply it to these numbers, that gets you $83 million of annual incremental revenue. I'm not saying we're going to get that, but if history were to hold, that's where we would be. So that's very exciting. So all these numbers point to me that we have a very robust pipeline, but how do we keep it that way? And how do we actually make it even more robust, even bigger? So that's how we're going to focus on these five markets that we kind of teased in the video. Eric kind of mentioned them a little bit already, but we'll dig a little bit deeper into each one of these. The truck market is always going to be our, I won't say always, but it's traditionally been our biggest market and will be for the foreseeable future this is the market that we were born out of this is our heritage when we were spun off from international truck 30 years ago we were like eric said even 20 years ago we were 90 truck that's our that's our heritage and will continue to be our heritage but we still have significant room for growth that's the exciting part we are a very known player in this space and and we have a lot of room to grow so the traditional applications are sleeper roofs. So at some point, hopefully we'll go outside and we'll see some trucks that we've parked outside. Those are the sleeper roofs that we have a pretty dominant position with in North America. We've got hoods, like the part over to my right. And then we've got wind deflectors, air deflectors, like Eric already mentioned, can survive a 70 mile. I don't know that. So I learned thing is that you know there's there's a handful of major players in north america we are engaged and selling to every one of them and we have really good relationships and we're winning with most of them so being that truck is our largest market it stands to reason that it is the biggest portion of the awards that we've won last year or the last 18 months and also our current pipeline so that's to be expected but in this space again we are very established market leader there's only handful of companies in the world that can do what we do um and we have over 30 years of experience very very well established and hopefully you're getting a a sense for um looking at the parts behind us looking at the video and those of you that are going to go to the uh plant tomorrow these are complex parts and assemblies very few people can do this in the world and we are one of our customers are always are also recognizing and awarding us for the operational excellence improvements that we've done in the previous years that is a big part of why i'm here is because we earn the right to grow through those those initiatives of operational excellence so going forward how are we going to attack this market our inside sales team working alongside with the operations team will will ensure that we are keeping our customers happy and so that we will continue to be on that short list of every opportunity that comes for hoods and roofs in the foreseeable future. And we also will ride the wave. So we're in a trough right now, but we are forecasting, everyone's forecasting a significant growth in the market in the coming years, just the market cycle. Alex Panda, we'll talk a little bit about that here in a little bit. And then also we are working very diligently and hard to go beyond the hoods and roofs that everyone knows us for. There's lots of opportunities beyond those, whether it's inside the cab for or more traditional thermoplastic parts, but also outside the cab. A great example is the traction plates, whether it's on the steps or in the back near the fifth wheel, those are traditionally aluminum and aluminum is getting very expensive right now. So it's a great opportunity for us to go in there with a great solution for plastics and displace that. Our next biggest market currently is power sports. So this would include side-by-side vehicles, personal watercraft golf carts it's not on here but ATVs would also fall fall into that category we Eric already mentioned we have very dominant positions with the cargo boxes and the boat boat hulls that you see here today not only thermoplastic but also thermoset we're not showing that today but that's another one that we have a good position with but we do have additional opportunities in the golf cart space we've talked to those guys we've had good conversations and we're going to keep at it we think there's tremendous opportunity for us in the golf cart space which it continues to be a very booming industry with the the wave of retirements going on in addition to our market leading positions in the cargo boxes and hulls we bring some pretty unique technologies to the to this market eric already mentioned the patent pending skid plate technology that we already have placed in one customer and we are working very hard to get that to be the the standard across the entire industry in the coming years but also in addition to protecting those positions we're really targeting growth in golf carts and winning with other customers that we don't we have some connection with but don't really serve too much than that like honda and kawasaki so beyond our core markets of truck and power sports the utilities and infrastructure market is probably the most exciting space for us to grow in my opinion. When we think of this space, we think of really three main categories, maybe maybe a fourth I'll mention, but water filtration and drainage, power generation, data centers, obviously very hot topic right now, but also some HVAC applications as well. And one of the reasons that this is such an exciting market for us is it's huge. It doesn't take long to build up to that one billion just looking out very quickly. So I don't know how many billions it is, but it is in the billions. So a huge runway for us, but it's a very diverse market. So all of our processes are applicable. And what we're showing here is just a snapshot of some of the exciting opportunities for applications as well as customers. So when you look at recent awards and current pipeline of amongst our core markets this is the second one again that's why we're so excited about it lots of great opportunities that we already won and that we're currently working on and again with our diversity of applications and processes that fits very well for for this market and we're very excited about that a great example of that is a opportunity working on right now where a customer came to us for a thermoset part and we found out that it was being mated to a thermoplastic part. And we said, hey, we can do both. And they were quoting each one separately and they were going to assemble it themselves. And we said, well, we'll quote both. And while we're at it, we'll go ahead and assemble it for you and give you one complete part. No one else was doing that. So that's been a very good, good ongoing conversation and absolutely separated us from our competition. So very exciting. That's just one example of what we can do. And another advantage is our experience in being a molder and a producer of SMC. So there's a lot of SMC used in this space. So for customers that want a molded product, the fact that we make our own SMC gives us an advantage for numerous reasons. Cost is one, of course, but also the technology and experience, technical know-how that comes along with that. And for a customer that might be molding their own parts. And once our material, the fact that we mold SMC, we can have really good conversations with them on design. And really we understand their possible pain points and really help them avoid some pitfalls. So our customers, our experiences, our customers are very much valuing that and it's allowing us to win. So in this space going forward, we're going to proactively pursue opportunities in that electrical sub-market, specifically power generation and data centers we've we've invested in market data and we've gotten a good head start on identifying customers and applications and both of those spaces are going to grow no matter what i know that there's um or talk about maybe there's too much a data center going on but when you're talking trillions of of dollars obviously a huge amount of growth even if it slows down a little bit so very exciting for us building products so this is when we think of building products we think about home exteriors where a lot of wood parts are being displaced by composite plastics whether that's a door like eric mentioned shutters siding as well you can see one of the examples there of composite siding then when you think of patios and decks we do decorative lattice that you might see in some of the big box stores, but also decking is a very interesting market right now. We're not really looking at the decking itself, but because that's such a trend right now, all the ancillary parts that go along with it is very exciting for us. So we're looking at ways to tag onto that and potentially grow with that market. So that could be the railings, the structure, anything that goes along with the actual decking itself. So a very interesting and very exciting market. And then finally, kitchen and bath, where there's a lot of applications for SMC, including shower bases. Our value proposition in this market has a lot of similarities to what we just talked about, the utility market. A diversified portfolio of processes and products, our experience in molding large format parts and producing our own SMC certainly helps us in this space. And our experience, again, of collaborating with customers to solve problems and delivering elegant solutions is a huge advantage for us. So going forward in this space, similar to utilities, we are proactively pursuing OEMs of the products we've identified as good fits for our processes and we're evaluating other paths to the markets like direct to big box potentially or direct to consumer. Right now what we've discovered is there's a lot of steps between our facility and the end use application. So we don't know what the answer is but we're asking the question, And is there a better way to do that? Do we go direct to the actual consumer or do we go direct to those big box stores? Then finally, construction and ag market. Amongst the five markets, this is the one that we're probably earliest in the development phase. We have a small foothold. We do some parts for John Deere. We have some applications with fans for barns. But this is not, while not as large as some of the other markets that we're dealing with, it doesn't we don't think the the opportunity is over a billion but certainly it's in the hundreds of millions and again starting from where we are with you know single digit millions a long uh path for for growth for us and more excitingly and one of the reasons that we we are really focused on this is because of the parallels between this space and the truck space you can see hoods and you can see roofs those are things that we know those are things that we've been doing for 30 years and our ability to um talk to our customers in this space whether it's john deere caterpillar case new holland what have you our experience with those truck manufacturers and power sports oems gives us a lot of credibility in this space and some of the conversations that i've been a part of they really value that we have that experience and are asking us a lot of great questions of how we can grow with them so our value proposition again you see some similarities again with the previous two. Our portfolio products, again, is a strength. And our experience in SMC production, as well as molding and large format parts. When you think about construction vehicles, ag vehicles, these are big parts. These are big vehicles and they need big parts. So that falls right into our bailiwick. So going forward, we're going to leverage that credibility with our truck customers to win more quotes we're doing that right now we're going to proactively and persistently educate customers customer engineering teams on the advantages of our thermoplastic technologies so dlft and low pressure are a little unique in the space and it's not something that engineers learn in school so we have to educate them we've already done that with power sports to great success we have to do that again in the ag and construction space it's going to take time We know that we have to be consistent and persistent with it, but those, those seeds will come to fruition and we will be a decent player in this market eventually. And finally, we are looking to add a dedicated resource to this market and really, again, get that efficiency of focus where they all day, every day, they're looking at how to grow in this space. So in summary, circling back to where we started, you know, we've, we've made significant transformation of the commercial team through improved processes, focused teams and investments, and additional resources. The team is executing at higher levels and poised for growth, and that growth is accelerating. Record year in 2025, great momentum so far this year and in the first half that we've proven and second half that we're working on right now and more to come. And finally, tremendous opportunity ahead of us. We have billions of dollars of available opportunities in these spaces, these five markets that we're focused on. And that's what we wake up every day, figuring out how to do that. And while I would say, you know, 2025 and so far 2026, like I tell my team, it's a great start, but it's only that. It's a start. We have to keep pushing, keep going. And this will be much, much further along when we look back in five years, when we're a billion-dollar company.

Mike Gayford, COO

And with that, I will hand it over to Mr. Gayford. so shortly after alex started i've shared this story with john earlier at lunch uh i told him you sell it we'll make it and you can obviously see they're having a lot of success so the pressure is quickly turning the back to to arnold and i to to make sure we keep up with the sales team but uh good afternoon so arnold and i are excited to they let us out of the manufacturing plants and we're going to present to you guys the operating platform at core uh with this week's announcement i thought it'd be appropriate to give a little background on myself i have almost 30 years of manufacturing experience and quickly approaching 19 years specifically in in composites i joined core nearly four years ago and one of my first assignments was the must-win battle battle for getting the basics right in gaffney and columbus we stabilized equipment strengthened accountability and put the right people in the right roles and then also rebuilt the operating discipline The success in that must-win battle that Eric talked about was built on in subsequent years for Invest for Growth and now for the Mexico expansion. So today, I'm honored to stand before you as the COO in the COO role. I see this as a continuity. It's not a change in the direction. My focus is converting the opportunities that Alex talked about into stable production and profitable growth. So back to the operations platform. Most investor presentations focus on markets, products, financial results. We want to show you today the operating system that makes those results possible. Because we can't physically take you through all the plants, even though we will take you through Matamoros tomorrow, we're going to show you how the network works, how each operation plays a specific role, and why we believe the operating system and the people are a competitive advantage. The important story is not that we own manufacturing plants. A lot of companies own manufacturing plants. What differentiates CORE is how we combine the people, the process, and the specialized assets across one integrated network. We develop people internally. We move leaders and knowledge between facilities so expertise is not trapped in one plant. Many of our products, as you can see, are large complex parts. We'd like to say at CORE, we build big better. So let's look at the framework. We describe CORE's operating platform through three reinforcing elements, execution, specialized manufacturing footprint, and differentiated composite solutions. Execution earns customer trust. Our footprint creates scale and options. Our capabilities allow us to solve difficult customer problems using the right material, the right process, and the right cost structure. The value is not one plant, process, or piece of equipment. The value comes from combining experienced people, material knowledge, engineering capability and large-scale assets into one system. The starting point for that is execution. Our commitment is straightforward safely ship good parts on time every time. The three measures on the page represent the basics of manufacturing safety quality and delivery. So as Eric said Dr. Deming said in God we trust all others bring the data so there's the data last five years of how we've been performing on those metrics additionally the other proof is how our customers recognize our performance in 2025 core received a supplier quality excellent role from general motors in 24 we received the brp gold supplier award and in 2023 we received pacars 10 ppm supplier award for quality and execution performance those are result those awards are results of consistent performance not isolated events it comes from experienced people disciplined processes and consistent operating standards which are deployed across every facility on our network so now we're going to dive into the footprint core operates over a million square feet of manufacturing space we have 83 presses in north america our presses range up to 5500 tons allowing us to manufacture some of the largest composite structures in our markets these large assets are important not every competitor has the facilities equipment or capital required to produce parts of this size again at core we build big better just as important not every competitor has the technical expertise to run them successfully the key takeaway from this slide is specialization we are not trying to make every facility do everything at columbus that is our center of excellence for SMC compounding. Gaffney focuses on hood and battery enclosure systems. Winona anchors our proprietary DLFT technology, which is direct long fiber thermoplastic. Coburg specializes in engineering solutions and specialty products using the structural foam and structural web processes. Matamoros provides scale manufacturing and is our truck roof center of excellence. Monterey is the growth platform that combines structural foam and structural web with DCPD and top coat paint technologies into one location. Each facility has a clear role and specific strength. Now we're going to look at each plant in more detail, starting with Columbus. Columbus is much more than a manufacturing plant. In our SMC Compounding Center of Excellence, it is our SMC Compounding Center of Excellence with over 100 million pounds of annual capacity. Our recent investments in equipment, controls, and automation have improved material consistency, reduced scrap, and provide a more reliable input into our SMC network. This consistency has helped some of our plants reach the 1% scrap goal. As Eric pointed out, we created a stake shortage in Matamoros when we achieved that goal at the Matamoros plant. Columbus also supports external material customers. We mold parts ourselves so we understand what the material must do when it reaches the press. That combination of compounding, molding, engineering, and application knowledge differentiates core when working with external customers. Another example of how we leveraged this capabilities with transfer programs. We had a customer transfer a mold on a Friday afternoon and said they needed parts.

