CMT

Good morning, everyone. Welcome to the Core Molding Technologies Fiscal 2026 First Quarter Financial Results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. As a reminder, this event is being recorded. I'll now turn the conference over to Sandy Martin of Three Part Advisors. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us for the Core Molding Technologies conference call to review our fiscal 2026 first quarter results. Joining me on the call are the company's COO and incoming President and CEO, Erik Palomaki, and CFO, Alex Panda. David L. Duvall, current CEO, will also be on the call for the Q&A session, and this call is being recorded. This call will also be webcast and can be accessed through coremt.com via an audio link on the Investor Relations Events and Presentations page. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading.

Statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance, are forward-looking statements and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are uncertain and outside the company's control. Actual results may differ materially from those expressed or implied, and today's earnings release includes our forward-looking disclosures. Risks, risk factors and other uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Core Molding Technologies assumes no obligation to update or revise any forward-looking statements publicly. Management will refer to non-GAAP measures, including adjusted EPS, adjusted EBITDA, the debt to trailing twelve months EBITDA ratio, free cash flow, and return on capital employed.

Reconciliations to the nearest GAAP measures are available at the end of our earnings release, which has been submitted to the SEC on Form 8-K. Now, I would like to turn the call over to Eric L. Palomaki. Eric L.?

Thank you, Sandy, and good morning, everyone. Our first quarter of 2026 was a busy one. While product revenue was lighter, our team was hard at work executing our growth strategy, delivering $17 million in additional new wins, relocating five of nine presses into our new facility in Monterrey, and posting our best gross margin quarter in over a decade. The Must Win Battle focus on our Mexico expansion is on track, and we continue to execute our flawless launch playbook across 50 already won projects. As this is Dave's last earnings call as CEO, I want to take a moment to recognize and thank him for his tremendous impact on Core Molding Technologies. Working alongside Dave has been a privilege. He has been instrumental in shaping our company culture and in my growth as a leader.

His leadership, integrity, and steady hand helped set the direction of this company, and his mentorship through challenges, milestones, and countless everyday conversations has left a lasting impression. Dave, thank you for your trust, your support, and for setting an example of excellence. As I fully transition into the CEO role this month, we have taken deliberate steps to reinforce operational leadership and continuity, backfilling my COO responsibilities. We have split the COO role into two positions, underscoring our commitment to promoting from within and ensuring organizational readiness. Arnold Alanis now leads our Mexico operations, and Michael Gayford oversees the U.S. and Canada operations. Both leaders exemplify Core's four values: being a learning organization, having the courage to challenge, showing mutual respect, and operating with transparency. Speaking about operations, I wanna once again recognize our teams for their disciplined execution and exceptional service to customers.

In the quarter, we achieved 99.1% on-time delivery and a quality performance of 52 parts per million. In our business of making large, complex composite assemblies, our ability to be trusted with major product launches is a key value proposition and a major reason why Core wins repeat business or why Core is able to grow our wallet share. These results demonstrate our focus on standard work, consistency, and operational excellence. With Arnold Alanis and Michael Gayford leading our operations, I'm able to spend more time with our commercial and financial leaders. As we like to say, our two Alexes. Alex Bantz, Core's Chief Commercial Officer, and Alex Panda, our Chief Financial Officer. If you're looking for me, chances are I'm with one of the Alexes focusing on growing the company.

Turning to the first quarter performance, we are very pleased with the continued momentum of our Invest for Growth initiatives, which generated $17 million in new business wins. We are also pleased to report gross margins exceeding 20%. While this performance reflects strong execution, Alex will provide more color on our full-year margin outlook in a few moments. The $17 million in new business awards included a significant multi-year battery energy storage system project. These battery energy storage systems are becoming more widely used for reducing power loads, coupling with renewable power generation, and adjusting for grid load changes or disruptions. Within transportation, we continue to support specialty electric truck platforms, serving route-based fleets such as postal vehicles, trash trucks, and electric buses, many of which are owned by municipalities.

Some of the newest battery enclosure opportunities we are currently working on are tied to grid reliability applications, including grid hardening and load shedding. While battery adoption has moderated in consumer EVs, demand is expanding rapidly in grid infrastructure, we're engaged with customers and industry partners to capture that growth. To support our sales pipeline, we've added one business development manager during the first quarter and are planning two additional hires this quarter. As part of powersports market, we continue to expand our proprietary skid plate technology, which we developed approximately two years ago and launched in the third quarter of 2025. New wins this quarter include a prominent OEM traditionally known for agricultural and farm equipment, further broadening the application of this technology.

As previously discussed, we are seeing meaningful signs of industry recovery, with major OEMs launching new product features that include additional core molding components across watercraft, skid plates, and cargo boxes. The first quarter marked the third consecutive quarter of year-over-year revenue growth in our powersports market, with a year-over-year growth of 46%. We remain focused on scaling the adoption of Core's SMC offerings and topcoat capabilities, which enable us to serve as a preferred supplier of Sheet Molding Compound , as well as deliver finished installation-ready systems. These value-added capabilities allow us to participate more broadly across the supply chain, supporting applications in construction equipment, agricultural machinery, aerial lifts, and other industrial markets. Our topcoat paint capability differentiates Core by enabling installation-ready systems that reduce total cost and improve manufacturing efficiency for our OEM customers.

Together, these investments expand our technical capabilities, deepen customer integration, and support durable, higher-value revenue streams that align our long-term growth and margin objectives. All of Core's proprietary compounds and SMC materials remain on track and are expected to be in production during the second half of 2026. As we previously discussed, we invested $6.5 million in 2025 to expand our operations in Mexico, including a greenfield facility, and we plan to invest an additional $19 million this year. These projects are ahead of schedule, with all work in Monterrey is expected to be completed by the end of the second quarter. We view Monterrey region as a long-term secular growth market, strategically positioned closer to key customers. Our expansion in Matamoros includes the installation of ultra-large 4,500 ton compression molding presses in Matamoros, continuing through the second half of 2026.

That is 9 million pounds of pressing force per press, or 18 million pounds that will be operational by year-end. We hope you're able to join us in September for our Investor Day, where we'll be able to get up close and see how these massive composite molding systems create 100 plus pound parts for sleeper roof assemblies. Looking ahead, we expect truck market volumes to begin recovering in the second half of 2026, and when combined with the $63 million in new wins secured in 2025, which will launch throughout 2026 and early 2027, we maintain visibility into total product revenue that could exceed $300 million in 2027. As a sole supplier on long-term OEM programs, we benefit from long-term customer relationships that provide strong forecasting visibility while recognizing that macro conditions can influence timing.

