Core Molding Technologies - 10-K annual report 2020

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-K

(Mark One)

☑

ANNUAL

REPORT PURSUANT

TO SECTION

13 OR

15(d) OF

THE SECURITIES

EXCHANGE ACT

OF 1934

For the fiscal year ended

December 31, 2020

☐

TRANSITION

REPORT PURSUANT

TO SECTION

13 OR

15(d) OF

THE SECURITIES

EXCHANGE ACT

OF 1934

For the transition period from ___________ to ____________

Commission file number

001-12505

CORE MOLDING TECHNOLOGIES, INC

(Exact name of registrant as specified in its charter)

Delaware

31-1481870

(State or other jurisdiction

incorporation or organization)

(I.R.S. Employer Identification No.)

800 Manor Park Drive

Columbus

Ohio

43228-0183

(Address of principal executive office)

(Zip Code)

Registrant's telephone number, including area code:

(

614

)

870-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol (s)

Name of each exchange on which

registered

Common Stock, par value $0.01

CMT

NYSE American LLC

Preferred Stock purchase rights, par

value $0.01

N/A

NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known

seasoned issuer, as defined in Rule 405

of the Securities Act. Yes

☐

☑

Indicate by check mark

if the registrant is

not required to file

reports pursuant to Section

13 or Section 15(d)

of the Act. Yes

☐

☑

Indicate by check mark whether the registrant (1)

has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934

during the preceding

12 months (or

for such shorter

period that the

registrant was required

to file such

reports), and (2)

has been subject to such filing requirements for the past 90

days.

Yes

☑

☐

Indicate by check mark whether

the registrant has submitted electronically,

every Interactive Data File required

to be submitted

and posted pursuant to Rule

405 of Regulation

S-T during the preceding 12

months (or for such shorter period that the registrant

was required to submit and post such files).

Yes

☑

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller

reporting company. See the

definitions of “large

accelerated filer,” “accelerated

filer” and “smaller reporting

company”

in Rule

12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☑

(Do not

check if a

smaller

reporting company)

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to

use the extended transition period for

complying with any new or revised

financial accounting standards provided

pursuant to Section 13(a) of

the Exchange Act. Yes

☐

☑

Indicate by

check mark

whether the

registrant has

filed a

report on

and attestation

to its

management’s assessment

of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))

by the registered public accounting firm that prepared or

issued its audit report.

☐

Indicate by check mark whether the registrant is a shell company (as defined

in Rule 12b-2 of the Act). Yes

☐

☑

As of June

30, 2020,

the aggregate market value of

the registrant's voting and non

-voting common equity held

by non-affiliates

of the registrant

was approximately $

22,061,000

, based upon

the closing sale

price of $4.12

on the NYSE

American LLC on

June

30, 2020

the last business

day of registrant's

most recently completed

second fiscal

quarter.

As of March

10, 2021,

the

latest practicable date,

8,476,047

shares of the registrant’s common stock

were issued, which includes

507,835

shares of unvested

restricted common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the

registrant's 2021

definitive Proxy Statement

to be filed

with the Securities

and Exchange Commission

no later

than 120 days after the end of the registrant's fiscal year are incorporated

herein by reference in Part III of this Form 10-K.

CORE MOLDING TECHNOLOGIES, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Part I

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosure

Part II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchase of Equity

Securities

Item 6. Selected Financial Data

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Part III

Item 10. Directors, Executive Officers, and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships, Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

Item 15. Exhibits and Financial Statement Schedules

Item 16. Form 10-K Summary

Part IV

Signatures

Exhibit 23

Exhibit 24

Exhibit 31(a)

Exhibit 31(b)

Exhibit 32(a)

Exhibit 32(b)

EX-101 INSTANCE DOCUMENT

EX-101 SCHEMA DOCUMENT

EX-101 CALCULATION LINKBASE DOCUMENT

EX-101 LABEL LINKBASE DOCUMENT

EX-101 PRESENTATION LINKBASE DOCUMENT

EX-101 DEFINITION LINKBASE DOCUMENT

Table of Contents

PART I

ITEM 1. BUSINESS

HISTORICAL DEVELOPMENT OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.

In 1996, RYMAC Mortgage

Investment Corporation (“RYMAC”) incorporated Core

Molding Technologies, Inc. (“Core

Molding

Technologies” or the “Company”), formerly known as Core Materials

Corporation before changing its name on August

28, 2002,

for the purpose of acquiring the

Columbus Plastics unit of Navistar, Inc.

(“Navistar”), formerly known as International

Truck &

Engine Corporation. On

December

31, 1996, RYMAC

merged with and into

the Company, with the

Company as the surviving

entity. Immediately after

the merger, the

Company acquired substantially

all the assets

and liabilities of

the Columbus Plastics

unit from Navistar in

return for a

secured note, which has

been repaid, and

4,264,000 shares of newly

issued common stock

the Company. On

July

18, 2007, the

Company entered into

a stock repurchase

agreement with Navistar,

pursuant to which

the

Company repurchased 3,600,000 shares of the Company’s

common stock, from Navistar.

On August

16, 2013, Navistar sold its

remaining 664,000 shares of common stock in a series of open market

sales.

In 1998, the Company opened a second compression molding plant located in Gaffney, South Carolina as part of the Company’s

growth strategy to expand its customer base. This facility

provided the Company with additional capacity and a strategic location

to serve both current and prospective customers.

In October 2001,

the Company incorporated

Core Composites Corporation as

a wholly owned subsidiary

under the laws of

the

State of Delaware. This entity was established for the purpose of holding and establishing operations for Airshield Corporation’s

assets, which the Company

acquired on October

16, 2001 (the “Airshield

Asset Acquisition”) as

part of the Company’s diversified

growth strategy.

Airshield Corporation

was a

privately held

manufacturer and

marketer of

fiberglass reinforced

plastic parts

primarily for

the truck

industry. The

Company purchased

substantially all

of the

assets of

Airshield Corporation

through the

United States Bankruptcy Court

as Airshield Corporation

had been operating under

Chapter 11 bankruptcy protection

since March

2001.

In conjunction

with establishment

of operations

for the

assets acquired

in the

Airshield Asset

Acquisition, the

Company

established a Mexican

subsidiary and leased

a production facility

in Mexico. In

October 2001,

the Company (5%

owner) and

Core Composites Corporation (95%

owner) incorporated Corecomposites de

Mexico, S. de R.L. de

C.V. (“Corecomposites”) in

Matamoros, Mexico. Corecomposites was organized to operate under a maquiladora

program whereby substantially all products

produced are exported back to

Core Composites Corporation which sells

such products to United States

based external customers.

In June

of 2009, the Company

completed construction and took

occupancy of a new

production facility in Matamoros,

Mexico

that replaced its leased facility.

In August 2005, the

Company formed Core

Composites Cincinnati, LLC,

("Core Composites

Cincinnati") a Delaware

limited

liability company and wholly

owned subsidiary of the

Company. This entity was

formed for the purpose

of establishing operations

and holding assets

acquired from the

Cincinnati Fiberglass Division

of Diversified Glass

Inc., which the

Company acquired in

August 2005. The Cincinnati Fiberglass Division

of Diversified Glass, Inc. was

a privately held manufacturer and

distributor of

fiberglass reinforced plastic

components supplied primarily

to the heavy

-duty truck market.

As a result

of this acquisition,

the

Company leases a manufacturing facility in Batavia, Ohio.

In March 2015,

the Company acquired

substantially all of

the assets of

CPI Binani, Inc.,

a Minnesota based

manufacturer and

producer of

direct long

fiber thermoplastic

products, and

a wholly owned

subsidiary of

Binani Industries

Limited, located

Winona, Minnesota ("CPI"). The purpose of the acquisition was to increase the Company's process capabilities and diversify the

Company's customer base.

On January

16, 2018, 1137925

B.C Ltd., subsequently

renamed Horizon Plastics

International Inc., a

wholly owned subsidiary

of the Company, entered into an Asset Purchase Agreement (the "Agreement")

with Horizon Plastics International Inc.,1541689

Ontario Inc., 2551024

Ontario Inc. and Horizon

Plastics de Mexico, S.A.

de C.V. (collectively "Horizon

Plastics"). Pursuant to

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the terms of

the Agreement the

Company acquired substantially all

of the assets

and assumed certain liabilities

of Horizon Plastics.

Horizon Plastics is a

custom low-pressure structural plastic molder, which

utilizes both structural foam and

structural web process

technologies, operating within two

manufacturing facilities located in

Cobourg, Canada and Escobedo,

Mexico. The purpose of

the acquisition was to increase the Company's process capabilities to include structural

foam and structural web molding, expand

its geographical footprint, and diversify the Company's customer base.

DESCRIPTION OF BUSINESS OF CORE MOLDING TECHNOLOGIES, INC.

Certain statements

under this

caption of

this Annual Report

on Form

10-K constitute

forward-looking statements

within the

meaning of the

federal securities laws.

As a general

matter,

forward-looking statements

are those focused

upon future plans,

objectives or performance as opposed to historical items and include statements of

anticipated events or trends and expectations

and beliefs relating to matters

not historical in nature. Such

forward-looking statements involve known

and unknown risks and

are subject to

uncertainties and factors relating

to Core Molding

Technologies' operations and business

environment, all of

which

are difficult to

predict and many

of which are

beyond Core Molding

Technologies' control. Words

such as “may,” “will,”

“could,”

“would,” “should,”

“anticipate,” “predict,”

“potential,” “continue,”

“expect,” “intend,”

“plans,” “projects,”

“believes,”

“estimates,” “encouraged,” “confident”

and similar expressions are

used to identify

these forward-looking statements.

These

uncertainties and factors could cause

Core Molding Technologies'

actual results to

differ materially from

those matters expressed

in or implied by such forward-looking statements.

Core Molding Technologies

believes that

the following

factors, among

others, could

affect its

future performance and

cause

actual results to differ materially from those expressed or implied by forward-looking statements made in

this Annual Report on

Form 10-K: business conditions in the plastics, transportation, marine and commercial

product industries (including changes in

demand for truck production); federal and

state regulations (including engine emission regulations); general economic,

social,

regulatory (including foreign

trade policy)

and political

environments in the

countries in

which Core Molding

Technologies

operates; the

adverse impact

of coronavirus

(COVID-19) global

pandemic on

our business,

results of

operations, financial

position, liquidity or cash flow, as well as

impact on customers and supply chains; safety and

security conditions in Mexico and

Canada; fluctuations in

foreign currency exchange rates;

dependence upon certain

major customers as

the primary source of

Core Molding Technologies’

sales revenues; efforts

of Core Molding

Technologies to expand

its customer base;

the ability to

develop new and innovative products and to diversify markets, materials

and processes and increase operational

enhancements;

ability to accurately

quote and execute

manufacturing processes for new

business; the actions

of competitors, customers,

and

suppliers; failur

of Core

Molding Technologies’

suppliers to

perform their

obligations; the

availability of

raw materials;

inflationary pressures; new

technologies; regulatory

matters; labor

relations; labor

availability; a

work stoppage

or labor

disruption at

one of our

union locations or

one of our

customer or supplier

locations; the

loss or inability

of Core Molding

Technologies to attract and

retain key personnel; the Company's

ability to successfully identify,

evaluate and manage potential

acquisitions and to benefit from and properly integrate any

completed acquisitions; federal, state and local

environmental laws

and regulations; the

availability of sufficient

capital; the ability

of Core Molding

Technologies to provide

on-time delivery to

customers, which may require additional shipping expenses to ensure on-time delivery or otherwise result in late fees

and other

customer charges; risk of cancellation or rescheduling of

orders; management’s decision to pursue new

products or businesses

which involve additional costs,

risks or capital expenditures;

inadequate insurance coverage to

protect against potential

hazards;

equipment and machinery

failure; product liability

and warranty claims;

and other risks

identified from time

to time in

Core

Molding Technologies’ other public documents on file with

the Securities and Exchange Commission, including those

described

in Item 1A of this Annual Report on Form 10-K.