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By Wednesday, we had made a new compound, made parts, and sent them with the business development team to be tested at the at the customer that highlights the power of internal compounding it creates speed so with that we're going to take a video tour of the Columbus plant SMC and and the SMC production we have here really is the heartbeat of core molding this is core molding technologies world headquarters in Columbus Ohio three hundred and thirty two thousand square feet Columbus isn't just the headquarters it's the only core facility that produces smc sheet molded compound and it's becoming the source for that material across the entire company the compound is engineered here then shipped throughout the facility to the molding presses and beyond to core's other plants across north america the smc compound is often used for the trucking industry along with automotive and utility applications this facility feeds many of our other facilities with that material it starts in the mixing room where batches of resin paste are prepared across two tanks and two production lines a recently upgraded batch system gives operators tighter control and more visibility into every batch strengthening quality control from the very first step next glass roving is fed into the line chopped and dropped onto the resin paste the two combining to form sheet molded compound the material then passes through the compaction zone where pressure forces out trapped air and drives the paste fully through the glass fibers from there the sheets move to the maturation a heated environment that builds the thickness and consistency needed for molding they cure there for 24 to 48 hours this is Coors SMC compounding Center of Excellence producing 100 million pounds of material every year really centers around our SMC production here that this will be the center of excellence for core, for SMC production, and that is really a core part of our overall portfolio. The cured sheets are then transported to the press floor, 17 presses in all, with capacities up to 4,500 tons, among the largest in North America. Sheets are cut and loaded into custom molds, each one designed in partnership with the customer and built in-house, with manufacturability considered from the earliest design stages. From molding, parts move into assembly, high-pressure water jets cut precise holes and features into each piece then major components like the three main sections of a truck hood along with underlying reinforcements are bonded together primarily through adhesive bonding with some hardware fastened by mechanical fasteners from raw compound to molded part to finished assembly it all happens under one roof in columbus ohio so that's a quick overview of columbus and i know some of you have been to the plant But it's really impressive, the mixing system, which is the heart of our compounding operation,

Mike Gayford, COO

those vessels that you saw in there would stand floor to ceiling in this room to give you kind of an idea of the size of those mixing vessels that we use. And then that line is making compound at over 40 feet per minute is what the speed of that. So it's very impressive to see in person. So that's what gives us control at the beginning of the value chain, where product consistency and finished part performance start. We are able to leverage this internally to achieve the low scrap percentages we talked about, and we're also able to leverage it to sell compound to external customers. Now, Gaffney tells a different story. If you want to see how culture moves from one plant to another, Gaffney is a great example. Gaffney is our hood and battery enclosure center of excellence, but when I think about the plant, I think about having the right people in the right seats. We have three leaders, Marshall Starr, Doherty Ortega, and Andres Garcia, that have each worked in three different core facilities and bring broader experience into this operation. They transferred not only technical knowledge, they brought operating standards, relationships, lessons learned, and leadership expectations. Culture is not a slogan, it's not a poster on the wall, it's how the operators respond to problems, reinforce standards, and develop people and deliver the customer commitments the equipment matters but the people make the operation successful Gaffney demonstrates how internal development leadership mobility great consistency strengthen the business and prepare the plant to pursue adjacent opportunities like the battery systems the battery enclosures in the back of the room so with that let's take a look at this Gaffney plant Gaffney facilities been here for 28 years since 1998, primarily making heavy truck hoods.

Marshall Starr, Other

I'm Marshall Starr, plant director of CORE Gaffney.

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Today, that legacy has grown into something much bigger. Spread across 135,000 square feet, the Gaffney plant runs on the strength of 10 large vertical hydraulic presses, each capable of 3,000 tons of force, shaping compression-molded SMC composite parts for heavy trucks, power sports, battery enclosures, and beyond. It starts with sheet molding compound, compounded in Columbus, then cut and weighed into a precise charge. That charge is placed into a mold heated to 300 degrees, and in about one minute, it hardens into a finished part. This is the press line, the heartbeat of the facility. Within CORE's broader manufacturing network, Gaffney holds a distinct role. It's the center of excellence for both truck hoods and battery enclosures, backed by more than 27 years of complex assembly experience.

Marshall Starr, Other

Many customers bring to us an idea of how they want to manufacture something. CORE's vision is providing engineered solutions to our customers.

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That commitment shows in the numbers. Gaffney has sustained 100% on-time delivery, with zero past due orders for more than a year running.

Marshall Starr, Other

The greatest impact operationally here at Core Gaffney has been our focus on culture.

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That culture of ownership drives everything on the floor, including the newest equipment. A newly installed dual 5-axis router adds serious capacity for battery enclosures. Up to 25 fully machined composite parts per hour, depending on complexity. One of the parts coming off that line? The battery enclosure cover for American Battery Solutions Bald Eagle platform. The battery housing powering the next generation of US Postal Service trucks.

Marshall Starr, Other

Every day we focus on making things better from a structural perspective.

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And Gaffney isn't done growing. CORE owns this property outright with enough room to double the facility's footprint. Built in capacity to meet whatever demand comes next.

Mike Gayford, COO

So Marshall's great you saw there him giving a presentation. Marshall came up, he was originally started it as a stealth aircraft technician, has worked his way up and worked at Coca-Cola for a period of time and leads our maintenance excellence program. So we brought the maintenance excellence from Coca-Cola to our plant, leads that. One of the things I'd highlight in the Gaffney plant is we talk about tracking green oil because all our presses use thousands of gallons of oil and even speck of dust will ruin the servo valves in them. So we have a green oil program that the Gaffney team has really helped us develop to filter that oil to a very low concentration so that we maintain our presses and keep that oil impeccably clean. So Gaffney shows how putting the right people in the right roles turns culture into a competitive advantage. Now we'll move into Winona. Winona is built around our proprietary DLFT process. Chris Jansen, Mike Bergman, and Melissa Wagon are three plant leaders that have more than 20 years of experience with this technology. Chris even started as an intern, was then an engineer, engineering manager, and is now the plant director. Additionally, our proximity to Winona State helps us add engineering talent and develop the next generation of technical capability. One of the most valuable things in Winona is it produces his knowledge. The talent can then move beyond the plant. Julian Rodriguez is one example. He started as an intern, moved into product engineering, and now works in our corporate account management department with Alex. The technical and manufacturing experience enables a deeper customer conversation because the account manager understands what the process can do, where the risks are, and how the operation can create value. Winona also demonstrates cross-plant integration of our specialized manufacturing footprint in a current program we are creating a dlft part in winona and an smc part in matamorris the smc part ships from matamorris to winona where we we combine it for final assembly and core manages both technologies and delivers one integrated solution to our customer rather than our customer having to manage multiple suppliers. So with that we'll take a look at the Winona plant.

Chris Jansen, Other

The heartbeat of CORE Winona is the expertise that the team brings to fiberglass reinforced thermoplastics.

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In Winona, Minnesota, that expertise is put to work every day, molding large complex fiberglass reinforced thermoplastic parts for industries like automotive, power sports, and agriculture.

Chris Jansen, Other

And we do that with a specialized process that we call the DLFT, which stands for direct long fiber thermoplastics.

Speaker 17

It starts with raw materials, custom compounded on-site to each customer's exact specifications. Resin, adhesion promoters, and colorants blended together, then combined with chopped strand fiberglass, compounded and molded in a single continuous line. The result is a mold in color finish with no paint required and no risk of corrosion. The process supports sustainability goals too. Parts can be recycled or reground and run back through the line reducing waste.

Chris Jansen, Other

Being the pioneer of the DLFT process in particular we have many many years of experience with combining those materials together from a composite perspective.

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That depth of experience shows up across the floor. Five production systems spanning 81,000 square feet with presses ranging up to 4,400 tons. It's the scale and precision behind products like the tractor cab roof core builds for John Deere's 4000 series line, engineered for strength without the weight. It's also a facility built on discipline, measuring performance hourly, daily, monthly.

Chris Jansen, Other

Here at At the Winona facility, we pride ourselves on having a strong on-time delivery track record, achieving 100% for several years.

Chris Jansen, Other

We work together as one team. We have a core culture that we all are transcribing to and we're all practicing.

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With room already prepared for future expansion, Core Winona isn't just meeting today's demand. It's building for what's next. Proprietary technology, proven people, one team. moving forward together.

Mike Gayford, COO

So Winona, in Winona, I'd take you right to the, if we were there, I'd take you right to the tailgate manufacturing cell where we make the tailgate inner panels for General Motors. It's such a fine dance of automation and manual operations all in one cell. There's about seven people dancing through that cell and they produce 60 vehicle sets per per hour between loading the press, doing some manual operations, then loading it into a robotic cell, and then delivering it every day for General Motors. It's quite a sight to see. I hope you guys get to see it one day in Winona. So Winona combines experience, emerging talent, proprietary technology, and cross-plant integration into solutions that are difficult for a single process competitor to match. Next we'll look at Coburg. Coburg provides another example of technical capability, this time through manufacturing efficiency and direct customer collaboration. So Coburg does two things particularly well. It makes today's products more efficiently and it works with customers to engineer tomorrow's products. The Lattice product demonstrates the first capability. The team improved the process so multiple pieces could be molded at one time, increasing our output from the same existing piece of equipment. The skid plate application is another, a skid plate being the shield underneath the side-by-side that demonstrates the second capability. The business development team heard about the problem during a supplier summit. We challenged the Coburg team to solve the problem. Coburg worked directly with the customer and performed impact testing, developed a thermoplastic alternative for a side-by-side vehicle application, and the team did not simply receive a print and mold apart. The team helped engineer the solution and around the application. The results demonstrate why customers choose composites. Lower weight, corrosion resistance, durability, and greater design flexibility. Let's take a look at Coburg.