With that, I'll now turn the call over to Alex to review financials in more detail.

Thank you, Eric, and good morning, everyone. As expected, first quarter revenues declined by 4.7% year-over-year, driven primarily by previously discussed truck cycle dynamics. In Q1, medium and heavy-duty truck sales represented 34% of Core's total product sales, which is down from 44% in fiscal 2025. As Eric noted, we delivered strong gross margins of 20.4%, an increase of 120 basis points year-over-year and 520 basis points sequentially. This performance was driven by a favorable revenue mix, including a shift away from tooling and toward higher margin product revenue. While pleased with our first quarter margins, we remain comfortable reaffirming our full year gross margin target range of 17%-19%, particularly given the elevated tooling revenue expected in the fourth quarter.

Our powersports end markets continued to expand during the quarter, delivering 45.7% year-over-year revenue growth. This acceleration likely pulled some volume forward from the second quarter as OEMs prepared for spring demand. SG&A expense in the first quarter was $11.2 million or 19.1% of sales, compared with 14.6% in the prior year period. SG&A this quarter included $2.1 million of Mexico expansion related expenses and $924,000 of succession related costs. Excluding these items, normalized SG&A would have been approximately $8.2 million or 14% of sales. Operating income for the quarter was $764,000 compared to $2.8 million in the prior year period, reflecting the SG&A items discussed. Net income was $605,000 or $0.07 per diluted share.

Adjusted EBITDA was $7.3 million or 12.5% of sales, compared to $7.2 million or 11.7% in the prior year period. Operating cash flow for the quarter was a use of $9.2 million, driven by planned investments in our Mexico growth initiatives, including tooling payments, press relocations, and inventory bank bills. Capital expenditures totaled $3.8 million, resulting in an expected negative free cash flow of $13 million, consistent with our budget and investment plan. For the full year, we continue to expect capital expenditures of approximately $25 million-$30 million, with $18 million-$20 million allocated to Mexico organic growth initiatives. These planned investments reflect our confidence in the returns we will earn from our organic growth initiatives and the strong execution delivered by our operating teams.

As of March 31st, our balance sheet remains strong, with total liquidity of $73.5 million, including $23.5 million in cash and $50 million of availability under our revolver and capital credit lines. Term debt totaled $19.3 million, and our debt-to-EBITDA ratio remains below 1x on a trailing twelve-month basis. Return on capital employed was 6.8% or 7.9%, excluding cash, based on trailing twelve-month pre-tax operating income. As new programs launch and asset utilization improves, we expect ROCE to strengthen. Additional details, including GAAP to non-GAAP reconciliations, are available in our earnings release. Our capital deployment strategies prioritizes organic growth with continued disciplined debt and working capital management.

During the quarter, we repurchased 24,545 shares at an average price of $18.62 per share for a total of $457,000. In March, we increased our share repurchase authorization by $6.5 million and intend to continue opportunistically offsetting dilution from equity compensation. For fiscal 2026, we continue to expect the following: one. Total sales to be flat to up approximately 5%, with tooling revenue weighted toward the Q4 ,two. The majority of the $63 million new program wins secured in 2025 we expect to contribute to the second half of 2026 and hit full annualized volumes in 2027. three. We continue to remain cautiously optimistic as we start seeing order builds for truck cycle recovery in the second half of this year.

four, full year gross margins in the range of 17%-19%. five, the company incurred $2.1 million of Mexico expansion-related expense during the first quarter and expects to incur approximately $900,000 in the second quarter. six, during the first quarter, the company incurred $924,000 of succession planning related costs and expects to incur approximately $900,000 more over the balance of 2026, primarily in the second quarter. Switching to a discussion on tariffs and recent oil prices, our customers currently benefit from preferential tariff treatment under the USMCA, which is scheduled for a joint governmental review beginning in July 2026. Any changes could affect demand patterns, and we continue to monitor potential impacts on our customers and end markets.

With respect to recent increases in oil prices, we have contractual mechanisms in place that will allow us to pass through a majority of these costs. With that, I would like to turn it back to Eric.

Thank you, Alex. We are pleased with the progress of our Must Win Battle this year, particularly the execution of our Mexico expansion, which remains on schedule and aligned with our budgeted projections. We believe these organic investments further differentiate Core as a leader in highly specialized, large and ultra-large molded solutions. As we grow, we remain anchored in the fundamentals, operating with the highest standards and discipline around safety, people, quality, delivery, and cost, while staying closely aligned with the voice of our customer. Our business development pipeline continues to exceed $220 million in high-quality opportunities. With $17 million in new awards secured in the first quarter, we are confident in our target of $50 million in new program awards during 2026. Importantly, these wins continue to include customers in new and emerging markets for Core and align well with our strategic diversification priorities.

Target segments include specialized transportation applications for electric vehicles, inner box panels for electric pickup truck platforms, satellite tracking systems, building products, construction and agriculture, increased demand for SMC compounds, and our expanding top coat paint capabilities. We remain highly focused on scaling our execution excellence, leveraging our fixed cost base, optimizing our manufacturing footprint, and strengthening operational discipline across the enterprise. Our commercial organization is energized and fully supported by the broader company. As a result, we continue to make progress towards our long-term objective of $500 million in annual revenue while staying intensely focused on profitability, cash flow generation, and returns on capital employed. While strong demand in our powersports market benefited from some revenue being pulled into the first quarter, we believe the recovery has momentum. Combined with continued wallet share expansion and organic sales growth, we are building commercial momentum.

We are purposefully targeting large, growing, diverse end markets, including construction, energy, industrial, aerospace, and medical. We are increasingly engaging customers earlier in the design cycle. These customers are seeking strategic partners like Core that can deliver design, fabrication, and finished installation-ready systems under one roof, backed by a proven track record of flawless launch execution and reliability. I wanna thank our dedicated employees. Your commitment, skill, and hard work make all of this possible. We are equally grateful to our customers, shareholders, and board for their continued confidence and support as we execute our strategy. As we mentioned last quarter, we will host an Investor Day in Brownsville, Texas on September twenty-ninth and thirtieth. As we prepare for our upcoming Investor Day, this event will also serve as a meaningful moment to celebrate a major milestone for our company. Core's 30-year anniversary.