Core Molding Technologies

and its subsidiaries

operate in one

operating segment as

a molder of

thermoplastic and thermoset

structural products. The

Company's operating segment consists of two component

reporting units, Core Traditional and Horizon

Plastics. The Company offers customers a wide range of manufacturing processes to fit various

program volume and investment

requirements. These processes

include compression

molding of sheet

molding compound

("SMC"), bulk

molding compounds

("BMC"), resin

transfer molding

("RTM"), liquid

molding of

dicyclopentadiene ("DCPD"),

spray-up and

hand-lay-up, direct

long-fiber thermoplastics ("D

-LFT") and structural

foam and structural

web injection molding

("SIM"). Core Molding

Technologies serves

a wide

variety of

markets, including the

medium and

heavy-duty truck,

marine, automotive,

agriculture,

construction, and

other commercial

products. The demand

for Core

Molding Technologies’

products is

affected by

economic

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conditions in the United

States, Mexico, and

Canada. Core Molding Technologies

’

manufacturing operations have a

significant

fixed cost

component. Accordingly,

during periods

of changing

demand, the

profitability of

Core Molding

Technologies’

operations may change proportionately more than revenues from operations.

Structural plastics compete largely against metals and have the strength

to function well during prolonged use.

Management

believes that structural plastic components offer many advantages

over metals, including:

●

heat resistance;

●

corrosion resistance;

●

lighter weight;

●

lower cost;

●

greater flexibility in product design;

●

part consolidation for multiple piece assemblies;

●

lower initial tooling costs for lower volume applications;

●

high strength-to-weight ratio; and

●

dent-resistance in comparison to steel or aluminum.

The largest

markets for

structural plastics

are transportation

(automotive and

truck), agriculture,

construction, marine,

and

industrial applications. As of December

31, 2020, the Company operated seven production facilities

in Columbus, Ohio; Batavia,

Ohio; Gaffney, South

Carolina; Winona, Minnesota; Matamoros

and Escobedo, Mexico;

and Cobourg, Canada,

which produce

structural plastic products.

Our manufacturing facilities utilize

various production processes; however,

end products are similar

and are

not unique to

a facility or

customer base.

Operating decision

makers (officers of

the Company)

are headquartered

Columbus, Ohio

and oversee

all manufacturing

operations for

all products

as well as

oversee customer

relationships with

all

customers. The Company supplies structural plastic products to truck manufacturers, automotive suppliers, and manufacturers of

marine and other commercial products.

In general, product growth and diversification are achieved in several different ways:

(1) resourcing of existing structural plastic

products

from another supplier

by an original

equipment manufacturer

(“OEM”); (2) obtaining

new structural plastic

products

through a selection process in which an OEM

solicits bids; (3) successful marketing of structural

plastic products for previously

non-structural plastic applications;

(4) converting alternative materials

to structural plastics; (5)

successful marketing of

structural

plastic products to OEMs outside

of our traditional markets; (6)

developing of new materials, technology and

processes to meet

current or

prospective customer

requirements; and

(7) acquiring

an existing

business. The

Company's efforts

continue to

directed towards all seven areas.

MAJOR COMPETITORS

The Company believes that it

is one of the largest

compounders and molders of

structural plastics using the

SMC, RTM, spray-

up, hand-lay-up, D-LFT and SIM molding processes in North America.

The Company faces competition from a number of other

molders including, most significantly,

Molded Fiber Glass Companies,

Continental Structural Plastics, Ashley

Industrial Molding,

René Matériaux

Composite Ltée

("RMC"), STS

Group and

The Composites

Group.

The Company

believes that

it is

well

positioned to compete

based primarily

on manufacturing capability

and location, product

quality, engineering capability,

cost,

and delivery.

However, the industry remains

highly competitive and some of

the Company's competitors have

greater financial

resources, research and development facilities, design engineering, manufacturing,

and marketing capabilities.

MAJOR CUSTOMERS

The Company had

five major customers

during the year

ended December

31, 2020, Universal

Forest Products,

Inc. (“UFP”),

Navistar, Inc. (“Navistar ”), PACCAR, Inc. (“PACCAR”), Volvo Group North America, LLC (“Volvo”), and BRP, Inc. (“BRP”).

Major customers are

defined as customers

whose sales individually

consist of more

than ten percent

of total sales

during any

annual or interim reporting

period in the

current year. The loss

of a significant portion

of sales to these

customers could have

material adverse effect on the business of the Company.

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The North American truck

market in which

Navistar, Volvo, and

PACCAR compete is

highly competitive and

the demand for

heavy and

medium-duty trucks

is subject

to considerable

volatility as

it moves

in response

to cycles

in the

overall business

environment and

is particularly

sensitive to

the industrial

sector, which

generates a

significant portion

of the

freight tonnage

hauled.

Truck demand also depends on general economic conditions, among other

factors.

UFP supplies products to three

industry segments:

retail, industrial, and construction.

These are a highly

-competitive markets,

with suppliers

competing for

a share

of available

shelf space

at large

“big box”

retailers and

independent contractors.

As a

discretionary product category, suppliers must also strive continuously to differentiate their products with unique designs,

colors,

and features, in addition

to maintaining a

constant focus on

cost reduction.

Demand for these products

is driven by residential

and commercial construction and general economic conditions, among other

influences.

BRP provides a portfolio of industry-leading

products comprising of snowmobiles,

watercraft, on and off-road vehicles,

marine

propulsion systems as

well as engines for

karts, motorcycles and

recreational aircraft.

Demand for these products

is driven by

consumer demand and general economic conditions.

Relationship with Navistar

The Company has

historically had a

Comprehensive Supply Agreement with Navistar

that provides for

the Company to be

the

primary supplier of Navistar’s original

equipment and service requirements

for fiberglass reinforced parts,

as long as

the Company

remains competitive in

cost, quality, and

delivery.

The Company's current

Comprehensive Supply Agreement with

Navistar is

effective through November

2, 2021.

The Company makes

products for

Navistar's Springfield,

Ohio; Tulsa, Oklahoma;

and Escobedo,

Mexico assembly plants,

well as aftermarket

products for

service distribution centers.

The Company works

closely on new

product development

with

Navistar's engineering

and research

personnel.

Products sold

to Navistar

include hoods,

roofs, air

deflectors, cab

extenders,

fender extensions, splash

panels, and other

components.

Sales to Navistar

amounted to approximately

18%, 20%,

and 20% of

total sales for 2020, 2019, and 2018,

respectively.

Relationship with Volvo

The Company has a Price Agreement with Volvo that governs supply of parts, pricing and payment terms.

The Price Agreement

with Volvo

is effective

through December

31, 2023.

The Company

makes products

for Volvo’s

New River

Valley (Dublin,

Virginia) and

Macungie, Pennsylvania

assembly plants,

as well

as aftermarket

products for

service distribution

centers.

The

Company works

closely on

new product

development with

Volvo’s engineering

and research

teams. Products

sold to

Volvo

include hoods, roofs,

sunvisors, air deflectors,

cab extenders and

other components. Sales to

Volvo amounted to approximately

12%, 17%, and 17% of total sales for 2020, 2019, and 2018, respectively.

Relationship with PACCAR

The Company has a Long-Term Supply Agreement with PACCAR that governs supply of parts, pricing and payment terms.

The

Agreement is effective

through November 30,

2023. The Company makes

products for PACCAR's

Chillicothe, Ohio; Denton,

Texas; Renton,

Washington; St.

Therese, Canada;

and Mexicali,

Mexico assembly

plants, as

well as aftermarket

products for

service distribution centers.

The Company also

works closely on

new product development

with PACCAR's engineering

and

research personnel.

Products sold

to PACCAR

include hoods,

roofs, back

panels, air

deflectors, air

fairings, fenders,

splash

panels, cab extenders, and other

components.

Sales to PACCAR amounted to

approximately 13%, 16%, and

16% of total sales

for 2020, 2019, and 2018, respectively.

Table of Contents

Relationship with UFP

The Company

manufactures a

line of

outdoor living

and home

decor products

as part

of UFP's

broad offerings

to "big

box"

retailers. These products

are labeled and

packaged for direct

placement onto retail

shelves and are

shipped to UFP distribution

facilities primarily throughout North

America. The Company works

directly with UFP

on innovative product advances

that reduce

cost and extend

the appeal of

the products to

consumers. Sales to

UFP amounted to approximately

17%, 9%, and

10% of total

sales for 2020, 2019, and 2018, respectively.

Relationship with BRP

The Company manufactures molded products for BRP's assembly plants located in

Queretaro and Juarez, Mexico.

Products sold

to BRP include various molded components to support the assembly of personal watercraft and all-terrain vehicles. Sales to BRP

amounted to approximately 10%, 7%, and 6% of total sales in 2020,

2019 and 2018, respectively.

OTHER CUSTOMERS

The Company

also produces

products for

other truck

manufacturers, the

automotive industry,

marine industry,

commercial

product industries, and various

other customers and industries.

Sales to these customers

individually were all less

than 10% of

total sales for interim and annual reporting during 2020.

Sales to these customers amounted to approximately 31% of total sales

for each year ended 2020, 2019, and 2018.

GEOGRAPHIC INFORMATION

Substantially all

of the Company's

products are

sold in U.S.

dollars.

The following

table provides

information related

to the

Company's sales by country, based on the ship to location of customers'

production facilities, for the years ended December

31:

2020

2019

2018

United States

136,424,000

178,953,000

181,207,000

Mexico

64,942,000

79,761,000

74,029,000

Canada

16,827,000

16,988,000

12,494,000

Other

4,163,000

8,588,000

1,755,000

Total

222,356,000

284,290,000

269,485,000

The following

table provides

information related

to the

location of

the Company's

property, plant

and equipment,

net, as

December

31:

2020

2019

United States

36,698,000

39,132,000

Mexico

29,537,000

31,865,000

Canada

7,817,000

8,209,000

Total

74,052,000

79,206,000

PRODUCTS

Sheet Molding Compound (“SMC”)

SMC is primarily

a combination of

resins, fiberglass, fillers,

and catalysts compounded

and cured in

sheet form, which

is then

used to

manufacture compression

-molded products,

as discussed

below. The Company

incorporates a

sophisticated computer

program in

the process

of compounding

various complex

SMC formulations

tailored to

meet customer

needs. The

program

provides for the control of information during various production processes and data

for statistical batch controls. The Company

also sells SMC to other molders.

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Closed Molded Products

The Company manufactures

plastic products using

compression molding, resin

transfer molding, and

injection molding. As of

December

31, 2020, the

Company owned 75

molding presses in

its Columbus, Ohio

facility (16); Matamoros,

Mexico facility

(21); Cobourg, Canada facility (19);

Gaffney, South Carolina facility (10);

Winona, Minnesota facility (5); and

Escobedo, Mexico

(4).

The Company's molding presses range in size from 250 to

5,000 tons.

Compression Molding of SMC -

Compression molding is a process

whereby SMC is molded

to form by matched

die steel molds

through which

a combination

of heat

and pressure

are applied

via a

molding press.

This process

produces high

quality,

dimensionally consistent

products and

is typically

used for

high volume

products.