Rob Anderson, Other

I think the heartbeat of Cora Coburg is the people. From our maintenance folks to our engineers, our customer service people, our finance people, our materials group, everybody has to work together.

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That collaboration powers a 241,000 square foot facility in Cobourg, Ontario, Canada, where CORE runs a specialized manufacturing process called low-pressure injection molding.

Rob Anderson, Other

I'm Rob Anderson. I am the business development manager for low-pressure injection molding here at CORE. Low-pressure injection molding, also known as structural foam or structural web molding, supports markets ranging from building products like plastic lattice to power sports and off-road vehicles to industrial and utility applications i think that's a unique thing that we do for our customers the low pressure injection molding process is kind of niche and it's really important to design the product for the process and for the tooling we get designs and design ideas from customers but really they don't know how to design for the process so the team here is really well equipped to walk the customer through that step-by-step so that we have a design that's both toolable and manufacturable.

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That engineering-driven approach starts at the material level. Plastic, prime, regrind, or a blend of both, is combined with additives like colorants, UV protection, anti-static, and antimicrobial agents, along with a chemical blowing agent, then melted into a homogenous mix. one of the biggest advantages is shot size up to 240 pounds of plastic in a single shot that means large complex parts with dimensional repeatability built from lower-cost commodity plastics without sacrificing performance core Coburg runs 18 presses with capacity up to 2,500 tons on the floor today skid plates for side-by-side off-road vehicles and bases for home standby generators. Entire units built off a single molded platform, with roughly a quarter million produced every year. The facility pairs high-volume, big-box supply chain experience with specialty engineering, a combination that's driven real performance gains. OEE has improved 35 to 40% over the past seven years, now running well into the 80s and 90s. World-class for a molding shop. The process also supports sustainability goals. It can run on 100% recycled material, use less power due to low pressure requirements, and ships finished parts to every continent every day.

Rob Anderson, Other

All the different things that this process brings to the table, the value that it brings to our customers, it just gets me excited and I just can't wait for the next problem to solve for our customers.

Mike Gayford, COO

So you saw the skid plate application there, we make about 24 of those every hour. also was there was the uh generator pads and you saw us inputting inserts we the Coburg plant does a great job of of engineering uh error proofing into the process we use cameras and vision systems to make sure we get all those inserts in the into those uh the bases to make sure we protect our protect our customers so Coburg demonstrates how continuous improvement creates capacity in today's business while we while customer collaboration creates tomorrow's growth across the four plants the stories are different but the operating model is the same the same operating model continues in

Arnold Alanis, Other

mexico where we combine scale and growth capacity arnold's going to take us through the the mata morris and monterey facilities thank you mike appreciate that good afternoon everyone my name is arnold alanis and i'm the executive vice president of operations for mexico i've been the company for 14 years now and i bring about 32 years of experience in manufacturing today i'll walk you through the two mexico plants matamoros and monterey and our 2026 muslim battle let's start with matamoros our largest facility matamoros is a 600 000 square foot facility with 672 employees and with capacity up to 500 5 500 tons the plant is designed for large scale cost-competitive manufacturing, SMC, DLFT, and spray-up processes. It also supports some of the most complex programs and is the largest heavy truck roof manufacturing facility in North America. Those of you ever going to sign up for the plant tour tomorrow will be able to see that firsthand. Let's take a few minutes to see the Matamotos operation in action.

Speaker 17

A 600,000 square operation. 672 employees across three business units, 24 compression molding presses, running up to 5,500 tons.

Arnold Alanis, Other

Matamotos is CORE's largest facility and a key manufacturing hub.

Speaker 17

The facility integrates advanced processes, DLFT, Open Mold, VRTM and SMC, supporting a broad range of composite manufacturing programs across CORE.

Arnold Alanis, Other

Our strength is definitely our people, combined with advanced manufacturing capabilities and engineering expertise to deliver high quality solutions for our customers.

Speaker 17

It starts with SMC, Sheet Moulding Compound, the material behind every product built here. The molding area runs presses from 250 to 4,500 tons, feeding five SMC assembly lines downstream. On the facility's latest launch program, years of lessons learned have delivered a flawless start. No quality issues, no delays. That line now produces 15 hoods per hour, running two full shifts for more than 200 hoods a day. It's what makes Matamoros the largest heavy truck roof manufacturer in North America, delivering lightweight, durable, high-performance hoods, roof hoods, decks, and blades for transportation, watercraft, wind power, and decorative industries. Elsewhere on site, the DLFT area runs two presses at 5,000 and 5,500 tons, part of 43 distinct processes across the plant, from hand lamination to VRTM and beyond, with roughly 70,000 square feet of open capacity for future growth.

Arnold Alanis, Other

Right now, we are building an expansion of 30,000 square feet, bringing and installing now two new 4,500-ton presses for SMC.

Speaker 17

But growth here isn't only measured in square footage.

Arnold Alanis, Other

The investment of core has been not only on the building or on the machinery, but also on the people. And that is our strength, and that is what is ensuring the results for the future programs.

Speaker 17

A strong culture, clear values, lived out on the floor every day, from quotation through validation to in-house production. At Core Matamoros, advanced manufacturing and skilled people come together, engineered to deliver, built to grow.

Arnold Alanis, Other

Now let's move over to Monterey. Monterey has gone through a significant transformation, expanding from 50,000 square feet to 217,000 square feet and 226 employees. The facility currently operates nine presses with capacity up to 1,000 tons. But this transformation was about much more than just square footage. We consolidated two plants into one facility and brought an external warehouse operation in-house. This created a more efficient operation and more importantly position Monterey for the future. Today Monterey is being established as our DCPD Center of Excellence with integrated top coat paint capabilities and a strong platform for future growth. The goal is clear, build the capabilities in Monterey today that will allow us to grow the business tomorrow.

Speaker 17

CORE operates a unique manufacturing facility built on precision, process, and people. The plant spans 217,000 square feet and employs a workforce of 226. It's home to advanced molding technologies, including structural foam, structural web, DCPD, and topcoat paint.

Arnold Alanis, Other

It's a very unique manufacturing plant that we have over here in Monterrey. science. We have two processes. We have the process of power sport and DCPD.

Speaker 17

As a tier one supplier, CORE delivers parts that meet the rigorous quality standards of the heavy-duty and power sports industries. The facility runs nine presses capable of up to 1,000 tons, producing a wide range of molded components for multiple customers and applications. The process begins when dcpd is injected into a closed mold triggering a reaction that forms the molded part from there components move through assembly then finishing where primer and when required top coat are applied at the core of it all is a simple philosophy the best process is one that's safe stable and repeatable it starts with understanding what the customer needs not only their their specific validation but exactly what they need require for the part to accomplish then we select the right process for it rather than forcing an application to fit an existing solution the team designs around what the part actually requires then validates and moves into full-scale production core monterey has also been designated a dcpd center of excellence a recognition of its specialized expertise in this technology recent growth has been substantial the manufacturing footprint has quadrupled, creating space for new lines and new capabilities, including the addition of DCPD processing and a new paint line.

Arnold Alanis, Other

We have 70,000 square feet available for more capacity or more opportunities of business for continuous improved future growth.

Speaker 17

None of this happens without people. CORE is hiring and training talent aligned with its core values, backed by a cross-functional team spanning engineering, quality, business development, supply chain, and continuous improvement.

Arnold Alanis, Other

This cross-functional collaboration allows issues to be identified earlier, and we can optimize the systems before launch, during launch, and after launch.

Speaker 17

That coordination has translated into real results. Fewer delays, stronger on-time delivery, and greater efficiency across production, scheduling, and shipping. With expanded capacity, new capabilities, and a team built around continuous improvement, CORE Monterey is manufacturing complex components and building for what's next.

Arnold Alanis, Other

Next, there's three reasons why CORE wins. Execution, capability, and solution. Number one, every day at 9 a.m. we're standing on the production floor reviewing safety, people, quality, and delivery. Number two, we have a unique capability to offer two processes under one company, thermal set and thermoplastic. Thermal set being molding heavy truck parts, like SMC, or thermoplastic, mainly power sports and personal watercrafts. And number three, we work closely with our customers to find solutions to their problems or needs. This concludes the overview of our six plants. Thank you. I'll now hand it over to Stephen.

Sandy Martin, Head of Investor Relations

Awesome. Thank you, guys. thank you everybody so far that concludes the first session of our presentation uh we made it through that a little bit quicker so during this break since we've got some extended time we've got two trucks sitting out in the parking lot if anybody wants to go to the restroom get something to snack on or anything like that and then meet us outside we'll head outside and do a little show and tell thank you okay part number two here we go let's finish this thing out uh next up we're to have uh stephanie pulliam come up and she's going to spend some time on culture as a competitive advantage for us but first i want to play another quick video and then we'll welcome stephanie to the stage at core culture matters what's more important is how we turn our culture into a

Dave Duvall, CEO

competitive advantage that's why it's embedded in the first pillar of the strategy house because how we operate drives how we perform we are one core when one plant wins we all win our ability to collaborate across teams, functional departments, and our North American locations is what makes us stronger, and it's what sets us apart from our competition.

Alex Bantz, Other

Culture and performance go hand in hand in any organization, be it military, business, sports, anything. So for us, great culture drives great performance, and that is key to maintaining and growing business with our current world-class customers that we are privileged to work with. As we pursue new opportunities with new customers, we end up having numerous touch points between our organizations.

Alex J. Panda, CFO

Companies' long-term success is not driven by financial performance alone it is also shaped by the culture behind how people lead make decisions and execute every day a strong culture creates stability and consistency and how we operate it drives accountability reinforces operational discipline and helps us deliver through different market conditions culture plays a big role in why people choose to stay with an organization and why others choose to join it think about the workplaces people are most drawn to it is not just because of the work they do but because of what they stand for how they treat people and the reputation they build over time we all want to work where

Mike Gayford, COO

we feel respected supported valued and part of something bigger safety is more than procedures policies or training it's part of our culture it's how we demonstrate respect for one another every day when we look after each other speak up about concerns and take responsibility for creating a safe workplace we build trust and strengthen teamwork continuous improvement is not just a process it's a mindset by constantly improving and sharing knowledge across teams we become stronger more innovative and better positioned to it our culture standards should be something employees

Dave Duvall, CEO

experience in real ways on the floor in meetings across shifts and across locations when people feel respected included and proud of the work they do we create an environment where they can do their best and continue to grow culture isn't just something we talk about it's something we demonstrate every day through how we work together how we support each other and how we execute with excellence when we get that right culture becomes a true advantage driving results strengthening our company and positioning core to win long term hey good afternoon everybody i'm stephanie