Our program will include presentations on the afternoon of day one and a tour of our Matamoros facility, including a manufacturing shop floor tour of our manufacturing execution engine on the morning of day two. The facility tour will highlight Core's ultra-large composite manufacturing capabilities, which include two new 4,500 ton presses I spoke about earlier, which we believe are among the strongest in North America. We plan to distribute a save the date in the next couple weeks. If you're interested in attending and do not receive the invitation, please reach out to us. We will participate in the East Coast IDEAS Conference in New York City on June tenth, where we will host a presentation and one-on-one meetings. Please contact us if you'd like to schedule time with management. With that, we'll open the line up for questions. Operator?

Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble the roster. The first question comes from Chip Moore with ROTH.

Hey, good morning. Hey, guys. Thanks for taking the question.

Hey, good morning, Chip.

Hey, how you doing? I wanted to ask, you know, powersports very strong, you know, maybe talk a bit more about I think it sounds like there was a little bit of pull forward, you know, help us size that, you know, and some of the seasonal dynamics. Any thoughts on that market, you know, with just fuel prices, in general and, you know, with that pull forward, just help us think about Q2 impacts, given that, you know, trucking is more of a back half story for pickup.

Overall for powersports, Chip, I'd say we definitely see the recovery of powersports. You know, the bust associated with COVID is back. Dealer inventories are back to what they would call moderate and normal levels. If you look at a lot of our customers, they're very happy with that situation. With our watercraft portion of powersports, we got a pretty good first quarter there. You can see that in the numbers. We wouldn't necessarily expect that to maintain through the, you know, the next few quarters. The skid plate that we launched last year is now at full run rate. That will continue throughout the year. In general, you should see powersports up. Q1 being maybe up a little bit more than what we would expect the rest of the year.

That's not to say a massive decrease in Q2 or anything to expect there. Just a really good first quarter.

Got it. That's helpful. Thank you. And maybe just, you know, on new business, you know, you outlined some of the investments there and targets, just what you're excited about and maybe, you know, the battery opportunity in general. It sounds like you got a nice win there. Just, you know, how large?

Yeah

Do you think that market can be for you?

I'll start on just specifically the awards for the first quarter. One of those was that battery energy system customer, and that's a $9 million a year, and they committed to three years of that volume at a minimum also with us. Very nice. Sometimes we're very excited about the big OEM business that has 5-10 year lengths on it, but having a customer like this commit to three years of volume additionally is a very nice thing to have when we're in these diversified markets. We're working with a couple other customers in the same category of battery energy system, but the 1st one is a pretty sizable one. Of that $17 million, $9 million of it is made up of that customer.

We won another product that leverages the skid plate technology that we developed two years ago. That's worth a couple million in the powersports world. We won another aero truck roof deflector that's worth another $5 million. The nice thing about that one is it's with a truck OEM that we don't do a lot of typical business with, so we're expanding a little bit with some other customers in the truck and transportation space. Really big panels on a roof or an air deflector are perfect for us. That's another very nice project worth about a little under $5 million a year when it launches in 2028.

That's great color. That battery win, that $9 million per year, is this, you know, transport or is this on the grid side that you were referencing?

Yeah, grid side. Stationary batteries where you build a very large bank and building of batteries to load shed or to cover for, different types of energy situations.

Interesting. A great market opportunity for you guys.

Similar technology to like an EV battery, but you don't have the same requirements of crash ratings and things like that. SMC is a perfect composite solution to build a very large battery pack. And then they're just basically stacked in racks, you know. Not in a data center, but sometimes are supporting data centers in terms of instead of generation, like there are a lot of natural gas generators that are added to data centers everywhere. This is an alternative to that. If you thought you needed to cover for an hour of power shortage or three hours of power shortage, you could do it with batteries instead of natural gas generators.

Yeah. No, excellent. To your point, SMC, are you know, effectively getting sold out there, or what are you thinking on future capacity?

We're focused on launching the four that we talked about at the end of last year that we won. We got three more of those still to launch here over the next 90-120 days. That's really the team's focus. We continue to find new customers for SMC compound. Not sold out yet, but, you know, continue to be very bullish in terms of our SMC compound offering.

Excellent. Okay. Mexico sounds like you're running ahead of schedule. Anything to call out there to pay attention to or, you know, all systems go, it sounds like, for completing the year in the near term?

Yeah, all systems go. Our whole executive team and myself spent the week down there two weeks ago, and just super proud of our team and the work that they have done. It's pretty awesome to stand up a building, you know, fill it full of equipment in a just a few short months. They're on schedule and we should have the Monterrey facility basically all moved and consolidated under one roof by the end of the second quarter. We'll start to, you know, get everything consolidated in the third quarter and see those the benefits associated with all of that move in the fourth quarter.

And the Matamoros team has cleared out the space for the Volvo launch that happens in 2027, and all that equipment is being built and will be installed during the third and fourth quarter. Still a lot of work to do there in our Matamoros facility with a lot of that capital investment, and that we'll start to see the returns from that in the second half of 2027 or the first half of 2027 as it launches.

Yeah. Yeah. Okay, great. We'll look forward to late September.

Yeah

Say thanks again to Dave. Dave, if he's out there, thanks very much.

Thanks, Chip. No, I'm here.

Hey, Dave. Yeah. Congrats.

Appreciate it.

look forward to I think we're in a great place.

Yeah, agreed. You've done a good job, look forward to catching up down the road.

All right. Absolutely.

Thank you. The next question comes from Bill Rizello with Tieton Capital.

Thank you. A couple of questions. First of all, relative to the powersport strength, is that tied primarily to the new program wins, or is it primarily a rebound in purchasing because inventories are now at a more reasonable level?

It's both, Bill, and I'll make sure I add color to that. There's definitely a push for watercraft on an annual cycle, so they wanna get those units out there to dealers in the spring 'cause most of North America has sort of a summer boating season. We got a pretty good push there on the watercraft side. Also, the overall recovery of powersports has underlined that we see it in all the mix. It doesn't matter whether it's a off-road vehicle or a watercraft, we see that base increase. I would add one to you as a third portion, a third leg of it. You'll remember the launch of the skid plate technology in Q3 of 2025.