Higher volumes

justify the

customer's

investment in matched die steel molds.

Large platen, high

tonnage presses

(2,000 tons

or greater)

provide the ability

to mold very

large reinforced

plastic parts.

The

Company believes that

it possesses a

significant portion of

the large platen,

high tonnage molding

capacity in the

industry.

enhance the surface

quality and the

paint finish of

our products, the

Company uses both

in-mold coating and

vacuum molding

processes.

In-mold coating

is the

process of

injecting a

liquid over

the molded

part surface

and then

applying pressure

at elevated

temperatures during an extended molding cycle. The liquid coating

serves to fill and/or bridge surface porosity as

well as provide

a barrier against solvent penetration during subsequent top

-coating operations.

Vacuum molding is the removal of

air during the molding cycle for

the purpose of reducing the amount

of surface porosity. The

Company believes that it

is among the industry

leaders in in-mold

coating and vacuum molding

applications, based on the

size

and complexity of parts molded.

Resin Transfer Molding

(“RTM”) -

This process

employs two

molds, typically

a core

and a

cavity, similar

to matched

die

molding.

The composite is produced by placing glass mat, chopped

strand, or continuous strand fiberglass in the mold cavity

the desired pattern.

Parts used for cosmetic purposes typically have a gel coat applied to the mold surface. The core mold is then

fitted to the cavity, and

upon a satisfactory seal, a

vacuum is applied. When the proper

vacuum is achieved, the resin

is injected

into the mold

to fill the

part.

Finally, the part

is allowed

to cure

and is then

removed from

the mold

and trimmed

to shape.

Fiberglass reinforced

products produced

from the

RTM process

exhibit a

high-quality surface

on both

sides of

the part

and

excellent part thickness. The

multiple insert tooling technique

can be utilized in

the RTM process

to improve throughput based

upon volume requirements.

Structural Foam and Web Injection

Molding (“SIM”) -

Structural foam and structural web

are low-pressure injection molding

processes that develop high-strength,

rigid parts at low

weight.

This is accomplished by

mixing a foaming agent

(usually, nitrogen

gas) with the melted

polymer (structural foam

process), or by injecting

nitrogen gas into the

mold cavity immediately after

the

plastic resin is injected (structural web molding).

Structural foam produces a cellular interior structure that can provide twice the

rigidity of a solid plastic molding.

The structural web process pushes the plastic out to the mold cavity walls, uniformly packing

out the entire mold and hollowing out thicker sections to create products

of varying wall thicknesses.

As a result, structural web

molded parts have a smoother, glossier finish than

other low-pressure parts.

Both processes give part designers flexibility when

designing products that need strength and stiffness at low weight.

Direct Long-Fiber Thermoplastics (“D-LFT”)

D-LFT molding employs two molds,

typically a core and

a cavity, similar to

matched die molding. This is

a process for compounding

and molding thermoplastic

materials with "long" fibers

(typically, 0.5

inch or

longer). Engineered

thermoplastic pellets

and performance

additives are

compounded in

a screw

extruder, to

which

chopped reinforcements (typically, glass fibers) are added and further extruded. A "charge" of material is cut to a precise weight,

and this "

charge" is directly

moved to a

compression or injection

-transfer process, where

it is molded

into a finished

part. The

process allows for direct processing of the compounded

material, bypassing the expense and delay of producing an intermediate

product (pellets or sheets)

as is used in

other fiber-reinforced thermoplastic molding processes. The

D-LFT process is an

attractive

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option for

products that

have complex

geometry, require

high strength

and stiffness,

and benefit

from the

recyclability of

thermoplastic resin.

Reaction Injection

Molding (“RIM”)

- This is

a process

whereby a

composite is

produced through

the injection

of a

two-

component thermoset

resin system

utilizing dicyclopentadiene

(“DCPD”) technology.

DCPD technology

involves injecting

liquid compound into matched die

aluminum molds to form the part.

In this process the mold is prepared,

closed and the liquid

compound is

injected into

the tool

then cured.

Additional finishing

is required

when the

part is

designated for

top coat

painting.

The RIM

process is an

alternative to

other closed mold

processes for

mid-volume parts

that require a

high level of

impact resistance.

Open Molded Products

The Company produces

reinforced plastic

products using both

the hand lay

-up and spray

-up methods of

open molding

at our

Batavia, Ohio and

Matamoros, Mexico locations.

Part sizes weigh

from a few

pounds to several

hundred pounds with

surface

quality tailored for the end use application.

Hand Lay-Up -

This process utilizes

a shell mold,

typically the cavity,

where glass cloth,

either chopped strand

or continuous

strand glass mat, is introduced into the cavity. Resin is then applied to the cloth and rolled out to achieve a uniform wet-out from

the glass and to remove

any trapped air. The part

is then allowed to cure

and is removed from the

mold. After removal, the part

typically undergoes trimming to achieve the

shape desired. Parts used for

cosmetic purposes typically have a gel coat

applied to

the mold surface prior

to the lay-up to

improve the surface quality

of the finished part.

Parts produced from this

process have a

smooth outer surface and an unfinished or

rough interior surface. These fiberglass-reinforced products are typically

non-cosmetic

components or structural reinforcements that are sold externally

or used internally as components of larger assemblies.

Spray-Up -

This process

utilizes the same

type of shell

mold as

hand-lay-up, but

instead of

using glass

cloth to

produce the

composite part,

a chopper/spray

system is

employed.

Glass rovings

and resin

feed the

chopper/spray gun.

The resin

coated,

chopped glass is

sprayed into the

mold to the

desired thickness. The

resin coated glass

in the mold

is then rolled

out to ensure

complete wet-out and to remove any trapped air.

The part is then allowed to cure, is

removed from the mold, and is then

trimmed

to the desired

shape. Parts used

for cosmetic purposes

typically have a

gel coat applied

to the mold

surface prior to

the resin-

coated glass being

sprayed into the

mold to improve

the surface quality

of the finished

part. Parts

produced from this

process

have a smooth outer surface and an unfinished or rough interior

surface.

Assembly, Machining, and Paint Products

Many of

the products

molded by the

Company are

assembled, machined,

and prime

painted or

topcoat painted

to result in

completed product used by the Company's customers.

The Company

has demonstrated

manufacturing flexibility

that accommodates

a range

of low

volume hand

assembly and

machining work, to high

volume, highly automated

assembly and machining

systems. Robotics are

used as deemed productive

for material handling,

machining, and adhesive

applications. In addition

to conventional machining

methods, water-jet cutting

technology is also used where

appropriate. The Company also utilizes

paint booths and batch ovens in

its facilities. The Company

generally contracts with outside providers for higher volume

applications that require top coat paint.

RAW MATERIALS

The principal raw materials used in the Company's processes are unsaturated polyester; vinyl ester;

polyethylene, polypropylene

and dicyclopentadiene

resins; fiberglass;

and filler. Other

significant raw

materials include

adhesives for assembly

of molded

components, in-mold coating, gel-coat, prime paint for preparation of cosmetic surfaces,

and hardware (primarily metal

components).

Many of

the raw

materials used

by the

Company are

crude oil

based, natural

gas based

and downstream

components, and therefore, the

costs of certain raw

materials can be affected

by changes in

costs of these underlying

commodities.

Due to fluctuating commodity prices,

suppliers are typically reluctant to enter

into long-term contracts. The Company generally

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has supplier alternatives

for each raw

material, and regularly

evaluates its supplier

base for certain

supplies, repair items,

and

components to improve its overall purchasing position.

BACKLOG

The Company relies on production schedules provided

by its customers to plan and implement production.

These schedules are

normally provided on a weekly basis and typically considered firm for approximately four weeks.

Some customers update these

schedules daily for changes in demand, allowing them

to run their inventories on a “just-in-time”

basis.

The ordered backlog of

four weeks of expected shipments was approximately $21.3

million (all of which the Company shipped during the first month of

2021)

and $20.7

million at December

31, 2020 and 2019, respectively.

CAPACITY CONSTRAINTS

Capacity utilization is

measured based on

standard cycle times and

a standard work

week, which can range

from five days

per

week, three-shifts per

day to seven days

per week, three-shifts per

day, depending on the

facility and molding process.

During

times when demand

exceeds the standard

five day, three

-shift capacity, the

Company will work

weekends to create

additional

capacity, which

can provide

capacity utilization

percentages greater

than 100%.

During 2020,

the Company has

used various

methods from overtime to a weekend manpower crew to support

the customers' production requirements.

The approximate SMC production line capacity utilization was

66% and 73%

for the years ended December 31, 2020 and 2019,

respectively.

The Company measures

facility capacity in

terms of its

large molding presses

(2,000 tons or

greater) for the

Columbus, Ohio,

Gaffney, South Carolina, Winona, Minnesota and the SMC molding at the Matamoros, Mexico facility. The Company owned 28

large molding presses at these

facilities at December

31, 2020. The combined

approximate large press capacity utilization in

these

production facilities was 55% and 83% for the years ended December 31, 2020 and 2019, respectively. The decreased utilization

mainly resulted from decrease demand due to COVID-19

and improved production efficiency.

The Company

measures facility

capacity in terms

of its large

molding presses (750

tons or

greater) for

the Cobourg, Canada

facility. The Company

owned 7

large molding presses

at this facility

at December

31, 2020.

The combined approximate

large

press capacity utilization in this facility was 89% and 72% for

the years ended December 31, 2020 and 2019, respectively.

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT

Capital expenditures

totaled approximately

$3.7 million,

$7.5

million,

and $5.8

million in 2020,

2019, and 2018

respectively.

These capital expenditures primarily consisted of building and equipment improvements and additional production equipment to

manufacture parts.

The Company continuously

engages in

product development.

Research and development

activities focus

on developing

new

material formulations,

new structural

composite products,

new production

capabilities and

processes, and

improving existing

products and manufacturing

processes.

The Company does

not maintain a

separate research and

development organization or

facility, but uses its

production equipment, as necessary,

to support these efforts

and cooperates with its

customers and its suppliers

in research and development efforts.

Likewise, manpower to direct and advance research and development is integrated with the

existing manufacturing,

engineering, production,

and quality organizations.

Management of

the Company has

estimated that

costs related

to research and

development were

approximately $1.2

million, $1.2

million and $1.0

million in 2020,

2019, and

2018, respectively.

ENVIRONMENTAL COMPLIANCE

The Company's

manufacturing operations

are subject

to federal,

state, and

local environmental

laws and

regulations, which

impose limitations on

the discharge of

hazardous and non

-hazardous pollutants into

the air and

waterways.

The Company has

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established and implemented

standards for the treatment,

storage, and disposal of

hazardous waste. The Company's

policy is to

conduct its business with due regard for

the preservation and protection of the environment.

The Company's environmental waste

management process involves the

regular auditing of hazardous

waste accumulation points, hazardous

waste activities, authorized

treatment, and storage and disposal

facilities.

As part of the Company's

environmental policy, all manufacturing

employees are

trained on waste management and other environmental issues.

The Company holds

various environmental

operating permits

for its production

facilities in

the U.S., Mexico,

and Canada as

required by

U.S., Mexican

and Canadian

state and

federal regulations.

The Company

has substantially

complied with

all

requirements of these operating permits.

HUMAN CAPITAL MANAGEMENT

As of December 31,

2020, the Company employed

a total of 1,617

employees, which consisted of

679 employees in its

United

States operations,

722 employees

in its

Mexican operations

and 216

employees in

its Canadian

operation.