Stephanie Pulliam, Other

pulliam i'm the executive vice president of human resources i joined core about five and a half years ago i started as the director of total rewards i am one of the lucky beneficiaries of our succession planning process i will talk you through a little bit about that but i took this role on just under two years ago so i spent time with my predecessor renee going through our succession planning to make sure that i was set up and prepared for this role as i took it on so it's just a tiny bit about me. So you've clearly heard from our leaders why culture and people are important to us. I think you've heard that woven through all of the presentations so far today. You've seen culture talked about in the various plant videos. So I want to take a minute to kind of ground us back to the strategy house that Eric shared earlier. Culture as a competitive advantage is our first pillar it's our most important pillar we truly believe that having that culture and people in place are really what help us execute that long-term business strategy and then we put in place various leadership development programs because our leaders are the ones that help create that alignment for our employees back to that business strategy the culture is where we bring in the behavioral components and i will talk about the programs that we have in place to support all of these and then ultimately at the end I will talk about some of the execution of the strategy from the culture and people standpoint. Okay so let me talk a little bit about some of the systems. We've spent a significant amount of time and energy into developing systems and processes to support our leadership and talent development. Eric mentioned our must win battle back in 2021 had some components of organizational development so some of these programs were developed as a result of that must win battle and we've continued to build and improve upon those in the several years after that. Now these systems that I have shown here lots of organizations have these right so what I want to do is take a minute to explain what is maybe unique or at least special for us at CORE what makes it important to us. So starting on the left our internship program so our interns are brought in they get assigned projects they have the opportunity to present back to us to the leaders the conclusion of their internship the results of their projects mike mentioned our plant director chris shansen and winona started with an intern as us with us another intern that i would like to highlight is here with us in the room today today talia in the back started with us in corporate hr as an intern and today she actually helps manage our internship program moving into our career paths so we want to make sure that our employees know what those potential advancement opportunities are matched with the business need. So we've developed those career path plans that show people how they can move forward in individual contributor roles, ultimately into people leader and potentially up to executive positions. Now the tools that we have in this career path are also critical for the leaders. So built into these career paths, we're giving the leaders the tools to help facilitate those career path conversations with their employees to help understand where their interests are, where their skill sets are, to potentially continue those career path conversations. Now, moving into skills assessments, being a manufacturing organization, you can imagine that it's very critical for us to understand the technical needs that we have, the technical abilities, and ultimately where our workforce stands in relation to those. So we have a big matrix where we are able to evaluate those skills, and that really helps us identify where we have subject matter expertise and where we maybe have some areas where we need to prioritize those development or training efforts. All of these things then translate into targeted actions that we put into our individual development plans. Now, these are not performance improvement plans. This is different. this is focused on true professional development so we have put together these tools it's a formal individual development plan it could be for somebody who is working on that succession path and giving them targeted actions to work towards those potential future opportunities it could be for somebody newly promoted into a manager position to make sure that we're giving them the opportunity to achieve success in that role and what are the things that they need we We partner mentors with them through this. We utilize what their natural strengths are to help them be successful. Moving into performance management, every organization has performance reviews, right? We give performance reviews to all of our employees. Internally, we say that we use this to measure both the what and the how. So of course, everybody has goals. We want to make sure that we are executing on those goals. That's the what. But equally important are those behavioral competencies. So we build in those competencies into our performance management system. One of the things that we also do that is maybe a little bit unique is all of our salaried employees are given a professional development goal. So even if they don't have a formal individual development plan, everybody has something tied to their own professional development through that annual process. Leadership Essentials is our foundational leadership training program. So oftentimes you hear that people are promoted into their first people leader position, but they don't necessarily have the skills or the knowledge to be successful in that people leader role. So we recognized that gap and we developed this Leadership Essentials program as the true foundation of that. This is where I have a little bit of my show and tell. I think I felt like maybe I needed to contribute something to the very cool parts here. So I want to highlight this workbook. You can see it's over 200 pages. This is something that our organizational development team, led by Christina Farr, developed entirely in-house. So we wrote our own book on those foundational leadership skills and how that translates specifically at CORE. All of our leaders have been trained in this Leadership Essentials program and some individual contributors as well as part of their succession planning opportunities. They get trained in this and we do this ongoing for people who are new to the organization or newly promoted into a leadership role. The second step after that is our Leadership Development Program. We call that LD2. This is a more select group. So these are for our high potential employees they are nominated and selected for participation in this program the picture that you see on the bottom right is our current cohort it's our fourth group i am one of the lucky graduates of this program as well and some of the names that you've heard mentioned throughout the day we do this year-long program with this group and they get you know lots of trainings they are assigned projects as a part of this program but one of the things that has been truly successful for us is a week-long conference that we do where this group gets to come together in person so a lot of times these individuals are in different roles they're in different plants so they don't have the opportunity to come together in person and this gets them the opportunity to see each other to interact with the leaders and get that face-to-face interaction and then finally i'll wrap this section with the succession planning so all of this comes together with our succession planning we evaluate this at least four levels deep into the organization in some cases more so what that means is that we have succession planning evaluated for the vast majority of our salaried workforce one of the things that we do is we hold cross-functional workshops so after we do our succession planning evaluations we get together with the leaders to have conversations with each other and share our succession planning evaluations as a leadership group. And this really has helped us see where we have different people that have interests maybe in other areas, or maybe they have skill sets suited to a different area. For those of you going on the tour in Matamoros tomorrow, you'll get to meet our plant director, Hamero Castro. He's a perfect example of this so through these workshops and discussions we identified that so his background let me back up his background is in finance he was our country controller but we learned that he had an interest in a plant director role so that got us talking about okay well if he's interested we think he might have some skills for that what can we do to help work him towards that position so So part of that included getting him into an operations role, and he's now the plant director in Matamoros. So all of these programs combined, right, help us make sure that we're attracting new talent, that we can develop the talent within, and that we can retain people. And all of these tie back to our foundational value of being a learning organization. So shifting a little bit, those systems, those processes, they are all great. They give us a foundation, but they're really only part of the equation. We need to make sure that we have that culture and we have the behaviors around it to make those systems and processes successful. One of the things that we did, taking that first pillar in our strategy house, is defining these culture standards. And this started with our leadership team. We did a workshop, and then we started to have workshops with the management teams at all of the plants to talk about what our culture is who we are how we want to operate we then continued those discussions getting feedback from employees because at the end of the day we really wanted to make sure that these culture standards they give us a common language it gives us consistency and we wanted that to come from the people not just from us but really wanted everybody to see their input into developing these culture standards another thing to highlight how critically important these culture standards are to us. As we went and rolled these out through training, Eric and I partnered with Mike and Arnold. We went out to every facility. We held all-hands meetings so that we could get in front of every employee to show just how important we feel culture is and express, right, that everybody in our workforce, they are the ones that are going to help us actually bring these culture standards to life. We need everybody to display those behaviors every day and then our leaders are the ones that help us reinforce that and they do that through a variety of ways through one-on-one conversations and we have a toolkit that we've developed to help our leaders have those one-on-one conversations we do that through feedback and coaching we've recently implemented a real-time feedback tool so that gives the leaders weekly pulse survey information so they can interact with the teams and get that feedback live and have the ability to interact back with the employees. Of course, accountability, recognition. We have a platform. We've built these culture standards into our recognition platform and that helps us make sure that we're promoting those behaviors that we want to see repeated. All of that ties back together with development again to our learning organization value. So all of those programs are tied back into our culture standards as well. You've gathered that we like data here at CORE. So I want to show you some data of how all of these programs translate into measurable progress for us. So our salary voluntary turnover is our first metric that I would like to highlight. We are incredibly proud of this statistic. So in 2021, we had a voluntary turnover of just over 19%. Today, we are tracking below 7%, and that is an annualized number. So for 2026 that is not year to date that is if we continued on the rest of the year this is where we would sit so we are incredibly proud having that stable workforce is truly what allows us to execute that long-term strategy looking into our leadership pipeline so we want to make sure that we are understanding our bench strength and building that bench strength our senior leaders which we define as our director level and above, 74% of those individuals were promoted internally into their current positions, which is a true testament to all of the programs that we've developed and also all of their active involvement in participating in those programs. Of that same group of people, 65% of them have an identified successor listed today, So that helps us understand where we do have that bench strength, but also where we know we may need to target maybe some interns to build that talent pipeline or look at workforce planning for strategic external hiring. Next one I'll talk about is our promotion rate. So Eric mentioned this in the very beginning of where we were last year. We're continuing that same trend this year. we're hovering right around 50 percent of all of our open positions being filled through internal promotions which again is just a tremendous testament to all of the things that we have in place now as we look to grow right we do expect that that will come back down a little bit but we will still continue to do all of those programs and maintain a strong internal promotion I mentioned the weekly feedback tool that we have we also for several years have been doing an annual employee engagement survey that touches all of our employees we do that on a scale of one to five and so our score on that has improved from a 3.6 in 2021 to a 4.0 in our most recent survey and that's with 80 participation of the entire workforce I talked about our individual development plan so the last statistic i have to share with you is that we today have 142 people with an active individual development plan with that i'd like to close by of course bringing it back to our people we're celebrating our 30-year anniversary today or this year all these pictures are the internal celebrations that all of our people have had you can see how proud they are You can see these trucks outside in some of the pictures. We bring those out to our employee celebrations. But really, all of the success that we've been able to achieve, we would not have been able to do it without the people. These are the people that are going to help us with the next 30 years. So really, for us, we think the connection is pretty simple, right? You have that strong culture, which gives you better leaders, gives you stronger teams, leads to that execution. ultimately that can translate into the customers having confidence in our team and leading to that long-term sustainable growth. And with that, I will transition over to Alex to talk about our financial overview. Thank you, everybody.