We still are on a year-over-year, so until we get to Q3, year-over-year, we'll be incrementally adding that skid plate technology and now having won another one with another OEM that's gonna use that same technology on another side-by-side that we'll launch in 2027. Very excited to continue to use that, our ability to make that large and ultra large part in a single shot.

If we're hearing you correctly, the powersports market is feeling like it is back to normal after the boom bust COVID, post-COVID. Now we're into what we just call normal cycle tied to powersports. Is that a fair interpolation of your comments?

Yes. That's for Core's version of powersports. Being a consumer myself, I can tell you there are some parts of powersports that probably are still weak. But the fact that our off-road segment is very much on the utility vehicle side. Utility vehicles are still selling very well. The stuff that contractors are using, municipalities, school districts, the people are doing work with them, versus a pure recreation product. Those continue to be very good sellers, and we have a lot of content on those products. We have a good mix in the powersports world.

Great. Thank you. Then I don't want Alex to feel left out here, so I'm going to ask a couple of balance sheet questions, please. Accounts receivable were up significantly from the fourth quarter, then interestingly, the contract liabilities were up a lot also. Wondering if there's some sort of a deferred revenue phenomenon taking place. Alex, would you help us out with those two items, please?

Yes. Good question. That's a direct relation to our billing of a progress payment to Volvo. The large tooling job that will close in Q4 of 2026, we had a progress billing that went out at the very end of Q1, will be paid in Q2, ideally, that offset is down in contract liabilities.

Okay. They're one and the same, essentially.

Correct. Correct.

Great. Thank you both.

Thank you.

Thanks, Bill.

Thank you. Once again, please press star then 1 if you would like to ask a question. The next question comes from Lawrence Baumgartner, a private investor.

Hey, guys. First of all, I gotta say congratulations to David. If you've been around this stock a long time, the last two truck cycles, the stock went down to low single digits, and we seem to have maneuvered through this one pretty successfully through your watch. Congratulations on that.

Thank you, Lawrence. We have a good team.

Yeah, you've really done a great job through this part of the cycle. Question on the Mexico expansion. I just noticed in the financials you threw in, as an addition to the financial statement that Looks like you expensed the expansion down there for, I don't know, $3 million. Would that normally be capitalized? Why would that be an adjustment to earnings?

Yeah. There's a As part of the expansion, we are moving our presses in two locations. In our current Monterrey facility, we are moving six structural foam machines to the new facility in Monterrey, and then our DCPD business that's in Matamoros, that is also moving to the new Monterrey facility. As part of just accounting rules, we have to expense those expenses, mainly because it doesn't add any new value to the piece of equipment. We do review all of those expenses, and if we are doing improvements or upgrades to those machines as part of the move, we will capitalize those. The straight rigging costs on installation and reinstallation, because there's no true value add there, we cannot capitalize those expenses.

They're one-time expenses that we add back for that won't be reoccurring.

Okay. Okay. I guess my second question or last question will be for Eric. You know, when sometimes when you get a new CEO in a company who wants to make a big splash and go out and make a big silly acquisition or often don't turn out to be very successful. I guess I'd like to know what your thoughts are and strategy is. I know we've talked about acquisitions with David in the past, and he's really kept stayed out of that game. I guess I'd like to know what Eric's thoughts are on that going forward.

Sure, Lawrence. Thanks for the question. I think an interesting part to make sure you're aware of is that Dave and I started roughly the same time, 7.5 years ago. Of course, been around the business for all of that time, been part of the executive team on Dave's team, and been part of building the strategy. I don't come in as an outsider, as the new CEO, as you know, you certainly have seen happen in plenty of Fortune 500s right now recently. No big splash, no major change as far as the strategy, as far as our execution engine. Really as far as our customers and our team is concerned.

I am, I'm quite proud of our team as well as the board, as well as David L. Duvall and the succession work that we've done. We haven't surprised anybody, whether it's internal stakeholders, external stakeholders or our customers. We've done a pretty good job staying consistent. I would leave you with no major changes, just a shift and a continuation of the strategy and continue to grow the business and leverage the execution engine that we've worked so hard to protect. Being able to go through a truck cycle the way we have, as you suggested, is a huge, you know, change to the business over the years, and it's putting us in a spot where we can make different decisions and different investments, so.

Okay, good. Good. Thank you very much.

I think you may know this. I think you may know this, Lawrence, but Dave's an advisor for the next 18 months for us as well. He'll continue to be around to be able to advise me, answer questions, support us, in an advisory role through all of 2027.

Yeah. You know, I think one as we've talked about in the past, sometimes just buying back your stocks when it's trading at a really inexpensive valuation is the best thing to do with your, with your really nice balance sheet that you've, that you've accumulated.

Yeah.

Thank you.

We've learned our lesson from not having a strong balance sheet from the beginning.

Yeah. If you remember the last cycle, I hope so.

Yeah. That changes your decision process.

Yeah. Great. Thanks, guys.

Thank you.

Thank you. This concludes the question and answer session. I now would like to turn the conference over to Eric Palomaki for any closing comments.

Thank you for your interest in our company. We look forward to providing an update on our progress when we report our second quarter results in a few months. Have a great day.

Thank you. This concludes today's call conference. Thank you for attending today's presentation. You may now disconnect your lines.

Good morning, everyone. Welcome to the Core Molding Technologies fourth quarter and full year 2025 financial results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I will now turn the call over to Sandy Martin, Three Part Advisors. Please go ahead.

Thank you, and good morning, everyone. We appreciate your joining us for Core Molding Technologies' conference call to review our 2025 results. Joining me on the call today are the company's President and CEO, David Duvall, as well as COO and incoming CEO, Eric Palomaki, and CFO, Alex Panda. This call is being webcast and can be accessed through coremt.com via an audio link on the Investor Relations Events and Presentations page. Today's conference call, including the Q&A session, will be recorded. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading.

I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance or forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are uncertain and outside the company's control. Actual results may differ materially from those expressed or implied. Please refer to today's earnings release for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Core Molding Technologies assumes no obligation to update or revise any forward-looking statements publicly. Management will refer to non-GAAP measures, including adjusted EPS, adjusted EBITDA and debt to trailing twelve months EBITDA ratio, free cash flow, and return on capital employed.

