10 May 2002
10 May 2002
Core Materials Corporation today announced results for its first quarter ended March 31, 2002.
Net sales for the first quarter of 2002 were $20,297,000 compared with $19,099,000 in the same quarter of 2001, an increase of 6%. However, excluding the Company's Mexico operation, established in October 2001, sales declined 15%.
""We are pleased with the results of the first quarter,"" said James L. Simonton, president and chief executive officer. ""Even though sales in our base business continued to be soft, we were able to increase our consolidated sales as a result of business from our newly established operation in Mexico. More importantly, we generated our largest quarterly profit in eight quarters,"" he said.
""Our concentrated focus on process, productivity and lowering our breakeven point is beginning to pay off,"" said Simonton. Gross margins have improved at all locations due to improvements in material costs, scrap reductions, labor efficiencies, reduced energy costs and general manufacturing process improvements. Management has also been successful in reducing overhead and selling, general and administrative costs by cutting expenses and downsizing the workforce. The reductions in selling, general and administrative expenses were partially offset by investments in the infrastructure necessary to support the newly established operations in Mexico. It is expected that these costs will continue to grow as this operation is established.
Sales of compression molded products from the Columbus, Ohio, and Gaffney, South Carolina, operations continue to be soft. Sales of compression molded products to truck manufacturer customers were down 8% versus the first quarter of 2001, while sales of personal watercraft products were down 27%. The sales declines in both of these areas are primarily a result of the economic conditions that have affected these markets. There are some signs that these markets may be beginning to recover, although considerable uncertainty remains.
In addition to sales of $4.1 million from the newly established Mexico operation, the Company benefited from a full quarter of sales to a Tier 1 automotive supplier for a program that began late in the first quarter of 2001. These sales were partially offset by a decrease in sales to an agricultural equipment manufacturer due to this business being re-sourced in mid-2001, as previously announced.
""We are encouraged that the productivity and cost control measures we have implemented are showing positive results,"" said Simonton. ""We intend to continue to focus on improving these areas to achieve more appropriate levels of profitability needed to support our business and provide appropriate returns to our shareholders. Additionally, while our newly established operations are proceeding as planned, efforts will continue to stabilize and grow this operation. In light of the continued uncertainty in the markets we serve, we believe our efforts to stay lean and focused on improving our operations will position Core Materials well for the upturn, when it comes.""
Core Materials Corporation is a compounder of sheet molding composites (SMC) and molder of fiberglass reinforced plastics. The Company's processing capabilities include the compression molding of SMC, vacuum assisted resin infusion molding, spray up and lay up processes. The Company produces high quality fiberglass reinforced, molded products and SMC materials for varied markets, including medium and heavy duty trucks, automobile, personal watercraft and other commercial products. Core Materials, with its headquarters in Columbus, Ohio, operates plants in Columbus, in Gaffney, South Carolina, and in Matamoros, Mexico.
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