Alex J. Panda, CFO

Thanks, Stephanie. So as Stephanie said, Alex Panda, Chief Financial Officer. Pretty sure everyone in this room knows who I am, but for those that are on the webcast that don't know, that's my introduction. So you've heard from Eric, who led us off with the vision of the future of the company, right? Going from good to great. And then you had Mr. Bance over here talk about our must-win battle from two years ago, Invest for Growth, and the success that we've had over the last 18 months. And then you had our operational leaders, Mike and Arnold, talk about our must-win battle from three to four years ago Transformation which has been extremely successful and you've Seen that in the margins over the last couple of years. And then all of this couldn't have been possible without the HR systems that we've had in place that has led us to a Culture as a competitive advantage, right? We believe in that. And so my job today is to tell You all, well, how does that turn into long-term shareholder Value, right? And we're going to get into that. So before we do, we're going to talk about our capital allocation policies. And many of you in this room have seen this data. So first of all, maintaining a strong balance sheet. As of 630, we had zero debt and our cash balance was $12 million. For working capital, we really strive to have payment terms with our customers of 30 days and with our suppliers 60 days. Those payment terms really allow us to take our AP and have it offset our inventory, which is always a goal of ours. But the real main reason to have a strong balance sheet is to be able to take advantage of those organic and inorganic growth opportunities that come up, right? We can't control the timing of when those come up, but what we can control is that we're ready for them and we have the capital available to take advantage of those. And you've heard us talk a lot about organic growth, right? it's our number one priority at the end of the day we require a return metric of 14 and you've heard us talk about the investment in mexico right and that's why a lot of you guys are down here is to see that investment in mexico 25 million dollars over the last year and it'll be wrapped up by the end of the year our sustaining capex is roughly three to three and a half percent i would say over the last two to three years our floor has been ten million dollars so we've been little bit above that but as we continue to grow we will target three and three and a half percent and then lastly total capex for 2026 will be 30 million dollars now inorganic m a opportunities our main priority here is to diversify our end markets right it's a lot easier to get into new markets and expand into those new markets through inorganic growth rather than organic growth right You go buy those customer relationships. The financial criteria for an M&A opportunity for us is to Hit that 14% return metric by the end of year 2 and then also Be below 2.5 times leverage by the end of that year. And then lastly, returning capital to shareholders. We have a stock buyback program in place. We just renewed it in Q1 of this year. We have seven and a half million dollars of availability left to be spent over the next three years. So what have we done to make sure that we have that availability? Well, in July, we just refinanced our debt, right? And so we extended our debt and now matures in 2031. We've increased our availability from 75 million dollars to 100 million dollars. And we've simplified the structure. We've gone to a 50 million dollar revolver and a $50 million delayed draw term loan. Now, that term loan will be used for large organic or inorganic opportunities. And we also were able to make the debt cheaper. Now, in order to do this, we did a very disciplined multi-bank bid process. So we had four banks come in and bid on the business, and we worked with them. And I'm proud to say that we have two of our banking partners here today, Thank you guys for being here. We really appreciate it and value the relationship we've been able to build over the last couple of years. So you heard Mr. Bance talk about the organic growth opportunities that we've won over the past 18 months. And we're going to take a little bit of a deeper dive into those into that data. So over the last 30 months, we've won $142 million of annual sales of awards, right? $115 million of that revenue is incremental. Now, we categorize our wins in two different categories. The first one being replacement business, which would be if we're currently making a truck program, truck hood program, and it's up for rebid and we re-win that business, that's a replacement program. Normally not incremental business, right? We might get a little bit better margins, a little bit more revenue, but at the end of the day, it probably won't move the needle a ton. The other category is incremental, and this is a program that we currently don't make, and it's brand new to us. So every dollar of sales of that award will increase our sales overall. So of that $115 million, $85 million has not yet launched. And 90% of that $85 million will launch in the next 12 months. So I'll give you a little sneak peek of what our must-win battle in 2027 is. It's the launch of all of these programs, right? It's imperative to the success and the growth of our company That we launch these programs flawlessly. And like mike said earlier, if you win it, we'll build it. We're going to put mike and arnold's team to the test on That one. So you can see the diversification Of those new wins, right? So of the new wins, 28% has been In building products. Utilities was 22%, and then other was 11. So we've really won a lot of business outside our main two industries for truck and power sports. Now, like everyone else has said, we don't want to decrease truck and power sports. We love our truck and power sports customers. We want to continue to grow those customers and into those markets, but we want to grow everything else at a faster rate. You've also heard us talk about sales to 300 million, right, and the confidence we have us getting there well this is why this chart on the up here is why right now we have launched programs of roughly 225 million dollars and that 85 million dollar walk to 300 it's not a matter of if it's going to happen it's a matter of when we know we have launched the or we know we've already won those programs it's just a matter of launching them we've also talked a lot this excuse me we've also talked a lot this year about our investment in Mexico, right? And I like to break it down in two different categories, Monterey and Matamoros. So it's a $25 million investment. $20 million of that is in Matamoros. What do you get with that $20 million? Well, two brand new state-of-the-art 45-ton presses, which those of you that are here today and are going to see the Matamoros facility will see tomorrow. It's going to be extremely impressive. You also get 50 000 square foot building expansion and then we were also able to move our dcpd process from our matamores facility into our monterey facility and we really did that for two reasons the move of dcpd so the first reason is our main dcpd customer is in monterey so we have about a million dollars of logistical savings that we've already negotiated splitting with the customer 50 50. And then the second reason was to lower our capital expenditure Into the matamoros facility because now we don't have to do An additional building expansion to be able to do all of the Volvo assembly, which really was the launch pin, right, of why We did, gave us the capital to do the investment. Then switching gears to monterey. It's like arnold said, quadrupled the footprint size to 210,000 square feet. And we were also able to consolidate a 30,000 square foot external warehouse into the facility. So we had some lease cost savings there. We also were able to add top coat paint, which like Alex said, the conag industry will not let you win a program if you don't, if you're not able to build or paint those products. But at the end of the day, doing these kind of investments required the discipline of hitting your return metrics, right? The team went over and over and over again, going through the costs, understanding where our savings were to ensure that we hit a 14% return to protect our shareholders. So what does all this organic growth mean for our margins? I actually get that question a lot from many of you in this room. So you guys are very familiar with our company. Baseline gross margins are 17 to 19%. We've given that guidance now for two to three years. As we get into 300 and 350 million dollars of sales, we Expect an additional 200 basis point improvement for improved Leverage. And then all of those programs that We've won, all of the work that has been done on the operational Transformation will be another 200 basis points. So our target gross margins in the near future will be 21 to 23%, which those additional gross margins give us more Availability to go do an acquisition. And like i said earlier, the number one priority is Diversify our end markets when we do an acquisition. And we've been pretty successful at that. So i've been with the company 12 years on thursday. It's my work anniversary. And the first acquisition we Did when i was at core was the winona facility. We purchased it from cpi banani. And we got two main things from that acquisition. The first one we got was the DLFT process that you've heard Mike talk about. The second thing we got was a great relationship with BRP and grew us further into power sports, primarily in the marine market, right? And then the second acquisition we did was in 2018. We purchased Horizon Plastics, which gave us the Coburg Ontario plant and then also a Monterey facility, which at that time was just a Startup. There's really nothing in there. And we got a couple things out of that acquisition. The first one being structural foam, structural web, which is A low-pressure injection molding process. And we're also able to get our building products market going When we're selling lattice to ufp. And the last thing we're able to have is our atv business, right? So growing power sports. We're able to grow power sports With both brp and a brand-new customer, polaris. So what's the financial criteria of an acquisition that we're looking for? 50 to 100 million dollars in revenue. 14% return, like I said earlier, by the end of year two. And again, we want to be below that 2.5 times leverage by the end of year two. Eric and I have had the pleasure of meeting with a bunch of different companies over the last 18 months. We pretty much have gone and visited a company every other month, essentially. And what they're looking for is about six to eight times EBITDA for a multiple. And i will tell you, it's normally Closer to eight than six. When we're talking about $100 Million of acquisition sales, how does that change the business? What does the business look like after we do that, right? So our largest customer would go from 19% to 13%, and then our largest market truck would go from 44 percent to 30 percent and just to give you an idea i just walked you through the two acquisitions we've done in my time when i first started we were a 90 truck company we were able to diversify down to 45 but this would get us down to doing to 30 so our long-term financial goals they haven't changed well i guess they changed a little bit instead of saying 505 or one year went by so we now have to say 500 in 2030 so 500 million by 2030 we added gross margin on here when i started 12 years ago my predecessor john zimmer he told me this story once he said alex if we could just hit 30 percent variable margin and hit 10 fixed costs we'll hit gross margin of 20 percent and then if we just control our SGA costs of 10%, we'd hit that long-term goal of operating Income of 10%. And then just magically the math works. We're going to hit that return on capital target of 16%. That's all we got to do. He made it sound so easy in like Three sentences, right? But those are our long-term financial Goals. And 500 million, it's easy to stand up here and say, Hey, that's a number on a page, right? Anyone can make an excel Sheet say anything. But why do we have belief in that number, right? Why do you hear us stand up here and have confidence in hitting that $500 million number by 2030? Well, we've already talked about a couple of reasons why. So we already have known wins of $85 million. We know we're in a truck trough, right? And for those of you who don't know the truck cycle, truck cycle is about two years of downturn and about three to five years Of uptick. Right now we're in the second year Of a trough. And so act, which is the industry Expert, forecasts an increase over the next three to five Years. We're projecting that to be roughly $30 million. So that gets you into the mid $300 million range, right? Well, $100 million of Acquisitions, whether that's one for 100 or two for 50, that get you a little bit closer, 450. And the last piece is Mr. Bance's job over here to continue working on organic growth and winning programs after programs. And we really see growth in two different areas, right, that we're really focusing on. SMC sales. We've won four major programs in the last 12 months on SMC sales. We've launched three of the four. And that last program will be launched by the end of the year. Conag, we're just getting started on conag, right? We've invested in top code paint in monterey. We're reaching out to customers. We're being active. So that'll take a little bit of time to get. But if you think back to the slide i had a couple minutes ago, $142 million of awards that have won over the last 30 months. That's basically a $55 million annual run rate. So whether it's $100 million of acquisitions or 150 million Organic growth over the next three years. It is doable. It's achievable. We believe it. So you guys should, too. So what does core look like with $500 million in sales? Well, we're going to hit those long-term goals. So 500 million in sales, 21 to 23% gross margin, operating Income of 10%. John Zimmer hopefully calls me and says, Hey, guys, great job. You did what i said a handful of A couple other financial metrics that are interesting when we're at 500 million is our EBITDA margins should be between 16 and 18%. It's just a math equation based on our depreciation and amortization. And then operating cash flows will be 60 to $70 million, which is a big cycle, right? then we have more cash more capital to go do more organic growth and more inorganic growth and so really at 500 million dollars in sales core will be positioned as a higher margin cash-generated company that really really creates long-term shareholder value and for my last slide we'll go through 2026's guidance and update so for 2026 we're keeping our sales guidance the same Zero to up five percent. Probably going to come in right Around the midpoint of that. There is a shift though in our Truck. So over the last four quarters we have seen increases in Truck quarter in and quarter out. But we have seen and have heard And worked with our customers there will be a shift from q4 Into q1 of about five to seven million dollars of sales. That's mainly due to two reasons. The first, we're hearing that a A lot of other suppliers truck companies are shutting them down. And so they're not able to keep up with the demand increases. And then the second piece is because of the conflict on iran And the diesel fuel cost being at an all-time high. Some oem truck buyers are pushing orders out into q1. So it's two-fold. The other thing that will impact Sales is our tooling sales. You guys heard us talk a lot about tooling sales and the timing of tooling sales earlier this year we we announced that our in q4 the volvo tooling program will close in q4 well we've worked over the last couple months and basically negotiated with volvo a contract change which will allow us to recognize tooling on a percentage of completion basis which will allow us to pull in tooling sales into q3 about 75 of that 35 million dollars and then in q4 we'll recognize about 15 and then the last 10 will be recognized in 2027. full year gross margins will be 16 to 17 so just slightly under that 17 to 19 again mainly due to two reasons first one being higher oil costs which have increased our resident costs we're working with our customers to pass through those price or those cost increases in increasing our sales we've been able to work with them on most of those but there has been a delay in some of the larger oems as you can imagine it's been difficult to get those prices price increases done but as of today all of them are effective and they'll be effective for q4 and then the other thing is with those rut the rise in diesel fuel costs the extra freight that we've incurred between monterey and matamorris which starting up a new facility there are some you know impacts there those higher fuel costs were not in our in our plan at the beginning of the year and so we've incurred a couple of some additional costs there and then lastly we're announcing a new footprint optimization project this really gets back to what mike talked about with our focus on our daphne plant being the hood and battery enclosure center for excellence and our columbus facility being our center for excellence for smc compounding so this is going to cost us about two million dollars about 50 percent of that will be incurred in q3 50 of it will be incurred in q4 and we'll have about a million dollars in annual savings moving forward those costs will be in hdna and they'll be an add back to adjusted be but uh and with that i'll hand it over to eric for the wrap-up all right thanks alex

Dave Duvall, CEO

thanks for converting everything we talked about today into how it affects the pnl and what it'll look like for you guys in the future i want to thank you for taking your time and investing your time with us today and listening to us we appreciate the opportunity to share our story and our vision for the future if there are three things i want you to take away first Coors transformation is real and it's proven. Second, organic growth is accelerating. You've seen the new business wins and our market diversification approach. Third, we have a disciplined capital allocation framework and we focus on returns and shareholder value. What you guys should believe is that we've demonstrated improved margins through a difficult cycle. We've built a stronger operating platform. We have meaningful opportunities to scale revenue and earnings, and we have a management team lined around execution and accountability. I'm incredibly proud of all of them that you guys got to see today and the skills they have. Our path forward is clear. Grow organically, increase diversification, improve returns on capital employed, expand our margins, and deliver sustainable long-term shareholder growth. Thank you guys for listening today.

Sandy Martin, Head of Investor Relations

We're going to take a brief intermission and then we're going set up for a panel up here and take questions for the next 45 minutes and look forward to answering all the questions you guys have for us moving on to our question and answer session we've got plenty of time so if you've got a question please raise your hand let me find you remember i know a lot of you are probably loud and you think i don't need a mic but we need the mic for your question so it can be live on the webcast so if you have a question raise your hand please wait for me to come to you with the mic and then we'll get things started. You're more than welcome to ask one in person in particular or the whole team. So let's get rolling. Tyler.