Reconciliations to the nearest GAAP measures are available at the end of our earnings release. Our earnings release has been submitted to the SEC on Form 8-K. Now, I would like to turn the call over to the company's President and CEO, Dave Duvall. Dave?

Thank you, Sandy. Good morning, everyone, and thank you for joining us today. We appreciate your continued interest in Core Molding Technologies. In 2019, we set out to fundamentally transform the organization to create a company with three foundational values. Number one, a winning culture that values team success over individual success. A short story here. It's funny how things can make complete sense after some time. You know, I had a leader tell me many years ago, after me working all night long, getting a plant up and running, that winners win. At the time, I thought, "Whatever," and just wanted to get some sleep. I learned it really is a truth. You create a team that sees themselves as winners, and they enjoy winning enough to overcome all the challenges that you face as a team.

Number two, disciplined execution, which is even more important than a good strategy. Number three, the team values and expects a daily inner drive from every employee to continually improve, learn, and grow. To me, this is the required basic foundation for any high-achieving organization, and we have purposefully driven these values throughout every system in our business. We are more excited than ever by the progress we made and the robust foundation we built to drive sustained growth. Through this transformation, we've implemented more robust operating systems, expanded margins, strengthened the balance sheet, created a deep and capable leadership team, and established a performance-driven culture. With that foundation firmly in place, as proven by our financial performance, we are now focused on leveraging all that we've created to drive growth.

Over the past two years, we have also completed a comprehensive executive leadership transition through a purposeful and structured process. This strategic emphasis on continuity and readiness, supported by extensive training, coaching, and development, will ensure strong alignment, continued financial and operating performance, and ultimately drive long-term success for the company and our shareholders. As previously shared, I plan to officially retire from Core at the end of May, with Eric succeeding me as CEO. I'm incredibly grateful for the opportunity to continue supporting the organization in an executive advisory role through the end of 2027. In that capacity, I'll continue to work closely with Eric, our board, and the broader leadership team to ensure continuity and a smooth and successful transition as they lead the company forward. Looking ahead, I'm confident in Core's long-term direction.

The momentum we built, the recent wins across the business, and the strength of our leadership team reinforces the path we are on as the company continues to drive growth and long-term value creation. With that, I would like to turn the call over to Eric and Alex to discuss our fourth quarter and full-year performance. Eric?

Thank you, Dave, and good morning. I'll begin with a few high-level comments on our 2025 performance and strategic progress. Our Invest For Growth initiative generated $63 million in business wins, successfully executing our must-win battle for 2025. Importantly, the majority of these new wins support our strategic diversification strategy, expanding beyond truck and powersports end markets and strengthening the resilience of our portfolio. Turning to powersports, we are seeing early signs of an industry recovery, which the market now broadly anticipates. Major OEMs launched multiple products with additional Core Molding Technologies content in the form of watercraft, skid plates, and cargo boxes. These new product solutions launched on vehicles in the second half, leading to two consecutive quarters of revenue growth in powersports for 2025. Another area of meaningful progress is our sheet molding compound, or SMC business.

Early in 2025, we established SMC compound as a new sales channel to support the growing building products market, which represents an addressable opportunity of more than $200 million. Our sales and marketing team generated $12 million in annual SMC revenue during the fourth quarter and $21 million for the full year. One-third of these compounds have already been launched, and all of them are scheduled to be in production by the end of the third quarter of 2026. We remain focused on expanding customers' adoption of Core's SMC offerings as a preferred supplier of molding compound. Our Voice of the Customer, or VoC initiative, was instrumental in securing new SMC programs in 2025 and expanding our top coat capabilities at the Monterrey facility.

This value-added capability enables us to deliver finished installation-ready products for construction and agricultural equipment, as well as aerial lifts and other industrial applications. As we previously discussed, we invested $6.5 million in 2025 for the Mexico expansions and Greenfield plant, with plans to invest an additional $19 million in Mexico this year. Construction is well underway, with press pits completed in Matamoros and significant progress on the fabrication of two state-of-the-art 4,500-ton SMC molding presses. Once fully ramped, this capacity is expected to support up to approximately $20 million in annual SMC molded and assembled sleeper roof product revenue. In addition to Core's capital investment, we are also managing our customers' tooling project, which will result in approximately $35 million in tooling revenue. We anticipate completion of this project in Q4 2026.

As planned, we have also begun relocating DCPD presses and low-pressure injection molding operations to Monterrey, positioning these capabilities closer to key growth customers. We continue to view the Monterrey region as a long-term secular growth market with significant strategic potential. Our top coat paint capability further enhances these offerings and creates competitive differentiation by enabling us to deliver installation-ready components, reducing total system cost for OEM customers, and improving manufacturing efficiency. Collectively, these investments significantly expand our technical capabilities, strengthen customer alignment, and create durable, high-value revenue streams that support our long-term growth and margin objectives. Looking ahead to the truck and powersports market, we see recovery in volume starting in the second half of 2026.

When we combine this with the $63 million new wins from 2025 that will be launched during 2026 and into early 2027, we have visibility that total product revenue could exceed $300 million in 2027. Large OEM programs are long term, lasting 5-10 years, which allows us to better forecast growth further into the future than most companies. Turning to the fourth quarter results. Revenue was $74.7 million, representing a 27.8% sequential increase and 19.5% top line growth year-over-year. Higher tooling revenue from recent business wins, combined with strong product revenue on powersports, building products, and other, more than offset the lower truck volumes during the quarter. Adjusted EBITDA margin of 10.2% increased 100 basis points from a year ago.

Cash flow from operations totaled more than $19 million in 2025, following $35 million generated in fiscal 2024. For the full year, we delivered stable gross margins within our targeted 17%-19% range and generated positive year-to-date free cash flow. We also completed our footprint optimization initiative launched at the end of the second quarter. As part of our continued focus on product-level profitability, we consolidated our resin transfer molding, or RTM, operations by selectively relocating programs to other facilities. This action streamlines operations at the originating site and drives further margin improvement. Finally, I am proud to recognize our operational teams for their outstanding execution again this year. We achieved 99% on-time delivery, 62 parts per million quality performance, which is an industry-leading and a strong part of our value proposition.

These results reflect the strength of our team, our operating discipline, and our robust business systems. As part of our strategy, we firmly believe that culture is a competitive advantage here at Core Molding, and this is embedded in how we execute every day. With that, I'll now turn the call over to Alex to review financials in more detail.