Of these

1,617

employees, 518 employees at the Company’s Columbus, Ohio facility are covered by a collective bargaining agreement with the

International Association of Machinists

and Aerospace Workers (“IAM”),

which extends to

August 7, 2022,

534 employees at

the Company

’s Matamoros,

Mexico facility

are covered

by a collective

bargaining agreement

with Sindicato de

Jorneleros y

Obreros, which

extends to

January 21,

2022,

191 employees

at the

Company's Cobourg,

Canada facility

are covered

by a

collective bargaining agreement

with United Food

& Commercial Workers

Canada ("UFCW"), which

extends to November

2021, and

73 employees at

the Company's

Escobedo, Mexico

facility are

covered by

a collective

bargaining agreement

with

Sindicato de

trabajadores de

la industria metalica

y del comercio

del estado

de Nuevo

Leon Presidente

Benito Juarez

Garcia

C.T.M., which

extends to

February 1,

2021. The

Company is

currently negotiating

an extension

to the

Escobedo, Mexico

collective bargaining agreement.

PATENTS, TRADE NAMES, AND TRADEMARKS

The Company will

evaluate, apply for,

and maintain patents,

trade names, and

trademarks where

it believes that

such patents,

trade names, and trademarks are reasonably required to protect its

rights in its products.

However, the Company does not believe

that any single patent, trade name, or trademark or related group of

such rights is materially important to its business or its ability

to compete.

SEASONALITY & BUSINESS CYCLE

The Company's business is affected annually by the production

schedules of its customers.

Certain of the Company's customers

typically shut down their operations on

an annual basis for a period

of one to several weeks during the

Company's third quarter.

Certain customers

also typically

shut down

their operations

during the

last week

of December.

As a

result, demand

for the

Company's products typically decreases during

the third and fourth

quarters.

Demand for medium and heavy-duty

trucks, marine,

automotive, and

commercial products

also fluctuates

on an

economic, cyclical

and seasonal

basis, causing

a corresponding

fluctuation for demand of the Company's products.

AVAILABLE INFORMATION

We maintain a

website at www.coremt.com.

Annual reports on

Form 10-K, quarterly

reports on Form

10-Q, current reports

Form 8-K, all amendments

to those reports,

and other information about

us are available free

of charge through this

website as

soon as reasonably practicable after the reports are electronically

filed with the SEC. These materials are also available from the

SEC’s website at www.sec.gov.

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ITEM 1A.

RISK FACTORS

The following risk factors describe various risks that may affect our business, financial condition, and operations.

References to

“we,” “us,” and

“our” in this

“Risk Factors”

section refer to

Core Molding Technologies

and its subsidiaries,

unless otherwise

specified or unless the context otherwise requires.

Risks Relating to our Business

Our business has concentration risks associated with significant customers.

Sales to five customers constituted approximately 70%

of our 2020 total sales. No other customer

accounted for more than 10%

of our total

sales for this

period.

The loss of

any significant portion

of sales to

any of our

significant customers could

have a

material adverse effect on our business, results of operations, and

financial condition.

Accounts receivable

balances with

five customers

accounted for

64% of

accounts receivable

at December

31, 2020.

The

Company performs ongoing credit evaluations of its

customers’

financial condition and maintains reserves for potential bad debt

losses.

If the financial conditions of

any of these customers were

to deteriorate, impacting their

ability to pay their receivables,

our reserves may not be

adequate which could have a

material adverse effect on our

business, results of operations,

or financial

condition.

We are

continuing to engage

in efforts intended

to strengthen and

expand our relations

with significant customers,

as well as

provide support for

our entire customer base.

We have supported our

position with customers through

direct and active

contact

through our

sales, quality,

engineering, and

operational personnel.

We cannot

make any

assurances that

we will

maintain or

improve our customer

relationships, whether

these customers

will continue to

do business with

us as they

have in the

past or

whether we will be able to supply these customers or any of our

other customers at current levels.

Our business is affected by the cyclical and overall nature of the industries and markets that we serve.

The North American heavy and

medium-duty truck industries

are highly cyclical.

In 2020, approximately 43%

of our product

sales were in these industries.

These industries and markets

fluctuate in response to

factors that are beyond

our control, such as

general economic conditions, interest

rates, federal and state regulations

(including engine emissions regulations,

tariffs, import

regulations, and

other taxes),

consumer spending,

fuel costs,

and our

customers' inventory

levels and

production rates.

Our

manufacturing operations have a significant fixed cost component.

Accordingly, during periods of changing demands, including

an increase or

slowdown in truck

demand, the profitability

of our operations

may change proportionately

more than revenues

from operations.

In addition, our operations are typically seasonal as a result

of regular customer maintenance shutdowns, which

typically vary from

year to year

based on production

demands and occur

in the third

and fourth quarter

of each calendar

year.

This seasonality may

result in decreased

net sales and

profitability during the

third and fourth

fiscal quarters of

each calendar

year. Weakness in overall economic conditions or in the

markets that we serve, or significant reductions by our customers

in their

inventory levels or future production rates, could result in

decreased demand for our products and could

have a material adverse

effect on our business, results of operations, or financial condition.

Price increases in

raw materials and

availability of raw

materials could

adversely affect

our operating results

and financial

condition.

We purchase resins

and fiberglass for

use in production

as well as

hardware and other

components for product

assembly. The

prices for purchased materials

are affected by the

prices of material

feed stocks such as

crude oil, natural

gas, and downstream

components, as well

as processing capacity

versus demand.

We attempt to

reduce our exposure

to increases by

working with

suppliers, evaluating

new suppliers,

improving material

efficiencies, and

when necessary

through sales

price adjustments

customers.

If we are unsuccessful

in developing ways

to mitigate these

raw material increases

we may not be

able to improve

productivity or realize savings from cost reduction programs sufficiently to help offset

the impact of these increased raw material

costs. As a result, higher raw material costs could result in declining margins and operating results.

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Cost reduction and quality improvement

initiatives by original equipment manufacturers

could have a material adverse effect on

our business, results of operations, or financial condition.

We are

primarily a

components supplier

to the

heavy and

medium-duty truck

industries, which

are characterized

by a

small

number of original equipment

manufacturers (“OEMs”)

that are able to

exert considerable pressure on

components suppliers to

reduce costs, improve

quality, and provide

additional design and

engineering capabilities.

Given the fragmented

nature of the

industry, OEMs

continue to

demand and

receive price

reductions and

measurable increases

in quality

through their

use of

competitive selection

processes, rating

programs, and

various other

arrangements. We

may be

unable to

generate sufficient

production cost savings in the

future to offset such

price reductions. OEMs may also

seek to save costs by

purchasing components

from suppliers that

are geographically closer

to their production

facilities or relocating

production to locations

with lower cost

structures and purchasing components from suppliers with lower production costs. These decisions by OEMs could require us to

shift production between our facilities,

move production lines between our

facilities, or open new

facilities to remain competitive.

Shifting production,

moving production

lines, or

opening new

locations could

result in

significant costs

required for

capital

investment, transfer expenses, and operating

costs. Additionally, OEMs

have generally required component suppliers

to provide

more design engineering input at earlier stages of the product development process, the costs of which have, in some cases, been

absorbed by the suppliers.

To the extent that

the Company does not

meet the quality standards

or demands of quality

improvement

initiatives sought by OEMs,

or does not match

the quality of suppliers

of comparable products, OEMs

may choose to purchase

from these

alternative suppliers,

and as

a result

the Company

may lose

existing or

new business

with OEMs.

Future price

reductions, increased quality

standards, and additional

engineering capabilities required

by OEMs

may reduce our

profitability

and have a material adverse effect on our business, results of

operations, or financial condition.

We operate in highly competitive markets, and if

we are unable to effectively compete it may negatively impact future operating

results, sales, and earnings.

The markets in

which we operate

are highly competitive.

We compete with

a number of

other manufacturers that

produce and

sell similar products. Our products primarily compete on the basis of capability, product quality, cost, and delivery.

Some of our

competitors have

greater financial

resources, research

and development

facilities, design

engineering, manufacturing,

and

marketing capabilities. If we are unable to develop

new and innovative products, diversify the markets,

materials, and processes

we utilize

and increase

operational enhancements,

we may

fall behind

competitors or

lose the ability

to achieve

competitive

advantages.

In the

highly competitive

market in which

we operate,

this may negatively

impact our

ability to

retain existing

customers or attract new customers, and if that occurs, it may

negatively impact future operating results, sales, and earnings.

We may be subject to additional shipping

expense or late fees if we are not able to

meet our customers' on-time demand for our

products.

We must continue to meet our customers' demand

for on-time delivery of our products.

Factors that could result in our inability

to meet customer demands

include a failure by

one or more of

our suppliers to

supply us with the

raw materials and other

resources

that we need to operate our

business effectively and an unforeseen spike

in demand for our products, which

would create capacity

constraints, among

other factors.

If this occurs,

we may be

required to

incur additional

shipping expenses

to ensure

on-time

delivery or otherwise be

required to pay

late fees, which could

have a material

adverse effect on our

business, results of operations,

or financial condition.

If we fail to attract and retain key personnel our business could be harmed.

Our success

largely depends

on the

efforts and

abilities of

our key

personnel. Their

skills, experience,

and industry

contacts

significantly benefit

us. The inability

to retain

key personnel

could have a

material adverse

effect on our

business, results

operations, or

financial condition.

Our future success

will also depend

in part upon

our continuing ability

to attract and

retain

highly qualified personnel.

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Work stoppages

or other labor issues at our facilities or at our customers' facilities could adversely affect our operations.

As of December

31, 2020,

unions at our

Columbus, Ohio,

Matamoros and

Escobedo, Mexico,

and Cobourg

Canada facilities

represented approximately 81% of our entire

workforce.

As a result, we are

subject to the risk of

work stoppages

and other labor-

relations matters. The current

Columbus, Ohio, Matamoros,

Mexico, Cobourg, Canada

and Escobedo, Mexico

union contracts

extend through August

7, 2022, January

21, 2022,

November

1, 2021 and

February

1, 2021,

respectively. Any prolonged work

stoppage

or strike at

either our

Columbus, Ohio; Matamoros

and Escobedo,

Mexico; or

Cobourg, Canada

unionized facilities

could have a

material adverse effect

on our business,

results of operations,

or financial condition.

Any failure by

us to reach

new agreement upon expiration of such union contracts may have

a material adverse effect on our business, results of operations,

or financial

condition.

The Company

is currently

negotiating an

extension to

then Escobedo,

Mexico collective

bargaining

agreement.

In addition, if any

of our customers or suppliers

experience a material work stoppage,

that customer may halt or

limit the purchase

of our products or that supplier may interrupt supply of

our necessary production components. This could cause us to shut

down

production facilities relating to these products, which could have a material adverse

effect on our business, results of operations,

or financial condition.

Our foreign operations in Mexico and Canada subject us to risks that could negatively affect our business.

We operate manufacturing facilities in Matamoros and Escobedo, Mexico and

Cobourg, Canada. As a

result, a significant portion

of our business and operations is subject to

the risk of changes in economic

conditions, tax systems, consumer preferences, social

conditions, safety and security conditions, and political conditions inherent in Mexico and Canada, including changes

in the laws

and policies that govern foreign investment, as well as

changes in United States laws and regulations relating to foreign

trade and

investment. Changes in laws and regulations related to foreign trade and investment may have an adverse effect on our results of

operations, financial condition, or cash flows.

Our business is subject to risks associated with manufacturing equipment and infrastructure.