Tyler, Analyst — Craig-Hallum

One of the areas that's kind of a hot topic but is not necessarily on your roadmap is kind of the aerospace and defense area. And with so many new companies like Andorle, Palantir, Cerronic, they're kind of changing the paradigm a bit and bringing a lot more commercial focus, speed to market. Curious if any of that's kind of in the roadmap, or if there's any kind of potential, you know, to kind of tap in any of those areas with so much going on in that space. And again, just being a little bit different from the old defense prime paradigm of the past. Again, there's a lot, seems like a lot more commercial focused kind of opportunities. So yeah, curious if you've thought about it or have any roadmaps for anything, anything in that space.

Dave Duvall, CEO

Yeah, I'll start Tyler, and then I'll let Alex give you some feedback but we've had the opportunity to quote a couple programs and I would say that defense contract world and the challenge I think the U.S. government is making is how do you take cost out of this the the historical materials used are what I would call carbon fibers and titaniums for race cars and airplanes which makes a missile or a one-way aerial defense vehicle very expensive and so they're looking for ways to make that cheaper we've had the chance to quote a couple things converting it from carbon fibers into a glass fiber based resin matrix which is you're talking about one tenth the cost right very very big difference today we don't have any of those programs in our in our new wins but we've had the opportunity to look at a few of them i think our large format press is in the u.s not only for those guys but also just think about the drone technology and and our government is looking for anti-drone and drone technology to bring to unfortunately the future of potential wars Yeah, I would just add, you know, we have had some exposure to some of these one-way vehicle applications, and they're very interesting.

Alex Bantz, Other

That whole space is a little bit of an unknown for us, so I think we need to do our homework and really understand the lay of the land and how do we differentiate ourselves and do it in a strategic way and not just kind of, you know, stumble into it.

Matthew Jauchius, Board Member

You guys have pretty much indicated that there's a lot of new business that's ramping next year. Are there any other plant optimizations that need to be done, or are you set once this Matamoros spend is done for this year? Is there a CapEx thing that you're going to need to do to ramp these projects, or are you already ahead of the game?

Dave Duvall, CEO

Yeah, thanks for the question, Tom. I'm going to have Mike tell you a little bit about the project Alex sort of announced there at the end relative to our U.S. footprint.

Mike Gayford, COO

Yeah, so we've been we've already been have the CapEx programs built into that. You know, the footprint optimization plan in Gaffney, where we're optimizing what we're doing as far as the battery enclosure closure systems. One of them you see in the back of the room there. So we have that built into the system. You know, next year, as far as CapEx, we're looking at our standard CapEx spend. We don't have any other optimization program planned at this time. We have invested in presses and some rebuilds as part of that optimization as well. We've seen that in Gaffney this year as well.

Alex J. Panda, CFO

So to answer your question, it would just be looking at standard CapEx spend going into next year. yeah i would add i didn't talk about it in detail but on that organic growth slide in my section of the slide deck of the 85 million of revenue launching next year about 14 million dollars of capital remains now nine mil eight to nine million of that is what's left to be spent as of 6 30 on the mexico investment and so if you take that out of the equation you're really looking at five million dollars of additional capex to do the majority of that 85 million dollars of annual

Tom Cellitti, Chairman

revenue because the volvo program in that 85 million is roughly 12 to 15 million so capex for that the launch of those programs is minimal energy costs are front and center of everybody these days and your raw material costs must be you know forefront of your concerns so question is How is that impacting your costs, and do you hedge any of your diesel purchases? And if so, like for how far out?

Alex J. Panda, CFO

So the only hedging we do is foreign currency. It's funny you ask that question because we've done a lot of investigation over the last six months on oil hedging. We've actually asked some of our major suppliers, do they hedge? and all of them which are bigger than us said absolutely not so I don't think we're going to try to do something that those guys don't do so right now we don't have any intention on doing that but we have investigated it but as of today we don't have any plans for it correct yep we don't but we have raw material adjustment either clauses that are very specific a calculation if polypropylene does this then this is the calculation so in some cases it's as easy as that in others it requires a lot of discussion about how oil price affects a resin price because especially our highly engineered resins there's just not a good uh you know defined global standard and so the raw material clauses we've historically done have been very it's been based on raw materials not freight itself right and so one of the things we've done more recently is start to try to build in a freight adjuster clause with some of our customers. And we've been successful with one customer recently.

Renee Anderson

I wanted to ask about SMC and why it's catching on like it is. And I guess what differentiates you competitively with your SMC product and process compared to what others are doing?

Dave Duvall, CEO

I'll start. Mr. Bantz can continue for me. But one of the biggest is that we make our own SMC and mold SMC. So when you think of the marketplace, there are many that make a compound and that's what they do they specialize in making compound not molding it so the fact that we can have good engineering and molding conversations with a customer buying that compound we have seen lots of positive feedback from from customers and potential customers in that regard it's something we spent a lot of years perfecting think about all of the molding engineers inside of our company and gaffney matamorres that have given feedback to the compounding team and the chemists and the many, many years of evolution of that, something we really focused on internally, which made our scrap better. That's how we really, that's one of the key factors, how we achieve sub 2% scrap as a company over the last four years. Bringing that to a potential external customer is a real value.

Alex Bantz, Other

And I would just add to that. It's not that we just make SMC. We make SMC for some pretty intense applications like trucks. So as we've gone into the space and talked to some customers and the building products, you know, the quality of our SMC is from a scrap percent on their presses is a pretty substantial benefit to them. And then also we, as we have gone into the space, we understand that customer service is pretty critical and, you know, dealing with the customers that we do, we're used to that. We just need to make sure that we keep that top of mind as we grow into the space.

Renee Anderson

Are you marketing it differently?

Alex Bantz, Other

I mean, is there something with the sales process today that that that was different that you just really weren't doing in the past that that's allowed it to the customers be more aware of it we haven't really done any active marketing per se we've done some just you know researching and cold calling we're trying to ease into it learn the industry and then when we feel we have a good footing then we're gonna go pretty hard into it we're not quite there yet this one's for Stephanie curious how long it took when you when you introduced the the the feedback program from

Stephanie Pulliam, Other

the employees and so forth how that was received initially how long did that take to them to buy into it was there a little bit of a pushback whether they really believed you were for real about it and it's kind of curious how that how that all played out because that's really important what you've all done yeah thank you for the question um so it's relatively new so first we started with a pilot so we that was just over a year ago that we started the pilot of that now i will say our annual employee engagement survey has been in place for many years so i think that has helped give that level of comfort with people giving feedback and that we are putting action plans in place so they know the feedback is being listened to um but i think you know when we when we rolled it out the new tool um you know we did training sessions leading into it and showed people the tool so the biggest thing that we hear concerns about is the confidentiality so we were showing them the tool to address that concern up front saying here is what we see uh to to give that level of comfort to people and then what we so once we launched it then i another thing that we did is i mentioned christina she's our org development leader she and i held meetings after a couple couple months of the program being in place to check in with those leaders go through the feedback with them give give them tips on how to share that feedback back to the employees and how we are listening to them and what we're doing about it so i think that's helped uh you know give that continuous momentum of you know we are continuing to look at this and listen to it another related question the internship program is that an internal one or when i think of an internship i'm thinking of you're bringing somebody like students in or whatever could you kind of expand on that thanks yeah so it's it's an internal program we partner with different universities and colleges, depending on the different locations. Winona came up a lot that has a there's a local university there, Winona State, that specializes in composite. So that has been our most successful with getting student interns. And then we have various partnership with like technical colleges. I have someone on my team who sits on the board in Columbus of one of the technical colleges with the H.R. groups to leverage that and get some more insights.

Arnold Alanis, Other

They touched a little bit on the feedback. One thing I do want to mention, Stephanie, at least for Mexico, something new for them, obviously going into it, understanding the system, and they've got a large group out there in Mexico, so when they started to do the exercise, it was really positive, it was really welcoming, and they started to get engaged and start providing feedback to us, which was really necessary for us to hear that from them.

Alex J. Panda, CFO

It was sort of a follow-up question to the CapEx question from earlier. When you did that bridge to get to the $500 million of revenue, some of that was organic growth. Obviously, there's the acquisition that you had in there for about $100 million, so presumably that's its own thing, but that would probably come with its own plan. Do you have enough capacity currently in the existing facilities that you have to do that organic, the remaining organic growth to get you to the $500 million? I understand there might be some tooling, but other than that, do facilities need to be expanded or do you need other major CapEx to get there?

Alex J. Panda, CFO

Yeah, great question. The short answer is no. So we have enough capacity in place to do roughly $450 million to $475 million in sales. Where it gets a little tricky is, do you have the right size press in the right process in the right location, right? Everything has to line up in order to not have a capital expenditure. And so that's where it would come. So if we could wave a magic wand and fill every single press with the right sales, then yes, we could get to $500 million organically. We wouldn't even have to do an acquisition with zero CapEx. Now, is all of that going to happen? I think the odds would tell you no. We'll probably have to do some CapEx. But in theory, we do have capacity to do roughly 450 to 475.

Dave Duvall, CEO

Eric, I think what would be interesting to you is that we also, Mr. Bantz has added a process to rank opportunities. And so when we get a new opportunity to quote, we consider what is the market? Is it diversified? What is the size of it? But another thing is, do we have the capacity or capability already to serve that customer? Because those are much more interesting to us if it's filling empty capacity than, oh, it's an interesting opportunity. but I'm going to have to make a large capital investment to be able to do it. And on some of those, we're gonna add $150,000 overhead crane or lift. You see the size of our parts, right? Depending on the part, there's gonna be some capex, but it's, can we leverage a majority of an existing capital installation? And that's something we do in that ranking when we decide, is this a good project for us? Is this what Alex calls an A or a B item? I don't know if you wanna add anything, Alex, to how you rank projects. That's something new in the last 18 months that Alex has brought to the organization.

Alex Bantz, Other

Yeah. So any new opportunity that comes in, there's about 12 questions we ask. And again, we try to hit the financials, the fit from a customer standpoint, logistic advantages, what we think about the customer, what we think the customer thinks about us. And certainly one of those is capacity utilization. And that's something that we're probably we have the ability to tweak the importance of each of those rankings. We'll probably start tweaking that a little bit more as we roll in this next $85 million of new capacity or new business into the organization over the next 12 months so we can dial that up in importance.

Alex J. Panda, CFO

I'll ask a question on the other side of that.

Alex J. Panda, CFO

On the acquisition stuff, I guess, Alex, I wouldn't mind hearing your thoughts on you were around during the Horizon deal, and I guess walk me through what you thought was good about that, what was not great about that, and how you want this time to be different or something. to that extent yeah good question uh so the timing of the horizon deal was not great at the end of the day um you know we had started to have operational inefficiencies in our other plants and the focus of the management team was on the those other plants at the time You know, it's really more of a coincidence that when we did the last acquisition, we started to see the decline in, you know, profitability. But the acquisition itself really had nothing to do with the decline in profitability. It was really the core standalone business that we had the issues in and that we were trying to fix. um but it's it's a common question we get um because of the timing of it but i so i would say the only thing i would change looking back would be the timing could it have been 12 months later which we can't control but what i will say is that acquisition has paid for itself probably two times since we've bought them uh the lattice business throughout covid boomed The ATV business we've won and been able to leverage with BRP and the Polaris business we've won over the years has been phenomenal for us. So, yeah, if I could delay it 12 months, maybe I would say that. But overall, it still was the right move and created long-term shareholder value at the end of the day.