Thank you, Eric, and good morning, everyone. As expected, fiscal 2025 revenues declined 9.5%, driven primarily by the continued weakness in the truck sector, which represented 44% of Core's product sales for the year. As Eric noted, despite lower volumes and pressure on operating leverage, we delivered gross margins of 17.4%, reflecting solid margin stability. We compute roughly 100 basis points higher 2025 gross margins when we adjust for hourly related severance and the impact of tooling margins. By maintaining margins within our target range of 17%-19% and tightly managing SG&A costs, we generated $19 million of cash flow from operations for the year.

We were encouraged by fourth quarter net sales of $74.7 million, driven by tooling revenue of more than $19 million. While higher tooling revenue was partially offset by lower product sales overall, this was mitigated by strength in power sports, building products, and industrial and utilities, which helped offset continued truck softness. In the fourth quarter, we generated gross margin of $11.3 million, or 15.2% of sales, which is consistent with our historically lightest sales quarter of the year. Hourly severance costs and tooling margins had approximately 230 basis points unfavorable impact on fourth quarter gross margins. Over the past year, we executed several initiatives focused on operational efficiency, raw material cost, footprint optimization, and overall margin improvement, which helped offset headwinds to margins.

SG&A expense in the fourth quarter was $7.7 million or 10.4% of sales, compared with 14.4% in the prior year period. Excluding severance and executive transition costs of $476,000 incurred in fourth quarter of 2025 and $1,066,000 incurred in the prior year period, SG&A expenses in the fourth quarter of 2025 was $7.3 million or 9.7% of sales, compared with 12.7 in the prior year period. Operating income for the quarter was $3.6 million or 4.8% of sales, up from $0.9 million or 1.4% of sales in the prior year period.

Net income for the fourth quarter was $3.1 million or $0.36 per diluted share, compared to a loss of $39,000 in the prior year. Adjusted EBITDA was $7.6 million or 10.2% of sales for the quarter. For the full year, we generated $19.2 million in GAAP cash from operations. After capital expenditures of $17.3 million, free cash flow was $1.9 million. Looking ahead, we expect sustaining capital expenditures to be approximately $7-$10 million in 2026. Including planned Mexico facility expansion investments of approximately $18-$20 million, we estimate total 2026 capital spending to be in the range of $25-$30 million. We will also incur operating expenses of approximately $2.5 million associated with these expansion projects in the first half of 2026.

We will continue to outline quarterly. As of December 31st, our balance sheet remains strong with total liquidity of $88.1 million, consisting of $38.1 million in cash and $50 million of availability under our revolver and capital credit lines. Term debt totaled $19.7 million, and our debt to EBITDA ratio remains less than one times on a trailing twelve-month basis. Return on capital employed was 8% or 10.2% excluding cash, calculated using trailing twelve-month operating income on a pre-tax basis. As we continue launching new programs, we expect ROCE to improve through stronger top-line leverage and enhanced asset utilization. Additional details, including GAAP to non-GAAP reconciliations, are available in our earnings release. Our capital allocation strategy remains balanced and flexible, with priority given to organic growth, continued disciplined debt and working capital management, and opportunistic share repurchases.

During 2025, the company repurchased 201,999 shares at an average share price of $15.70, with $1.4 million remaining under our authorization. Looking ahead to fiscal 2026, we currently expect the following. One, total sales to be flat to up approximately 5%, with tooling revenue again weighted more heavily toward the fourth quarter. Two, given our 12- to 18-month quote-to-cash cycle, the majority of the $63 million in new wins will impact results during the second half of 2026 and 2027. Three, we continue to be conservative around the truck recovery and agree with ACT forecasts indicating truck cycle recovery starting in the second half of 2026. Four, gross margin in the range of 17%-19% for the full year of 2026.

Lastly, one-time SG&A costs for the year are estimated to be approximately $2.5 million related to Mexico relocation and non-capital construction activities and $1 million related to succession planning. Most of these costs will be incurred during the first half of the year. Finally, while tariffs remain a focus for everyone, our products manufactured in Canada and Mexico remain under USMCA compliance and are currently exempt. We will continue to closely monitor trade developments and their potential impact on our customers and end markets. With that, I'd like to turn it back to Eric.

Thank you, Alex. We are building a world-class engineering and manufacturing solutions organization with a trusted reputation in highly specialized, large and ultra-large molded solutions. We continue to see a strong and expanding pipeline of opportunities and are encouraged by the breadth of engagements across both new and existing customers and end markets. Today, our business development pipeline represents $220 million of quality opportunities, and we are well on our way to securing an additional $50 million in new program awards during 2026. We look forward to presenting and discussing our Q1 wins in May.

We are particularly excited about the 2025 wins because 65% of those wins are in new and emerging markets for Core and align with our deliberate diversification strategy. These strategically targeted markets include inner bed panels for an electric pickup, satellite tracking systems, building products, and specialized transportation applications. Operationally, we remain highly focused on scaling our platform of execution excellence, leveraging our fixed cost base, and optimizing our overall manufacturing footprint. We are energized by the progress we've made and by our $102 million in annualized run rate incremental business wins over the past two years. This has been an outstanding job executing by our sales team and the entire organization behind them. We will continue taking deliberate actions to enhance our operating capabilities and profitability as we execute all of these new launches.

Looking further ahead, we are confident in our ability to achieve $500 million in annual revenue as part of our long-term objective of $500 million and 5%. We will maintain an intense focus on profitability, cash flow, and return on capital employed. Our strategy is rooted in disciplined capital allocation, continuous improvement, operational excellence, and growth. We are confident that this is only the beginning of the continued momentum we are seeing here at Core. We are targeting large, diverse end markets, including construction, energy, industrial, aerospace, and medical, and are increasingly engaging customers earlier in the design cycle. Customers are seeking strategic partners like Core that can deliver design, fabrication, and finished installation-ready components all under one roof. I would like to close by thanking our team for their dedication and execution, which have been critical to the progress we've made throughout the transformation.