We convert raw materials into molded products

through a manufacturing process at each

production facility. While we maintain

insurance covering our manufacturing and

production facilities, including business interruption

insurance, a catastrophic loss of

the use of all

or a portion of

our facilities due to

accident, fire, explosion, or

natural disaster, whether short

or long-term, could

have a material adverse effect on our business, results of operations, or

financial condition.

Unexpected failures of our equipment and machinery

may result in production delays, revenue loss, and

significant repair costs,

as well as injuries to our employees.

Any interruption in production capability may require us to make large capital expenditures

to remedy

the situation,

which could

have a

negative impact

on our

profitability and

cash flows.

Our business

interruption

insurance may not be

sufficient to offset the

lost revenues or

increased costs that we

may experience during a

disruption of our

operations.

Because we supply our products to OEMs, a temporary or long-term business disruption could result in a permanent

loss of

customers.

If this

were to

occur, our

future sales

levels and

therefore our

profitability could

be materially

adversely

affected.

Our business is subject

to risks associated with

new business awards.

In order to recognize profit from new

business, we must

accurately estimate product costs as part of

the quoting process and implement effective

and efficient manufacturing processes.

Expected future sales

from business awards

may not

materialize.

We may

not realize the

sales or

operating results that

anticipate from new

business awards, and

we may experience

difficulties in meeting

the production demands

of new business

awards.

The success of our business relies on our

ability to produce products which meet the quality, performance, and price expectations

of our customers.

Our ability to

recognize profit is largely

dependent upon accurately

identifying the costs

associated with the

manufacturing of our products

and executing the manufacturing

process in a cost-effective

manner.

There can be

no assurance

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that all costs

will be

accurately identified

during the

Company's quoting

process or

that the

expected level

of manufacturing

efficiency will be achieved. As a result, we may not realize the anticipated operating results

related to new business awards.

We will continue to pursue, and

may be awarded, new business

from existing or new customers.

The Company may make capital

investments, which may be

material to the Company,

in order to meet the

expected production requirements

of existing or new

customers related to

these business awards,

and to support

the potential production

demands which may

result from continued

sales growth.

The anticipated impact on the Company's

sales and operating results related

to these business awards, for

various

reasons, may not materialize.

Any delays or production

difficulties encountered in connection

with these business awards,

and

any change in

customer demand, could

adversely impact our

business, results of

operations, and liquidity,

and the benefits

anticipate may never materialize.

We have made acquisitions and may make acquisitions in the future.

We may not realize the operating results that we anticipate

from these acquisitions

or from acquisitions

we may make

in the future,

and we may

experience difficulties in

integrating the

acquired businesses or may inherit significant liabilities related to such businesses.

We explore opportunities to

acquire businesses that we

believe are related to

our core competencies from time

to time, some of

which may be

material to us.

We expect such

acquisitions will

produce operating

results consistent with

our other operations;

however, we cannot provide assurance that this assumption will prove

correct with respect to any acquisition.

Any acquisitions, may

present significant

challenges for

our management

due to the

increased time

and resources

required to

properly integrate management, employees, information systems, accounting controls, personnel, and

administrative functions of

the acquired

business with

those of

ours and

to manage

the combined

company on

a going

forward basis.

The diversion

management's attention and

any delays or

difficulties encountered in

connection with the

integration of these

businesses could

adversely impact our business, results of operations, and liquidity, and

the benefits we anticipate may never materialize.

If we are unable to meet future capital requirements,

our business may be adversely affected.

As we grow our

business, we may have

to incur significant capital

expenditures.

We may make capital

investments to, among

other things, build new or upgrade

our facilities, purchase equipment, and

enhance our production processes.

We cannot assure

you that we will have, or be

able to obtain, adequate funds to

make all necessary capital expenditures when

required, or that the

amount of future capital expenditures will not be materially

in excess of our anticipated or current expenditures.

If we are unable

to make necessary

capital expenditures we

may not have

the capability to

support our customer

demands, which in

turn could

reduce our sales and profitability and impair our ability to satisfy our customers' expectations.

In addition, even if we are able to

invest sufficient resources, these

investments may not generate

net sales that exceed

our expenses, generate any

net sales at all,

or result in any commercially acceptable products.

We may not

achieve expected efficiencies

related to the proximity

of our customers'

production facilities to our

manufacturing

facilities, or with respect to existing or future production relocation

plans.

Certain facilities are located in close proximity to

our customers in order to minimize both our

customers' and our own costs.

any of

our customers

were to

move or

if nearby

facilities are

closed, that

may impact

our ability

to remain

competitive.

Additionally, our

competitors could

build a

facility that

is closer

to our

customers' facilities

which may

provide them

with a

geographic advantage.

Any of

these events

might require

us to

move closer

to our

customers, build

new facilities,

or shift

production between our current facilities to meet our customers' needs,

resulting in additional cost and expense.

Our products

may be

rendered obsolete

or less

attractive if

there are

changes in

technology, regulatory

requirements, or

competitive processes.

Changes in

technology, regulatory

requirements, and

competitive processes

may render

certain products

obsolete or

less

attractive.

Future chemical regulations may restrict

our ability to manufacture products,

cause us to incur

substantial expenditures

to comply with

them, and

subject us

to liability for

adverse environmental

or health effects

linked to

the manufacture

of our

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products.

Failure to comply

with future regulations

may subject

us to penalties

or other

enforcement actions.

Our ability

anticipate changes in these areas

will be a significant factor

in our ability to remain competitive.

If we are unable to

identify or

compensate for any one of these changes it may have a material adverse effect on our business, results of operations, or financial

condition.

Difficulty in hiring, training, and retaining skilled labor could result in increased cost overruns, an inability

to satisfy customer

demands, and otherwise adversely affect our business.

We depend on

skilled labor

in the manufacturing

of our products.

High demand

for skilled manufacturing

labor in the

United

States has resulted in

difficulty hiring, training, and

retaining labor in

a tightening labor market.

Difficulties in securing

skilled

labor can result

in increased hiring

and training costs,

increased overtime to

meet demand, increased

wage rates to

attract and

retain operators, and higher scrap and rework costs due to inexperienced

workers which would adversely affect our business.

Financial and Accounting Risks

Fluctuations in foreign currency

exchange rates could adversely affect our results

of operations, cash flow, liquidity, or financial

condition.

Because of our international operations,

we are exposed to risk associated

with value changes in foreign

currencies, which may

adversely affect our business. Historically,

our reported net sales, earnings,

cash flow, and financial condition

have been subjected

to fluctuations in foreign exchange rates. Our primary exchange

rate exposure is with the Canadian dollar and

the Mexican peso

against the U.S.

dollar. While we actively manage

the exposure of our

foreign currency risk as

part of our overall

financial risk

management policy,

we believe

we may experience

losses from

foreign currency

exchange rate

fluctuations, and

such losses

could adversely affect our sales, earnings, cash flow, liquidity, or

financial condition.

Our stock price can be volatile.

Our stock price

can fluctuate widely

in response to

a variety of

factors. Factors include

actual or anticipated

variations in our

quarterly operating results, our

relatively small public float, changes

in securities analysts' estimates

of our future earnings,

and

the loss of major

customers, or significant business developments

relating to us or

our competitors, and other factors,

including

those described in

this “Risk Factors”

section. Our common

stock also has

a low average

daily trading volume,

which limits a

person's ability to quickly

accumulate or quickly divest themselves

of large blocks of

our stock.

In addition, a low

average trading

volume can lead to significant price swings even when a relatively few number

of shares are being traded.

We have incurred impairment charges in

the past and we

may be required to incur additional

impairment charges in the future

on a portion

or all of

the carrying value

of our goodwill

or other intangible

assets associated with

our reporting units, which

may adversely affect our financial condition and results of operations.

Each year, and

more frequently on

an interim basis

if appropriate, we

are required by

ASC Topic 350,

“Intangibles--Goodwill

and Other,”

to assess the carrying value of

our indefinite lived intangible assets

and goodwill to determine whether

the carrying

value of those assets is impaired. Such assessment and determination involves significant judgments to estimate the fair

value of

our reporting units, including estimating future cash flows,

near term and long term revenue growth, and

determining appropriate

discount rates, among

other assumptions. If

operating earnings fall

below forecasted operating

earnings, we would

perform an

interim or

annual goodwill

impairment analysis.

Should that

analysis conclude

that the

reporting unit

’s fair

value were

to be

below carrying value a goodwill impairment charge

would be necessary. Any such charges could materially adversely affect our

financial results in the periods in which they are recorded.

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Our ability to maintain effective internal control

over financial reporting may be insufficient to

allow us to accurately report our

financial results or prevent fraud, and this could cause our financial statements to

become materially misleading and adversely

affect the trading price of our common stock.

We require effective internal control

over financial reporting in order

to provide reasonable assurance with

respect to our financial

reports and to effectively prevent fraud.

Internal control over financial reporting may not

prevent or detect misstatements because

of its

inherent limitations,

including the

possibility of

human error,

the circumvention

or overriding

of controls,

or fraud.

Therefore, even

effective internal

controls can

provide only

reasonable assurance

with respect

to the

preparation and

fair

presentation of

financial statements.

If we

cannot provide

reasonable assurance

with respect

to our

financial statements

and

effectively prevent fraud, our financial statements could become materially

misleading, which could adversely affect the trading

price of our common stock.

If we are not

able to maintain

the adequacy of our

internal control over

financial reporting, including

any failure to

implement

required new or improved controls or if we experience difficulties in their implementation, our business, financial condition, and

operating results could be harmed. Any material weakness could affect

investor confidence in the accuracy and completeness

our financial statements.

As a result,

our ability to

obtain any additional

financing, or additional

financing on favorable

terms,

could be materially and adversely affected.

This, in turn, could materially and adversely

affect our business, financial condition,

and the market value of our stock and

require us to incur additional costs to improve our internal control

systems and procedures.

In addition, perceptions of the Company

among customers, suppliers, lenders, investors, securities analysts, and others

could also

be adversely affected.

We cannot assure that any material weaknesses will not arise in the future due to our failure to implement

and maintain adequate internal control over financial reporting.

Our failure to

comply with our debt

covenants could have a

material adverse effect on

our business, financial condition,

or results

of operations.

The Company’s credit

agreements contain certain

covenants.

The Company’s ability

to borrow money and

repay existing debt

on scheduled terms under its existing credit agreements

requires the Company to be compliant with its

covenants. If a default of

covenants were to occur, we may not be able to pay our debts or

borrow sufficient funds, which could materially adversely affect

our results of operations, financial condition, and cash flows.

Legal, Insurance, Tax and Cybersecurity Risks

Changes in the legal,

regulatory, and social responses to climate

change, including any possible

effect on energy prices, could

adversely affect our business and reduce our profitability.

It is possible that various proposed legislative or regulatory initiatives related to climate changes, such as cap-and-trade systems,

increased limits on

emissions of greenhouse

gases and fuel

efficiency standards, or

other measures, could

in the future

have a

material impact on

us, our customers,

or the markets

we serve, thereby

resulting in a

material adverse

effect on our

financial

condition or results of operation. For example, customers in the transportation (automotive and truck) industry could be required

to incur

greater costs

in order

to comply

with such

initiatives, which

could have

an adverse

impact on

their profitability

viability. This could in

turn lead to

further changes in the

structure of the

transportation industry that

could reduce demand

for

our products. We

are also reliant

on energy to

manufacture our products,

with our operating

costs being

subject to

increase if

energy costs

rise. During

periods of

higher energy

costs we

may not be

able to

recover our

operating cost

increases through

production efficiencies

and price

increases. While

we may

hedge our

exposure to

higher prices

via future

energy purchase

contracts, increases in energy prices

for any reason (including

as a result of

new initiatives related to climate

change) will increase

our operating costs and likely reduce our profitability.