Alex J. Panda, CFO

Just a little stress in between, you know, there and now. Then my follow-up is it seems maybe I'm wrong on this, but it seems like we've changed the acquisition target a little bit over the last three years or so and kind of increasing it from like, you know, 30 million to now it sounds like 100 million. I guess I was curious about the thought process and what went into that and why that change.

Alex J. Panda, CFO

Yeah, so I'll maybe answer quick, and Eric, you could probably give a little bit more color. um so we've we have visited like i said a handful of of companies um over the last 12 to 18 months uh some of those one of them was in monterey and it was about 10 million in sales so we've gone from one end of the spectrum um all the way up to a company that was 100 million in sales and quite a few in between and what ultimately where we got to was when we do an acquisition you know the amount of work that is required whether that's 10 million dollars or a hundred million dollar acquisition the work is the same and so if we real if our goal is to diversify our sales and we do a bunch of 10 million dollar acquisitions it's it's going to take a lot to do right and and we're a smaller company um and we at the end of the day need to need to be almost perfect right we need to bat 10 for 10 when it comes to acquisitions and so it's really important that we get it right so we have broadened from a size standpoint but i think the most important thing is to stay disciplined to the financial criteria and the metrics on the return in our leverage ratios by year two that's pretty well said wasn't it yeah yeah good job alex and i think the only thing i can add to it is that we have gotten to see different size businesses and

Dave Duvall, CEO

sometimes those 10 million dollar businesses just aren't that exciting we won 10 million dollars of skid plates last year just on a single part, single tool, and a process. That's a much more exciting thing than a $10 million acquisition with all the headaches that come along with it, with the integration and everything that goes. So at some point, you've got to have some size to make it worth all the effort and the energy that goes into it. And the other thing I would add is that Mr. Panda has done an outstanding job the last 12 months starting to model our future five years. Now, we can't give you that Excel sheet, but he's taking the information on the wins that Mr. Brands comes up with the hypotheticals and saying, hey, if we win 25 percent of the stuff in that pipeline that Mr. Brands presented you, what would that look like? And it gives us confidence to be able to model, you know, what could we do? Right. And it still stay in a conservative leverage ratio. What could that scale look like? And so I think because of all those new wins, 85 million dollars of launches, we're going to be at a point where you guys are going to look at us and go, what are you doing with the cash to redeploy it? And so we've got to make sure we're ready for that. We're anticipating that question a year from now.

Alex J. Panda, CFO

Yeah, the only other thing that I would add is, as we were visiting smaller companies, management team is critical to the success of the acquisition, right? And when you go visit those smaller companies, the bench strength of companies is not nearly as strong when you start getting into that 50 to 60, $70 million range. so those smaller companies we would have to be us around this table would have to be extremely hands-on um and so that's that also has played a factor in us visiting companies wanted to ask about uh quote win rate um what has it been over say the last 12 months or so versus historic and

Alex Bantz, Other

i do have another sales question after that sure um so when i came in i did a look over the past five years and we were at it like a 20 25 percent win rate we look at it a little bit different now so when we have a new opportunity come in we rank it A's or B's or C's A's are the the top five to eight that everyone in the organization should be aware of as high priority and then B's are that next tranche that there's a lot there and then the C's are the ones that you know we'll treat a little bit differently we'll still quote it maybe but we have an expedited costing process for it, and we just don't treat it the same as the A's and So what I track is the win rate of those A's and B's, and right now we've been at 40 percent over the last 18 months.

Renee Anderson

That's helpful. As you grow the organization, say you achieve the $500 million or you're selling revenues, how do you believe your sales process needs to evolve as you're a larger organization As we grow into that number, certainly the customer experience team becomes more critical because now this is new growth.

Alex Bantz, Other

It's a lot more new customers. The plants are going to be busier, so there's more things that can go wrong on a daily basis as things do. So that team is going to be, from a commercial perspective, that customer experience team, the inside sales team, is going to be more critical, making sure we staff it appropriately and, again, that they're They're paying attention. They're on the ball on the customer scorecards as these new projects roll in. And then also, as we win these projects, I didn't really talk about this, but the business development team, they are involved all the way through the launch until it actually launches. So we don't keep them, we keep them engaged all the way through that so that they can maintain the profitability of those new wins through that entire process. It's cost might creep. And then there's that handoff. So we need to make sure that handoff's smooth. and then the inside sales group is really on the ball and making sure the customers are happy.

Renee Anderson

We'll ask one more question if that works. And I'm going to shift to mission regs. They're supposed to be going to effect here January 1 of 27. What's the update there? I've heard so many different things.

Alex Bantz, Other

We thought you would know.

Dave Duvall, CEO

Yeah, I'm going to be the expert on that. So emissions regulations still on paper, going to effect January 1 of 27. Now, there is a proposal out there that I think is not until November that gets weighed in on officially that says, hey, we're going to slowly transition that evolution through the year of 27. Now, we have there's one trucking OEM that already claims to be meeting 27 standards. Right. And so they're taking that path. We have another OEM that's already announced, I think, publicly, but I'm not sure enough to tell you the name that they were going to offer 26 engine choices in 27 they're already prepping and planning that this is going to be approved and they're going to be able to do that so all of that it just creates confusion is the general take from it and i think it smooths it out it makes it not a big event so i don't think there'll be a big peak and a big trough but i think it smooths it out i think diesel prices and oil and macro events in iran probably outweigh this emissions cycle, at least in the next six months. It's going to be, I mean, I saw diesel at $7 a gallon in Ohio last week, and I don't think I would have ever said I would see that in my life. And so I was, I mean, it's a real thing for the industry of trucking. And every good that you're buying that gets hauled across America in a truck just got more expensive because diesel went to $7. Probably the California or West Coast guys are used to $7, but not in the Midwest. question on the power sports market you've done very well with it you've also emphasized despite the fact that it's very large it's quite an important market with kind of a tough consumer environment why is power sports doing so well for you yeah we're fortunate enough in some of the mix on our power sports so our personal watercraft business hasn't been spectacular this year q1 was actually quite good if you remember our release in first quarter there's a lot of pre-build for this summer season with again diesel prices are seven dollars and gas prices are in the mid fives it's an expensive day out on the lake to take the truck haul the power sport right how to haul the boat over what we get a bit of a tailwind is the cargo boxes so you see that cargo box there for you guys that haven't driven or ridden on one of these vehicles they're on every job site so every job site that's we just drove down to spacex today and see all of that the people are using pickup trucks but they're also using side-by-side vehicles every ai data center job has them on site to ferry people to ferry their equipment that's how they're driving around job sites the cities and municipalities are now instead of buying a pickup truck they're buying a side-by-side vehicle i see people also advance was talking about golf carts we really like the golf cart industry but i see people buying side-by-sides to drive to the grocery store to buy the communion store to drive to dinner you know in the rural parts of the united states people are buying a vehicle that they can haul gear with, go hunting with, drive to the grocery store with. It's just a big overgrown golf cart. And it's surprising to me how many people buy those. We're fortunate because we have doors and cargo boxes on the ones that are used for those jobs versus what I would call sport units, things that people are going to go out just to race just for fun on Saturday or Sunday.

Speaker 3

We have a lot less percentage of those units in the side-by-side market that's a big advantage to us that the cargo boxes oh it's not so much the discretionary right as it is the commercial construction yep and uh and then as you've described right very good that's a big advantage to core in our our large boxes real excited about the smc promise for the future and curious how mike is going to operationalize sort of that

Mike Gayford, COO

quicker quote-to-cash business and how do you look at the proprietary recipes there seems like there would be different ones for everyone and you know give us some color and insight on that we'd love it yeah so obviously we've been preparing for that part of the optimization program is to to focus those resources that we have in in uh columbus more directly on the on the compounding business So we will have, you know, we have like 25 salary personnel in Columbus that are going to be focused on compounding. So we're shifting engineering resources into compounding and continue to look for ways and leveraging that to optimize that. Also in Columbus we have our AME team and our materials group there and we are actively winning business that does require those certifications you're talking about we are going after ul certifications for uh flame retardant for uh uv protection and uh i've been going through that a little bit of a learning process this year on on how we do that effectively um to grow and grow that team and we have uh vanad as our our uh still still with us as our our director who's been in the industry for 40 years that's handing off a lot of that that knowledge to the the next generation that we're developing and then we've made investments in our lab to support that business as well we have just installing a what we call a quv chamber which does the the ultra violet testing on the SMC panel so stuff in the past that we would send out and it would take a lot longer to to turn that around we're bringing those things in-house to support the business as it grows as as a alex's team brings those opportunities into the the plant we're able to turn those around supply data to our customers and release a new formulation i'm going to add something to that being a supplier because i received material from columbus it's great quality i've seen a significant improvement in quality our team is really excited about getting

Arnold Alanis, Other

material and running product and stabilizing that process so now we got our presses all stabilized We understand not only Mexico, it's across the organization and all the plants that feed our material into it. So, great improvement throughout the organization for sure.

Speaker 23

This one is for Alex. You've told us a little bit about the transformation of the sales team and sales people and customer experience people. Give us a bit more detail about how the commercial team is different than it was three years ago in terms of numbers also and numbers of sales people. And maybe what do you think it will be in three years?

Alex Bantz, Other

Sure. I don't want to talk too much about numbers, just for competitive reasons, but I would say, generally speaking, you know, we are heavier on that business development side right now than our customer experience. And to this gentleman's question, I think that will shift over as we win more business. But our organization in general, we've added a fair amount of resources. I'd say 30 percent-ish, somewhere in there, 40% increase in my team. Pretty substantial. And yeah, and mostly focused on that growth. We have added resources dedicated to specific markets, whether that's a market vertical or a regional market. I think it's safe to say we have a person in Mexico that is focused on Mexico. That's new for us. We do have a person for SMC that we've hired recently and we do have an open position for the Con Ag market.

James Crowley, Board Member

So guys, I'm hoping you can help me square a couple revenue numbers um alex panda you've given uh baseline revenue of already launched programs of 225 million dollars versus ttm revenue about 275 million dollars you have known wins of somewhere in like the 85 to 90 million dollar range and um i've heard you say that 310 million dollars or so of revenues in the bag and forgive me if i'm putting words in your mouth there but But then there's also this relatively high confidence, expected wins from the pipeline of another $83 million, and presuming you're not going to stop selling tomorrow, I assume that number goes up, which when put all together, it starts to get you pretty close to your capacity of $450 to $475 million in revenue with your existing footprint. Help us understand how we should be putting all these revenue numbers together, and then and how that affects the urgency to acquire or not.