We also want to thank our customers, shareholders, and board for their continued confidence in Core Molding and in what we are building together. Finally, we are in the planning stages of an investor day scheduled for this fall. We are targeting September 29th for management meetings and September 30th for a facility tour, which will include a half-day visit to our Matamoros facility with secure private group transportation from Brownsville, Texas. This facility will best showcase our capital investments, which make Core's ultra-large composite manufacturing capabilities the best in North America. We are mindful of safety, logistics, and investor preferences, and details for the visit are still being finalized. Please feel free to reach out with any questions or considerations as we continue to refine our plans. Prior to that, we will be attending the ROTH Conference in California by hosting one-on-one meetings on March 23rd and 24th.

Please contact us if you would like to schedule a meeting or an investor call soon. With that, let's open the line up for questions. Operator?

Thank you. At this time, we'll be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. The first question today is coming from Chip Moore from Roth Capital. Chip, your line is live.

Hey, good morning. Thanks for taking the question. Hey, everybody.

Hey there, Chip.

Hey. Good, Dave. I guess I, you know, maybe for me, on the, you know, the outlook for flat to up 5%, I think you called out you're expecting a decent amount of tooling revenue from the expansion or related to the expansion. Is there a way to help us think about the split or the tooling revenue potential in 2026 embedded in that outlook?

The split will be similar to 2025. Similar split year-over-year, and again, that's mainly due to the Volvo program that we announced in Q2. We'll be forecasted to closing that tooling revenue in Q4 of 2026. Very similar to 2025.

Got it. Yeah, with Q4 being higher.

Correct.

Okay. If we look past that, you know. If you look out to 2027, your visibility is getting better, and markets are showing some encouraging signs. Any way to think about margin potential? You know, obviously 17%-19%, you've been very consistent, but is there ability to, you know, even go beyond that as you get volumes back and with some of the initiatives underway?

Yeah. You know, I think our. You know, we gave the guidance of 0%-5%. Right now we're forecasting, and the visibility we have is we would be closer to 5% in 2026. Now, that's mainly due to the program wins we have, you know, we had. They're gonna launch in the second half of 2026, so we'll get a full run rate in 2027. Then I think you're absolutely correct on the margin. You know, we will start to get leverage back in 2027. I think that could be somewhere between 150-200 basis points. You know, we see low 20s% as possible.

Great. Very helpful.

And- Challenge in 2026.

Yeah.

We know the truck market. We see that coming back at least through ACT. They're saying up about 5%, mainly in the second half. We're seeing power sports already coming back. That's stronger than we thought in the beginning of the year. I think the real benefit that we all see is that with all the launches from last year and launches getting into this year, is how quickly they ramp up.

That's usually the which with a little bit of variability for us relative to how quickly they can ramp up. We can ramp up quick. It's really how quickly can they ramp up.

Yep. That's great. Okay. You know, the SMC progress, great to see. You know, I guess on the go forward, you know, the additional potential for additional opportunity there, you know, what are you seeing in that channel and potential for SMC sales?

Yeah. Chip, we are very successful in the fourth quarter, as we mentioned, and the $21 million of annual run rate won last year. We have a number of projects in the pipeline. Very bullish and confident that that is gonna be a good opportunity. We started that about a year ago, a little over a year ago, we started that project, and it has been very successful. We're confident in it, and we're happy with that decision. We still have some capacity left for the coming year, although we're getting to the point where in the next 12-18 months, we may need to add capacity for compound. That's how successful it's been.

Wow. Okay. Good problem.

Yeah, good problem.

Yeah. Any more update on the expansion? It sounds like everything's tracking well. You know, any big, you know, hurdles or permitting or anything yet to get through, or it looks like it's pretty smooth sailing?

No, been pretty smooth. I will compliment our team in Mexico. They have done just a spectacular job at picking up pieces of machinery the size of the foundations and the installation it takes to put in 30-ton cranes and 4,500-ton presses. I mean, it is massive infrastructure, and they work their tails off over the holidays and Christmas season into January. You know, the new plant is now done. Signs are hanging on it. I think we got some pictures of it out there, but yeah, just doing a great job. Already have moved a couple products. We're already shipping product out of the new facility in Monterrey. As of the last couple weeks, a few loads have actually gone out of that building, which is outstanding.

We're looking forward to show that off later this year to anybody that would like to visit.

Yeah. Fantastic. I look forward to that in the fall and we'll see you in a few weeks in California. I appreciate it. I'll hop back in queue, but thanks very much.

Thank you.

Thank you. The next question is coming from Tom Klugas from Impala Asset Management Tom, your line is live.

Hey, I'm Impala Asset Management today.

All right. Hey, Tom.

Hey, guys. It's Impala Asset Management. Anyways, the spending was quite large for Mexico this year. I guess my question is, next year, does that ramp down a lot? You also started talking about SMC potential expansion. I was sort of surprised to hear that you guys did $21 million this year. My other question on SMC is, you were very specific in the press release for some reason about it being late Q3 SMC ramp, and I didn't understand. It sounded very specific for some reason. I didn't know if there was any commentary around that.

The reason I'm asking about the CapEx is on the new wins, most of that gonna be in the current plants in the U.S., or are you gonna get higher utilization out of the Mexico plants for some of the new business that's being signed? Thanks.

Yeah, great questions. I'll take the first piece of the CapEx. In 2025, we spent roughly $6.5 million on the Mexico expansion project for capital. We're forecasting $18-$20 million in 2026, and that's consistent with what we previously said about $25 million, which I believe we disclosed in Q3 of last year. We're still running at that run rate, and we're looking at $18-$20 million in 2026.

In 27, though, the Volvo project is complete.

That'll be specifically for the Volvo roof program in Matamoros, which will start production in Q1 of 2027.

Yeah.

I'll take the second half of your question on SMC compound, unless

Yep.

Very specifically, we won $21 million of annual run rate wins, not all of those have launched. About one-third have launched, they're in production. I'd say over the last quarter to two, we've been running at a 7 million pounds a year run rate of that product line. There is still testing on some of those, Tom, like we've talked about with some of the large OEMs where product gets validated, and it can take 12-18 months for a project to go into full production. SMC compound is definitely shorter than that. Some of these are 1-3 month type tests, we believe we'll be up in production by Q3 of this year for all of them. That whole $21 million will be in production by the end of Q3.