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We may be

subject to product

liability claims, recalls

or warranty claims,

which could have

a material adverse

effect on our

business, results of operations, or financial condition.

As a components supplier to OEMs, we face a business risk of exposure to product liability claims in the event that

our products

malfunction and result in personal injury

or death. Product liability claims could result

in significant losses as a result

of expenses

incurred in

defending claims

or the

award of

damages.

In addition,

we may

be required

to participate

in recalls

involving

components sold by

us if any

prove to be

defective, or we

may voluntarily initiate

a recall or

make payments related

to such

claims in order

to maintain positive

customer relationships.

While we do

maintain product liability

insurance, it

may not be

sufficient to cover all product liability claims, and as

a result, any product liability claim brought against us could have

a material

adverse effect on our results of operations. Further, we warrant the quality of our products under limited warranties, and as such,

we are subject

to risk of warranty

claims in the

event that our

products do not

conform to our

customers’

specifications.

Such

warranty claims may

result in costly

product recalls, significant

repair costs, and

damage to our

reputation, all of

which would

adversely affect our results of operations.

Our insurance coverage may be inadequate to protect against the potential hazards to our business.

We maintain property,

business interruption,

stop loss for

healthcare and

workers' compensation,

director and officer,

product

liability, cyber, and casualty insurance coverage, but such insurance may not provide adequate coverage against potential claims,

including losses resulting from

war risks, terrorist acts,

or product liability claims

relating to products we

manufacture.

Consistent

with market

conditions in

the insurance

industry, premiums

and deductibles

for some

of our

insurance policies

have been

increasing and may

continue to increase

in the future.

In some instances, some

types of insurance

may become available

only

for reduced amounts of coverage, if at all.

In addition, there can be no assurance that our insurers would not challenge

coverage

for certain claims.

If we were to incur a significant

liability for which we were not

fully insured or that our insurers disputed,

could have a material adverse effect on our financial position.

We are subject to

environmental, occupational health and

safety rules and

regulations that may require us to

make substantial

expenditures or expose

us to

financial or

other obligations

including substantial

damages, penalties,

fines, civil

or criminal

sanctions, and remediation costs that could adversely affect our results.

Our operations, facilities,

and personnel are

subject to extensive

and evolving laws

and regulations pertaining

to air emissions,

wastewater discharges, the handling and disposal of

solid and hazardous materials and wastes, health

and safety, the investigation

and remediation of contamination, and the protection of the environment and

natural resources.

It is difficult to predict the future

interpretations and developments of environmental and

health and safety laws and

regulations or their impact on

our future results

and cash

flows.

Continued compliance

could result

in significant

increases in

capital expenditures

and operating

costs.

addition, we

may be

exposed to

obligations or

involved from

time to

time in

administrative or

legal proceedings

relating to

environmental, health

and safety

or other

regulatory matters,

and may

incur financial

and other

obligations relating

to such

matters.

Certain senior management employees have entered into potentially costly severance arrangements with

us if terminated by the

employee for good reason.

We have entered into executive employment agreements

with executive officers that provide for significant severance

payments

in the event such employee's employment

with us is terminated by the employee for good

reason (as defined in the employment

agreement). Good reason includes

one or more of

the following occurring within

one year of a

change in control: (i)

a material

reduction in

base salary,

(ii) a

material diminution

in the

executive's position

and/or duties,

(iii) a

material breach

of the

employment agreement

by the

person or

other entity

then controlling

the Company,

or (iv)

a disavowal

of the

employment

agreement by the person or

other entity then controlling the

Company. A

change in control occurs when

(a) one person (as defined

in the employment

agreement), or

more than one

person acting as

a group, acquires

ownership of stock

of the Company

that,

together with the

stock held by

such person or

group, constitutes more

than 50% of

the total fair

market value or

total voting

power of the stock

of the Company, (b) a

majority of the members

of the Company's Board of

Directors (the "Board") are replaced

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during any twelve

-month period by

directors whose appointment

or election is

not endorsed by

a majority of the

Board before

the date of

appointment or election,

or (c) the

sale of all

or substantially all of

the Company’s

assets. These agreements

would

make it costly

for the employment

of certain of

our senior management

employees to

be terminated and

such costs may

also

discourage potential acquisition proposals, which may negatively affect our

stock price.

Our provision for income

tax, adverse tax audits, or changes

in tax policy could have an

adverse effect on our business, financial

condition, and results of operations.

We are subject to income taxes

in the United States, Mexico, and

Canada. Our provision for income taxes

and cash flow related

to taxes may be negatively impacted by: (1) changes in the mix

of earnings taxable in jurisdictions with different statutory

rates,

(2) changes

in tax

laws and

accounting principles,

(3) changes

in the

valuation of

our deferred

tax assets

and liabilities,

(4)

discovery of new information

during the course of

tax return preparation,

(5) increases in nondeductible

expenses, or (6)

being

subject to include foreign income in the United States as part

of the GILTI tax provision.

Tax audits may also

negatively impact our

business, financial condition,

and results of operations.

We are subject

to continued

examination of

our income

tax returns,

and tax

authorities may

disagree with

our tax positions

and assess

additional tax.

regularly evaluate

the likelihood

of adverse

outcomes resulting

from these

examinations to

determine the

adequacy of

our

provision for income taxes. There

can be no assurance that

the outcomes from examinations

will not have a negative

impact on

our future financial condition and operating results.

Cybersecurity attacks may

threaten our confidential

information, disrupt operations

and result in

harm to our

reputation and

adversely impact our business and financial performance.

Cybersecurity attacks

across industries,

including ours,

are increasing

in sophistication

and frequency

and may

range from

uncoordinated individual attempts to measures targeted

specifically at us. These attacks include but are not limited

to, malicious

software or

viruses, attempts

to gain

unauthorized access

to, or

otherwise disrupt,

our information

systems, attempts

to gain

unauthorized access to business,

proprietary or other confidential

information, and other

electronic security breaches that

could

lead to disruptions in critical systems,

unauthorized release of confidential or

otherwise protected information and corruption

data. Cybersecurity failures

may be caused by

employee error, malfeasance,

system errors or

vulnerabilities, including

vulnerabilities of our vendors, suppliers,

and their products. We have been subject

to cybersecurity attacks in the past.

Based on

information known to

date, past attacks

have not had

a material impact

on our financial

condition or results

of operations. We

may experience such attacks in the future, potentially with more frequency

or sophistication.

Failures of our IT systems as a

result of cybersecurity attacks or other

disruptions could result in a breach

of critical operational

or financial controls and lead

to a disruption of our

operations, commercial activities or financial processes.

Cybersecurity attacks

or other

disruptions impacting

significant customers

and/or suppliers

could also

lead to

a disruption

of our

operations or

commercial activities.

Despite our

attempts to

implement safeguards

on our

systems and

mitigate potential

risks, there

is no

assurance that such actions will

be sufficient to prevent cyberattacks

or security breaches that manipulate

or improperly use our

systems or networks, compromise

confidential or otherwise

protected information, destroy or

corrupt data, or otherwise

disrupt

our operations. The occurrence of such

events could have a material adverse effect on

our business financial condition and results

of operations.

Risks Related to Economic Conditions

The recent coronavirus

(COVID-19) outbreak has

adversely impacted

our business

and could

in the

future have a

material

adverse impact on our

business, results of operation, financial

condition and liquidity, the

nature and extent of which

is highly

uncertain.

The global outbreak of the

coronavirus (COVID-19) has significantly

increased economic, demand and

operational uncertainty.

We have global operations, customers

and suppliers, including in countries

impacted by COVID-19. Authorities

around the world

have taken a variety of measures to slow the

spread of COVID-19, including travel bans or restrictions, increased border controls

Table of Contents

or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose

additional restrictions.

We have also

taken actions to

protect our employees

and to mitigate

the spread of

COVID-19, including embracing

guidelines

set by the

World Health Organization

and the Centers

for Disease Control

and Prevention on

social distancing, good

hygiene,

restrictions on

employee travel

and in

-person meetings,

and changes

to employee

work arrangements

including remote

work

arrangements where

feasible. The

actions taken

around the

world to

slow the

spread of

COVID-19 have

also impacted

our

customers and

suppliers, and

future developments

could cause

further disruptions

to the

Company due

to the

interconnected

nature of our

business relationships.

The extent

to which

COVID-19 will

impact our

ongoing business,

results of

operations,

financial condition or liquidity is highly uncertain and will depend on future developments, including the

control of the spread of

the virus, spread of new strains of the virus, additional actions taken by governmental authorities, and the ability to vaccinate the

general population.

Economic conditions and disruptions in the financial

markets could have an adverse effect on our business, financial

condition,

and results of operations.

Disruptions in the financial markets could have a material

adverse effect on our liquidity and financial condition

if our ability to

borrow money

were to

be impaired.

Disruptions in

the financial

markets may

also have

a material

adverse impact

on the

availability and cost

of credit in

the future. Our

ability to pay

our debt or

refinance our obligations

will depend on

our future

performance, which

could be

affected by,

among other

things, prevailing

economic conditions.

Disruptions in

the financial

markets may also have an

adverse effect on the U.S.

and world economies, which would

have a negative impact on

demand for

our products. In addition,

tightening of credit markets

may have an adverse

impact on our customers'

ability to finance the

sale

of new trucks or

our suppliers' ability to

provide us with raw

materials, either of which

could adversely affect our

business and

results of operations.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

The Company owned

four production facilities

as of December

31, 2020

that are situated

in Columbus, Ohio;

Gaffney, South

Carolina; Winona, Minnesota; and Matamoros, Mexico, and leases production facilities in Batavia,

Ohio; Cobourg, Canada; and

Escobedo, Mexico; and a distribution center in Brownsville, Texas.

The Columbus, Ohio

plant is located

at 800 Manor

Park Drive on approximately

28 acres of land.

The Company acquired

the

property at

800 Manor

Park Drive

in 1996

as a

result of

the Asset Purchase

Agreement with

Navistar. The

Company added

approximately 6,000 square feet to the Columbus plant during 2014 in connection with its SMC capacity expansion. The current

338,000 square feet of available floor space at the Columbus,

Ohio plant is comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

322,000

Office

16,000

Total

338,000

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The Gaffney, South Carolina plant, which was opened in 1998, is located at 24 Commerce Drive, Meadow Creek Industrial Park

on approximately 21 acres of land. The Company added approximately 28,800 square feet to the Gaffney plant during 2016. The

approximate 139,800 square feet of available floor space at the Gaffney,

South Carolina plant is comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

134,800

Office

5,000

Total

139,800

The Winona, Minnesota plant which was acquired in

2015 is located at 1700 Wilkie Drive. The

facility consists of approximately

87,000 square feet on approximately 7 acres comprised of the

following:

Approximate

Square Feet

Manufacturing/Warehouse

81,000

Office

6,000

Total

87,000

The Matamoros, Mexico

plant which was

opened in 2009

is located at

Guillermo Gonzalez Camarena

y Thomas Alva Edison

Manzana, Matamoros, Tamaulipas, Mexico. The

facility consists of approximately 478,000 square

feet on approximately 22 acres

comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

463,000

Office

15,000

Total

478,000

The Columbus, Ohio; Gaffney, South

Carolina; Winona, Minnesota; and Matamoros,

Mexico properties are subject

to liens and

security interests as

a result of

the properties being

pledged by the

Company as collateral

for its debt

as described in

Note 9

Debt

in Part II, Item 8 of this Annual Report on Form 10-K.