Alex J. Panda, CFO

That was a lot of numbers. That was impressive. So we're currently working on our 2027 plan. And one of the things that we have started to discuss is we normally wait to give guidance to like March, right? Historically, one thing that I've talked to Sandy about is this year because of the launch of the programs and the increase in product revenue is giving that guidance out earlier, probably more like December. We'll do a separate press release just to provide 2027 guidance. The big thing about the revenue that I would say of the $85 million is going to come down to timing, right? Do programs get approved? What quarters do they launch in? We're currently working on, there's about, of the 85 million there's like four or five really big ones which would drastically shift uh that revenue and when it starts and when it becomes a full run rate so the best example i could give you is the volvo right volvo in mexico it's roughly 12 to 15 million dollars it's forecasted to start in q1 is the new volvo plant in monterey going to be ready starting january 1 of 2027 probably not but what i can tell you is volvo has interest in us selling truck roofs from monterey to the u.s um and so i think that that could be part of it too you're looking at me for an answer

Dave Duvall, CEO

so yeah if you want to add in when you're building a 1.7 million square foot plant that's a big project right they're going to hire 5 000 employees for that volvo plant so we don't know exactly how that launch will look, whether we build roofs and ship them back to the U.S. or ship them to that Mexico. That's what would shift it, I think, would be where you're trying to get, Alex. I think one of the questions you asked to make sure we get the answer to it, the 225 number that you pointed out, why is that very different than the trailing 12 months? It's tooling. So something we, you hear Alex constantly say this, to us it's clear, but we struggle sometimes to communicate this to you all, is that we look at product sales very differently from tooling and project sales their margins are very different one is very very lumpy and it's one time occurrences so we do these really big truck roof programs like the trucks we walked outside and looked at those are 30 million dollar plus tooling jobs and they happen once every 10 years for an oem they're very infrequent versus a product sale where we're selling this selling apart like you see here in the room over and over again day after day week after week those have a very different margin profile and that's the big difference between that trailing 12 month number i don't i

Alex J. Panda, CFO

don't have it memorized 260 and that product sales of 225 and so when he did that walk to 310 that was all in product sales there was no tooling in that walk and that's something i think we're going to work on this year at trying to change the way we present that to you all in the in the street and make sure that it's clear yeah one of the things that on our on our p l and our 10q and 10k right is we have we really just say net sales and then you have to go to footnote five really to see the breakout we're going to start breaking that out on the face of the financials we used to do it actually when i first started but we we got rid of it because we don't normally have large these this large of tooling programs right it only comes once in a while with these large truck programs because it goes every 10 years that's why we did it 12 years ago those giant programs you go oh we need to make sure that's split out but i i would say the you know from an acquisition it's going to come back to being disciplined in our process for the acquisition you mentioned that in your question of okay well all of these sales what does that mean for an acquisition we would rather do organic growth right we have we know our costs we know our customers we we we will get better returns on organic growth so if we have to continue to invest in our company and use our capital for that, we'll take that over doing an acquisition. Where inorganic growth really comes into play, in my opinion, would be to really start to accelerate the diversification of the sales in the end markets.

James Crowley, Board Member

Good. Thank you. You've talked about what has changed around your thinking around acquisitions, but what has changed amongst the potential targets you speak to in terms of their willingness to be acquired?

Alex J. Panda, CFO

You want to take it? You want me? So one thing that we've worked on, I would say, starting this year, a different kind of strategy is before we've worked with some investment bankers on the buy side of who's actually for sale and talking to those companies. what we've started to do is eric and i sat down with with a handful of other people and started to come up with a target list who does core want to buy right not who's for sale who do we want to go after and so we've created that list and then we started reaching out to those companies most companies said hey we're not for sale we don't really want to talk some companies said hey we're not for sale but why don't you come in and talk to us one company actually that we went and visited we got more information on and turns out they were for sale and then we said hey you know we're not as as interested um after after seeing a little bit more behind the the scenes um so i think that strategy has changed to us building relationships for companies we really want to go after in the future and then that way when they make the decision well we are for sale we can be the first call and maybe they don't go through a process right we don't go through a bidding war war against pe we we get a first look and and we put in a bid and if it's good enough then it we we get to buy them um so that's that's a strategy we we've started to take um which is kind of another road that we're walking down while we're working with other investment bankers on who's actually for sale the other thing i would say is there's about four or five really good investment bankers that know the plastics industry and eric and i now have quarterly calls with those investment bankers so we're constantly getting updated on what is going on in the market from a who's for sale who's not for sale type type of deal you've talked a lot about culture how does that play as a competitive advantage as you approach potential acquisition targets if at all that's a that's a great one because we just were working on that a month ago

Dave Duvall, CEO

So there is certainly a culture out there in some entrepreneurs and family-owned businesses that they fear the private equity culture, whether that's justified or not. I'm not sure I'll comment on, but they certainly have heard a lot of stories about people trying to improve profitability and not worrying about culture and not worrying about the employees and just ripping and tearing apart businesses to make them resellable five years later. We certainly see people talk to us about that. So whether it's real or not, the perception out there is very, very real. When we show up and talk about culture and they can go to our LinkedIn or our web page and see the events and the employee things that we do across the business, they all recognize that we really do believe in and care about employee culture. It's something we certainly pitch when we're on some of those visits talking to companies. We have taken Stephanie with us on a few of those trips purposefully because that is as important to us as the financial. So it has been Alex, Stephanie, and I on a few of those trips, at least the initial ones, to make sure we understand what is this business have. And sometimes you can peel off and get some additional information from some of the HR leaders of how they really are working behind the scenes.

Alex J. Panda, CFO

Yeah, and I think the other thing about that is from our employee perspective, it's great, right? Acquisitions will provide growth, bigger company growth opportunities for employees. and so the few that have a look behind the scenes at that and when we talk about acquisitions you know that's an easy kind of sales pitch right that to talk about but I think the the same goes the other way right when when Stephanie can go into that room in our initial conversation and you know on a maybe smaller scale basis do a presentation that is similar to what you guys saw today like there's a track record there you know going into a company and saying hey we have 48 percent internal promotion so you become part of our family odds are you're going

Dave Duvall, CEO

to get promoted um and i think that's a huge selling point right that that's a different a differentiator between us and in some other uh company for sure definitely a competitive advantage yeah the only last thing i'd ask is absolutely every time we go and talk to these companies there's private equity with with deep pocketbooks and a lot of capital to put to work and that is that is definitely a challenge that we see in the industry the last few years i don't think we've gone and looked at a single acquisition maybe one of those half a dozen that he's talking about the private equity wasn't there with a pretty big checkbook at least allegedly whether it closed there or not right that's the question but one other thing and this

Renee Anderson

may just be a misperception of mine but you talk about battery technology and i know you sort of created a center of excellence down gaffney that you're emphasizing for that help me understand what you're doing around battery technology and the battery containers or whatever that is different and allowing this to sort of be a niche, if I'm hearing you correctly.

Dave Duvall, CEO

Yeah, so there's a lot of battery technology out there that uses metal cases, metal boxes. So you can imagine changing it to a composite. I think it would be good to look at that part over there. And when you look really closely and see the way the ribs and channels have been molded into one part, you can't do it with metal. That's what makes SMC an advantage. Now, what makes us unique, maybe if there's some other SMC compounders that can do this also, is how do you also then add flame proofing? So one of the biggest failure modes of a battery is that self-ignition and you guys, I mean, the best videos on the internet are of vehicles on fire and they're very difficult to extinguish. It is a very large amount of energy. So they want them to be fireproof SMCs. So we have developed SMCs that have additives in them that basically release water as that heat activation happens and that can help extinguish thermal events from progressing beyond that one cell right once you start a cell you're probably going to lose that cell the key is not to lose all of them next to it or the vehicle or the building or or something else near it so you get that molded in feature which is why smc is better than a metal part and then you get you know the added benefits of us making a custom compound that improves fire yes so i would just add it's more than just a box I mean it is a critical part of the overall assembly and we don't know the exact number but we estimate that that that battery

Alex Bantz, Other

system back there is tens and tens of thousands of dollars of battery stuff inside so they really are concerned about the quality of the container around it and it really allows us to flex our technical muscles and and show them what we can do versus others.

Sandy Martin, Head of Investor Relations

Any final questions?

Dave Duvall, CEO

Some of the uniquenesses battery guys want leak test when you make a hood we don't leak test a hood believe it or not we don't leak test a boat hull but they want it to be perfectly sealed hermetically sealed because if you leak water salt water spray something off a truck and transportation that would be bad for a battery that's a unique thing that the manufacturing guys have to learn how to do i hope it's not the last question because you may not be able to answer it or willing to answer it But tell us a little bit about the competition that you're facing.

Speaker 23

We know about MFG, STS, CSP, CSP changed ownership. And now they're owned by, I think, a German B company. But what has changed in the last three or four years, whatever period, with these guys? Are they getting stronger? Are they getting weaker? And if you don't want to answer, I'll answer. well, Ansel, high level.

Dave Duvall, CEO

It changes a lot over time. If you go and if you go and look at our friends that were acquired by private equity, they're going through some challenges in some of their plants. Now, not that dissimilar to core five, six, seven years ago, you know, having downtime, press maintenance issues, things like that. Hate it for them as an American manufacturer, but they also have some operations that are running brilliantly that we respect as outstanding composites manufacturer in the industry. You know, we go to composites, you know, industry things. We see the leaders of those businesses there. We know some of the things that are happening. And I would just, you know, this may answer a little bit differently, but I'll summarize that as we want composites to grow. We don't want to wish ill of them because if somebody says, hey, I don't want to make batteries with composites, we all lose. And so we want our composites industry friends to be successful.

Alex J. Panda, CFO

We just like to be slightly more successful than them on some of those projects but you know we win when we convert those concrete wood and metal parts to composites that is where everybody wins and the pie gets big in the composites industry yeah i think the only thing i would add is we've put in business systems over the last five years to compete with anyone in the industry and as long as we follow those processes and stay disciplined we will continue to win programs and stay competitive yeah I agree I'm curious about the cost competitiveness obviously

Tom Cellitti, Chairman

composite lighter weight maybe you know doesn't corrode and all that versus say cement for vaults and that kind of thing I'm just kind of curious whether you can speak to what the competitive pricing advantage is for you and is that what helps you win a contract or whatever yeah on a concrete part the concrete's almost always cheaper as a per pound of concrete now where you get into wins for us is you need backhoes and excavators and cranes to lift precast concrete parts and the composite part maybe one person can pick it up and install it especially in those flush covers and vaults we're talking about parts that are

Dave Duvall, CEO

half the weight sometimes even even even lighter than that and that makes it a very easily installed product that competes.

Mike Gayford, COO

I would also add to that packing density and shipping costs. You're paying weight per truck and with the cost of diesel prices, you can get much more composite parts within that same truck load. So a lot of those competitors will struggle in the shipping side of it where we have advantages with our ability to stack those.

Dave Duvall, CEO

Some of the products we've seen break down so that that they they can have a much higher packing density and then the costs that eric talked about in the field by reducing backhoes and things of that nature is definitely an advantage yeah and just piece price versus total cost of ownership is really what it comes total value and the one you didn't ask that you should have asked is what about metal so you guys nobody asked a tariff question i'm surprised we didn't get a tariff question we practiced our tariff answer but on metal side steel and aluminum have both skyrocketed in the last 12 months now some of that's tariff some of that's canada import and that discussion but that every single one of those increases on those metals is a tailwind for composites and so when we're out there looking at

Sandy Martin, Head of Investor Relations

the trucks we showed you guys some of the aluminum outer panel parts that have historically been out of aluminum for its corrosion resistance there is no reason those shouldn't switch to composites over the next couple years i would suggest some of those tariffs and the cost of steel and aluminum that's probably not going to change this administration to the next that's a great tailwind for composites okay before i turn it back to you eric uh for closing your remarks um arnold i'm gonna put you on the spot for a minute i'm gonna give you my mic while eric gets ready walk us through tomorrow tomorrow we'll get the plant tour everybody's coming in we're gonna be in separate groups which is great but arnold won't be in both groups or all three groups harmony is so give us a quick picture maybe three minutes on what to expect what should we be looking for

Arnold Alanis, Other

where should we be paying attention to and concentrating our time so tomorrow during our tour there'll be two vans leaving the the actual hotel I'll be in one van there's gonna be other groups another van we'll go across the border once we get to the plant the majority of all the staff members which are the managers any staff members are gonna be wearing color white us ourselves we're all gonna be wearing black there's case you have to have any questions there's people that can be answering those questions we'll separate into two groups uh once we get into the plant there'll be two groups we'll start off in an area we'll kind of separate and by the time we come back we're coming back into one location should not be an issue at all we've got all our permits