Some of those tests are like UV tests, where the part has to have 2,000 hours of ultraviolet, you know, sun exposure on it, and there's just no way to speed that up. You just have to wait for that testing to be complete. The third question I think you asked was, from a CapEx perspective, we're working on improving our utilization of our current assets so that we don't need to buy another compounding lines. We have 2 of those in Columbus, Ohio, as I think you remember. We're definitely not going to be doing that in 2026 as we finish all the rest of the CapEx for Volvo that Alex talked about. But by 2027, 2028, we might need to add more additional capacity to do compounding.

More to come there. As we're successful in compounding, that could be a problem where we do wanna add capacity.

Okay. My follow-up is, how much FMC did you guys sell in 2025? Then again, the question was utilization of. All that CapEx in Mexico is 100% Volvo related. I guess what I was trying to understand is it seems like a big number, so I didn't know if any of the new programs would be in Mexico or all the new programs mainly in North America plants.

Uh, of that twenty-five, about-

Something about the six.

Of that 25, about 20 of it.

Yeah, something about the 63. Yep.

Yeah. $25 million in CapEx, $20 of it is, I would say, related to that roof program. $5 million of it is related to the new greenfield plant, the 200,000 sq ft plant in Monterrey. Our additional capabilities that we've talked about, like top coat paint that we have added to that facility, those are things that will absolutely give us more capacity and for other customers outside of that. There's room to grow there in that facility.

Optimizing the footprint in Mexico as well to benefit customers.

Yeah. We relocated a product family to Monterrey. Instead of shipping 180 miles, it will ship 1 mile. Yeah. I think the other thing, Tom, and I know we've talked about this in previous conversations, is the Volvo, you know, our Volvo contract, we put some protection in there on our capital spend. If volumes, you know, don't hit certain levels, our capital spend is protected through our contract with Volvo.

Reimbursed.

Okay. The SMC for 2025, do you guys have a number on that or no?

Of that $63 million of new wins, $21 million of the new wins were SMC compound.

No, I was asking how much of the revenue for this year. Was there any revenue from SMC in 2025?

Yeah. We don't specifically disclose that. Trying to think of how to answer that. What Eric just-

Follow-up question.

Yeah. What Eric said is a third. A third of it is already launched and was recognized in our 2025 numbers. The other customer that we sell to, Tom, is Yamaha. You could go look at the major customer footnote, and some of that is SMC sales. Not all of it, but a good chunk is SMC sales.

Okay. All right. Thanks, guys. It's going well.

Thanks, Tom.

Great, I appreciate it.

Appreciate it.

Thanks, Tom.

Thank you. Once again, it will be star one on your phone if you wish to ask a question on today's call. The next question will be from Bill Dezellem from Titan Capital. Bill, your line is live.

Thank you. Two different questions. First of all, relative to SG&A, would you please talk about the drivers that led to you being able to lower your SG&A as much as you did in Q4 versus Q4 a year ago, please?

Last year during Q4, we did a pretty big layoff that was part of it. The other piece, and it's in our earnings release, is our year-over-year severance costs in Q4. In the previous year, we had $1 million, and in the current period was only $ half a million.

In addition to that, was there any meaningful structural adjustment to SG&A? I guess to some degree there would have been with the layoffs, that would have been a function of potentially impacted. I'll let you answer the question.

Yeah. You know, moving forward, our SG&A run rate we're looking at is somewhere between $30 million and $32 million. Now in 2026, you will need to add in the one-time cost that we're disclosing in our press release. The $2.5 million related to the Monterrey facility that we won't be able to capitalize, and then an additional $1 million related to succession planning costs.

Thank you. Secondarily, would you please talk in some more detail about what's happening with powersports and that uptick? I know that you'd said, you know, there was an SMC win there. You referenced powersports coming back, but I'm hoping that you can provide more details around the dynamics behind the powersports market rebounding and maybe more on that Yamaha SMC win.

Start with the highest level, the general powersports market. There was that COVID boom back in 2021, 2022, then a lull into, let's say, 2024, 2025. We're starting to see that come back. Just the total quantity of vehicles being produced, that inventory at dealerships that has to get sold, you know, sort of that used market, having some pent-up demand for vehicles. That has kind of gotten through the pipeline, I'll say, right? It's back to a normal run rate. Their assembly plants are building more personal watercraft, more side-by-sides, more ATVs than they were a year ago. You got that macroeconomic support. On a very acute scale, we launched a number of platforms over the last year.

Some of those were in some of our investor decks and platforms like a skid plate. You might remember, Bill, we talked about that's now in full production and running, as well as a new cargo box and another ATV with a cargo box and the SMC for one of the Yamaha watercraft. All of those launched last year. All of those, you know, are incremental brand new wins because they're on a new vehicle or a new part on a vehicle that we already had a part on. All of that supports our powersports growth. Kind of that grow wallet share that we always talk about. We go back to those customers that we've won product with before and sell them another product.

We're good at that, and they're good at buying parts from us, you know, and we're good at working with their engineers and getting early in that design phase.

That's really helpful, Eric. As you look at those design wins tied to a more supportive market backdrop, would you anticipate that each and every quarter in 2026 that powersports will be up from the corresponding quarter in 2025?

2026 over 2025? My guess is yes, though incremental over the prior twelve months, but I'm looking at Alex to make sure.

Yeah. I mean, for the full year, we would forecast that it'll be up, especially given what we've seen so far in 2026. To sit here and tell you, "Hey, every single quarter is going to be up," I don't know that off the top of my head. Yes, for the full year.

Just taking that one step further, that you don't know of anything specific in terms of customer plans, et cetera, that would lead to a quarter to be down, but you're just wanting to be practical in answering the question. Is that what I'm hearing?

Correct.

That's a good definition of how we answer questions.

In Q1 and Q2 should be up because of the skid plates. The skid plates launched in Q3 of 2025, so Q1 and Q2 should be up, and then, you know, we'll just see where the powersports demand is in the second half of the year.

I think we still see strong sales in the, you know, more of the industrial side of the ATVs, like the Ranger and things like that, side-by-sides and work trucks.

Great. Thank you all, and congratulations on a solid quarter.

Thanks, Bill.

Thanks, Bill.

Thank you. There were no other questions at this time. I would now like to hand the call to Eric Palomaki for closing remarks.

Thank you for your continued interest in our company. We look forward to providing an update on our progress when we report our first quarter results in a couple of months. Have a great day.

Thank you. This does conclude today's conference, and you may disconnect your lines at this time. Thank you for your participation.