The Company leases a

production plant in

Batavia, Ohio located

at 4174 Half Acre Road on

approximately 9 acres of

land. On

July 23, 2019, a

new 5-year lease was

executed commencing on

August 1, 2019 and

ending on July 31,

2024.

During the year

ended, December 31,

2020, the Company

decided to close

the manufacturing facility

which it anticipates

completing in 2021.

The Company

has the

option to

provide a

six-month notification

to terminate

the lease

without penalties.

The approximate

108,000 square feet of available floor space at the Batavia, Ohio

plant is comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

104,000

Office

4,000

Total

108,000

The Company

leases a

production plant

in Cobourg,

Canada located

at 3 West

Street on approximately

10 acres

of land.

August 13

, 2020, a new 5 year

lease was executed retroactively commencing

on January 1, 2020

and ending on December 31,

2024. The approximate 247,000 square feet of available floor space

at the Cobourg, Canada plant is comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

241,000

Office

6,000

Total

247,000

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The Company leases a production

plant in Escobedo, Mexico located at

Avenida Internacional #220, Parque Industrial

VYNMSA

Escobedo, C.P. 66053, Escobedo, Nuevo Leon, Mexico on approximately 3 acres of land. The current lease agreement expires in

March 2021. The Company is currently negotiating an extension. The approximate 61,000 square feet of available

floor space at

the Escobedo, Mexico plant is comprised of the following:

Approximate

Square Feet

Manufacturing/Warehouse

59,000

Office

2,000

Total

61,000

The Company leases a warehouse and

distribution center in Brownsville, Texas located

at 1385 Cheers Street on approximately

2 acres of land.

A new lease agreement was executed on July

22, 2019 extending the lease terms through October 2022,

with an

option to extend the lease for

36 months. The approximate 42,000

square feet of available floor space

at the Brownsville, Texas

location is comprised of the following:

Approximate

Square Feet

Warehouse/Distribution

39,000

Office

3,000

Total

42,000

ITEM 3.

LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation incidental to

the conduct of its business.

The Company is not aware of

any material pending legal

proceedings to which the Company

or any of its

subsidiaries is a party or

of which any of

their property

is the subject

ITEM 4.

MINE SAFETY DISCLOSURE

None.

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PART II

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES

The Company's common stock is traded on the NYSE American LLC under the symbol “CMT”.

The table below sets forth the high and low sale

prices of the Company for each full quarterly period

within the two most recent

fiscal years for which such stock was traded.

Core Molding Technolog

ies, Inc.

High

Low

Fourth Quarter

2020

14.23

7.69

Third Quarter

2020

10.82

3.81

Second Quarter

2020

5.35

1.03

First Quarter

2020

3.50

1.50

Fourth Quarter

2019

6.49

2.80

Third Quarter

2019

7.58

5.75

Second Quarter

2019

8.50

6.73

First Quarter

2019

9.00

6.79

The Company's common stock was held by 356 holders of record

on March

10, 2021.

The Company ended

the $0.05 per

share quarterly dividend

after the May 2018

declaration.

The Company made no

payments

for cash dividends during 2020 and 2019 and made payments totaling

of $792,000 for cash dividends during 2018.

Equity Compensation Plan Information

The following

table shows

certain information

concerning our

common stock

to be

issued in

connection with

our equity

compensation plans as of December

31, 2020:

Plan Category

Number of Shares

to be Issued Upon

Exercise of

Outstanding

Options or

Vestin

Weighted

Average

Exercise Price

of Outstanding

Options

Number of

Remaining

Available for

Future Issuance

Equity compensation plans approved by stockholders

688,760

7.31

514,823

We repurchased 4,574 shares of our common stock during the year ended December

31, 2020. All stock was purchased to satisfy

tax withholding obligations upon

vesting of restricted stock

awards. Details of the repurchases

of our common stock during

the

three months ended December 31, 2020, are included in the following

table:

Period

Total number of

shares purchased

Average price paid

per share

Total Number of Shares

Purchased as Part of

Publicly Announced Plans

or Programs

Maximum Number that

May Yet

be Purchased

Under the Plans or

Programs

October 1 to 31, 2020

—

November 1 to 30, 2020

—

December 1 to 31, 2020

—

Total

—

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ITEM 6.

SELECTED FINANCIAL DATA

The following

selected financial

data is

derived from

the audited

consolidated financial

statements of

the Company.

The

information set forth below

should be read in

conjunction with “Management's Discussion

and Analysis of Financial Condition

and Results of Operations,”

the consolidated financial statements and related

notes included elsewhere in this Annual Report on

Form 10-K.

Years

Ended December 31,

(In thousands, except per share data)

2020

2019

2018

2017

2016

Operating Data:

Product sales

210,580

268,987

256,217

148,623

146,624

Tooling sales

11,776

15,303

13,268

13,050

28,258

Net sales

222,356

284,290

269,485

161,673

174,882

Gross margin

34,474

21,506

27,141

24,631

27,906

Operating income (loss)

10,390

(11,528)

(3,100)

7,941

11,527

Net income (loss)

8,165

(15,223)

(4,782)

5,459

7,411

Earnings (Loss) Per Share Data:

Net income (loss) per common share:

Basic

0.98

(1.94)

(0.62)

0.71

0.97

Diluted

0.98

(1.94)

(0.62)

0.70

0.97

Balance Sheet Data:

Total assets

165,507

179,306

201,198

138,578

133,455

Working capital

20,483

(22,609)

40,111

40,369

38,590

Long-term debt

25,198

—

55,159

3,750

6,750

Stockholders' equity

93,932

84,426

98,929

101,893

96,766

Return on beginning equity

(15)

(5)

Book value per share

11.77

10.72

12.72

13.21

12.67

Table of Contents

ITEM 7.

MANAGEMENT'S

DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND

RESULTS OF OPERATIONS

Certain statements

under this

caption of

this Annual Report

on Form

10-K constitute

forward-looking statements

within the

meaning of the

federal securities laws.

As a general

matter,

forward-looking statements

are those focused

upon future plans,

objectives or performance as opposed to historical items and include statements of

anticipated events or trends and expectations

and beliefs relating to matters

not historical in nature. Such

forward-looking statements involve known

and unknown risks and

are subject to

uncertainties and factors relating

to Core Molding

Technologies' operations and business

environment, all of

which

are difficult to

predict and many

of which are

beyond Core Molding

Technologies' control. Words

such as “may,” “will,”

“could,”

“would,” “should,”

“anticipate,” “predict,”

“potential,” “continue,”

“expect,” “intend,”

“plans,” “projects,”

“believes,”

“estimates,” “confident” and similar expressions are

used to identify these forward-looking statements. These uncertainties and

factors could cause Core Molding Technologies' actual results to differ materially from those matters expressed

in or implied by

such forward-looking statements.

Core Molding Technologies

believes that

the following

factors, among

others, could

affect its

future performance and

cause

actual results to differ materially from those expressed or implied by forward-looking statements made in

this Annual Report on

Form 10-K: business conditions in the plastics, transportation, marine and commercial

product industries (including changes in

demand for truck production); federal and

state regulations (including engine emission regulations); general economic,

social,

regulatory (including foreign

trade policy)

and political

environments in the

countries in

which Core Molding

Technologies

operates; the

adverse impact

of coronavirus

(COVID-19) global

pandemic on

our business,

results of

operations, financial

position, liquidity or cash flow, as well as

impact on customers and supply chains; safety and

security conditions in Mexico and

Canada; fluctuations in

foreign currency exchange rates;

dependence upon certain

major customers as

the primary source of

Core Molding Technologies’

sales revenues; efforts

of Core Molding

Technologies to expand

its customer base;

the ability to

develop new and innovative products and to diversify markets,

materials and processes and increase

operational enhancements;

ability to accurately

quote and execute

manufacturing processes for new

business; the actions

of competitors, customers,

and

suppliers; failure

of Core

Molding Technologies’

suppliers to

perform their

obligations; the

availability of

raw materials;

inflationary pressures; new

technologies; regulatory

matters; labor

relations; labor

availability; a

work stoppage

or labor

disruption at

one of our

union locations or

one of our

customer or supplier

locations; the loss

or inability of

Core Molding

Technologies to attract and

retain key personnel; the Company's

ability to successfully identify,

evaluate and manage potential

acquisitions and to benefit from and properly integrate any

completed acquisitions; federal, state and local

environmental laws

and regulations; the

availability of sufficient

capital; the ability

of Core Molding

Technologies to provide

on-time delivery to

customers, which may require additional

shipping expenses to ensure on-time delivery or otherwise result in late fees

and other

customer charges; risk of cancellation or rescheduling of

orders; management’s decision to pursue new

products or businesses

which involve additional costs,

risks or capital expenditures;

inadequate insurance coverage to

protect against potential

hazards;

equipment and machinery

failure; product liability

and warranty claims;

and other risks

identified from time

to time in

Core

Molding Technologies’ other public documents on file with

the Securities and Exchange Commission, including those described

in Item 1A of this Annual Report on Form 10-K.

DESCRIPTION OF THE COMPANY

Core Molding Technologies

and its subsidiaries

operate in one

operating segment as

a molder of

thermoplastic and thermoset

structural products. The Company's operating segment consists

of two component reporting units, Core

Traditional and Horizon

Plastics. The Company offers customers a wide range of manufacturing processes to fit various

program volume and investment

requirements. These processes

include compression

molding of sheet

molding compound

("SMC"), bulk

molding compounds

("BMC"), resin

transfer molding

("RTM"), liquid

molding of

dicyclopentadiene ("DCPD"),

spray-up and

hand-lay-up, direct

long-fiber thermoplastics ("D

-LFT") and structural

foam and structural

web injection molding

("SIM"). Core Molding

Technologies serves

a wide

variety of

markets, including the

medium and

heavy-duty truck,

marine, automotive,

agriculture,

construction, and

other commercial

products. The demand

for Core

Molding Technologies

’

products is

affected by

economic

conditions in the United

States, Mexico, and

Canada. Core Molding Technologies

’

manufacturing operations have a

significant

fixed cost

component. Accordi

ngly, during

periods of

changing demand,

the profitability

of Core

Molding Technologies’

operations may change

proportionately more than

revenues from operations.

Core Molding Technologies serves

a wide variety

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of markets, including

the medium

and heavy-duty

truck, marine,

automotive, agriculture,

construction, and

other commercial

products. Product sales to

medium and heavy-duty truck

markets accounted for 43%

of the Company's sales

for the year ended

December

31, 2020

and 58% and

56% for the

years ended

December

31, 2019

and 2018,

respectively. The demand

for Core

Molding Technologies’

products is affected

by economic conditions

in the United

States, Mexico, and

Canada. Core Molding

Technologies’

manufacturing operations

have a

significant fixed

cost component.

Accordingly, during

periods of

changing

demand, the

profitability of

Core Molding

Technologies’

operations may

change proportionately

more than

revenues from

operations.

In 1996, Core Molding Technologies acquired substantially all of the assets and assumed certain liabilities of Columbus Plastics,

a wholly owned

operating unit of

Navistar’s truck

manufacturing division since

its formation in

late 1980. Columbus

Plastics,

located in Columbus,

Ohio, was a

compounder and compression

molder of SMC.

In 1998, Core

Molding Technologies began

operations at its second facility in Gaffney, South Carolina, and in 2001, Core Molding Technologies added

a production facility

in Matamoros,

Mexico by

acquiring certain

assets of

Airshield Corporation.

As a

result of

this acquisition,

Core Molding

Technologies expanded its

fiberglass molding capabilities

to include the

spray up, hand

-lay-up open mold

processes and RTM

closed molding. In 2005, Core Molding Technologies acquired certain assets of the Cincinnati Fiberglass Division of Diversified

Glass, Inc.,

a Batavia,

Ohio-based, privately

held manufacturer

and distributor

of fiberglass

reinforced plastic

components

supplied primarily to the

heavy-duty truck market.

In 2009, the Company

completed construction of

a new production

facility

in Matamoros, Mexico

that replaced its

leased facility. In

March 2015, the

Company acquired substantially

all of the

assets of

CPI Binani, Inc., a

wholly owned subsidiary of

Binani Industries Limited, located in

Winona, Minnesota ("CPI"), which expanded

the Company's process capabilities to include D-LFT and diversified the customer base. In January 2018, the Company acquired

substantially all the assets of Horizon Plastics, which has manufacturing

operations in Cobourg, Ontario and Escobedo,

Mexico.

This acquisition expanded the Company's

customer base, geographic footprint, and process

capabilities to include structural foam

and structural web molding.

BUSINESS OVERVIEW

General

The Company’s

business and operating

results are directly

affected by changes

in overall customer

demand, operational

costs

and performance and leverage of our fixed cost and selling, general and

administrative ("SG&A") infrastructure.

Product sales fluctuate

in response to

several factors including

many that are

beyond the Company’s

control, such as

general

economic conditions, interest rates,

government regulations, consumer spending,

labor availability, and our

customers’

production

rates and inventory

levels. Product sales

consist of demand

from customers in

many different markets

with different levels

cyclicality and seasonality. The North American truck market, which is

highly cyclical, accounted for 43%, 58%, and 56% of the

Company’s product revenue for

the years ended December

31,

2020,

2019,

and 2018 respectively.

Operating performance is dependent on the Company’s

ability to manage changes in input costs for items such as raw materials,

labor, and overhead operating costs. Performance is also affected by manufacturing

efficiencies, including items such as on time

delivery, quality, scrap,

and productivity. Market

factors of supply

and demand can

impact operating costs.

In periods of

rapid

increases or decreases in customer demand, the Company is required

to ramp operations activity up or down quickly which may

impact manufacturing efficiencies more than in periods of steady demand.

Operating performance

is also

dependent on

the Company

’s ability

to effectively

launch new

customer programs,

which are

typically extremely complex

in nature. The

start of production

of a new

program is the

result of a

process of developing

new

molds and assembly equipment,

validation testing, manufacturing

process design, development

and testing, along with

training

and often hiring

employees. Meeting the targeted levels

of manufacturing efficiency for

new programs usually occurs over

time

as the Company gains

experience with new tools

and processes. Therefore,

during a new program

launch period, start

-up costs

and inefficiencies can affect operating results.

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Results of 2020 Overview

Operating income increased

to $10,390,000 for

the year ended

December 31, 2020

compared to a

loss of $11,528,000

for the

same period a year ago on a product sales decrease of 22%. Lower demand from our customers as a

result of a cyclical downturn

in the truck market

and the negative effect

of COVID-19 on most

customer demand were the

primary drivers of the

sales decrease.

The increase

in operating

income was

largely due

to improved

manufacturing efficiencies

and cost

savings at

several of

the

Company's facilities. The Company also incurred lower SG&A costs and no goodwill impairment in 2020.

For the year ended December 31, 2020, product sales

to truck customers decreased by 38% compared to the

same period in 2019,

as a result of

a cyclical downturn in

the truck market and

demand deterioration related to

COVID-19. According to

ACT Research,

North American heavy-duty truck production decreased approximately 47% for the year

ended December 31, 2020 compared to

the same period in 2019.

For the year ended

December 31, 2020,

the Company recorded

net income of $8,165,000

or $0.98 per

basic and diluted

share,

compared with net loss of $15,223,000, or ($1.94) per basic

and diluted share for the year ended December 31, 2019. Net

income

in 2020 was favorably impacted by $5,279,000, or $0.67 per share, as a

result of a net tax valuation allowance reversal and a tax

rate benefit due

to tax law

changes that allow

the Company to

carryback net operating

losses to offset

taxable income in

2013

through 2015, where

the Company paid

tax at 34%

compared to the

valuation of the

losses being recorded

at the 21%

current

U.S. statutory tax rate.

Looking forward, based on

industry analysts’

projections and customer

forecasts, the Company expects

sales levels for 2021

increase compared to

2020.

In the Company

’s largest market,

North American heavy-duty truck,

ACT Research is forecasting

production to

increase approximately 41%.

In several other

industries the Company

serves, customers

are forecasting

higher

demand in 2021 including in the marine and all-terrain vehicle

markets.

The Company

anticipates higher

raw material

costs in

2021 as

global economies

continue to

strengthen from

the COVID

-19

effected 2020 economic

levels. Global demand

for certain raw

materials the Company

uses has increased

in the second

half of

2020 and in the first quarter of 2021.

As a result, suppliers have been increasing the price of

these materials.

The Company has

the ability to pass through a portion, but not all, of the cost increases

to its customers.

In February 2021, an unprecedented winter storm in Texas and Mexico caused operational disruptions to

many companies in the

area including the Company’s

Matamoros and Monterey Mexico

operations as well as to

our customers and suppliers.

Much of

North American resins

and glass supply

originate from the region

and these supplier operations

were significantly affected causing

suppliers to claim

force majeure and

set supply allocations.

While the Company

has been able

to coordinated its

raw material

supply with customer demand, other supplier disruptions throughout our customers

’

supply chain have resulted in our customers

delaying orders.

In addition,

suppliers of certain

materials, such as

polypropylene, have

increased prices

due to a

shortage of

supply.

Suppliers have indicated they anticipate supply levels to recover

during the second quarter of 2021.

2020 Compared to 2019

Net sales for

the years ended

December 31,

2020 and 2019

totaled $222,356,000

and $284,290,000, respectively.

Included in

total sales

were tooling

project sales

of $11,776,000

and $15,303,000

for the

years ended

December 31,

2020 and

2019,

respectively. These sales are sporadic

in nature and fluctuate in

regard to scope and

related revenue on a period

-to-period basis.

Product sales, excluding tooling project

sales, for the year ended December

31, 2020 were $210,580,000 compared

$268,987,000 for

the same period

in 2019. This

decrease in sales

is primarily the

result of lower

cyclical demand

from truck

customers as well

as lower demand

from most all

customers as a

result of COVID

-19, offset by

the increase in

demand from

customers in building products industry.

Gross margin was approximately 15.5% of sales for the year

ended December 31, 2020, compared with 7.6% for the year

ended

December 31, 2019. The

gross margin increase, as

a percent of sales,

was due to

favorable product mix and

production efficiencies

of 8.4% and changes in selling price and material costs of 1.0%,

offset by lower leverage of fixed costs of 1.5%.

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Selling, general

and administrative

expense (“SG&A”)

totaled $24,08

4,000 in

2020, compared

to $28,934,000

in 2019.

The

decrease in SG&A expense primarily resulted from lower professional and outside

services of $2,023,000, government subsides

received in 2020 enacted as a result of COVID-19 of $1,416,000,

and lower travel costs of $783,000.

The Company incurred a

goodwill impairment of $4,100,000

associated with its Horizon Plastics

reporting unit during the year

ended December 31, 2019. In

2019, the Company incurred lower

profit margins in its Horizon

Plastics reporting unit caused by

selling price decreases that the Company had not been able to

fully offset with material cost reductions.

Interest expense totaled

$5,923,000 for the

year ended December 31,

2020, compared to

interest expense of $4,144,000

for the

year ended December 31, 2019.

The increase in interest expense was primarily due to

a loss on termination of interest rate swaps

of $1,253,000

and a one-time

expense related to

the deferred

loan costs for

the debt refinancing

of $583,000,

offset by lower

average outstanding debt in 2020.

Income tax

benefit was

approximately 80%

of total

income before

income taxes

in 2020

and 2%

of total

loss in

2019. The

Company’s effective

tax rate reflects

the effects of

taxable income and

taxable losses being

generated in tax

jurisdictions with

different tax rates, and in 2020

a net valuation allowance change of

$2,074,000 and a rate benefit of

$3,205,000 based on losses

being carried back to

years where the Company paid

tax at 34% compared

to the valuation of the

losses being recorded at

21%

current U.S. statutory tax rate.

The Company

recorded net

income for

2020 of

$8,165,000 or

$0.98 per

basic and

diluted share,

compared with

net loss

$15,223,000 or $(1.94) per basic and diluted share for 2019.

Comprehensive income totaled $8,170,000 in 2020, compared to a

comprehensive loss of $15,970,000 in 2019. The

increase was

primarily related to

higher net income

of $23,388,000

and a change

in net actuarial

adjustments of $1,982,000

for other post-

retirement benefit obligations.

2019

Compared to 2018

Net sales for 2019 totaled $284,290,000, which was an increase from the $269,485,000 reported for 2018. Included in total sales

were tooling project sales

of $15,303,000 for 2019

and $13,268,000 for 2018.

Tooling project sales result

primarily from customer

approval and acceptance

of molds and

assembly equipment specific

to their products

as well as other

non-production services.

These sales are sporadic in nature and fluctuate in regard

to scope and related revenue on a period

-to-period basis. Total product

sales for 2019, excluding tooling project sales, totaled $268,987,000, representing a 5% increase from the

$256,217,000 reported

for 2018. The increase in product

sales is primarily the result of increased

sales to our truck and marine

customers of $11,707,000

and $3,144,000, respectively.

Gross margin was approximately 7.6% of sales in 2019 and 10.1% in 2018. The gross margin

decrease, as a percent of sales, was

due to unfavorable

product mix and

production inefficiencies of

3.8%.

These reductions were

offset by net

changes in selling

price and material costs of 1.3%.

Selling, general

and administrative

expense (“SG&A”)

totaled $28,934,000

in 2019,

compared to

$27,838,000 in

2018. The

increase in SG&A expense

primarily resulted from

higher labor and

benefit costs of

$1,144,000 and

higher insurance costs

$327,000 offset by lower professional and outside services of $1,017,000.

For the year ended December

31, 2018, the Company

incurred one-time acquisition fees of $1,289,000.

Goodwill impairment totaled

$4,100,000 and

$2,403,000 in 2019

and 2018, respectively,

based on the

Company's annual and

interim goodwill impairment

assessment for its

reporting units.

See

Note 2 -

Summary of Significant

Accounting Policies

, for

further details.

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Net interest expense totaled

$4,144,000 for the year ended

December

31, 2019, compared to

net interest expense of $2,394,000

for the year ended December

31, 2018.

The increase in interest expense was primarily due

to a higher average outstanding debt

balance as well has higher interest rates in 2019.

Income tax benefit was approximately 2% of

total loss before income taxes in 2019

and 12% in 2018.

The effective income tax

rate in both

years is a

result of

the net effect

of taxable

losses in

lower statutory

rate tax jurisdictions

being offset

by taxable

income in higher statutory

rate tax jurisdictions.

Additionally, the effective rate

in 2019 includes the

impact of recording a

full

valuation allowance against net deferred tax assets in the United States

of approximately $3,267,000.

Net loss for 2019

was $15,223,000 or $(1.94)

per basic and diluted

share, compared with

net loss of $4,782,000

or $(0.62) per

basic and diluted share for 2018.

Comprehensive loss totaled

$15,970,000 in 2019,

compared to a

comprehensive loss of

$4,735,000 in 2018.

The decrease was

primarily related

to higher

net loss

of $10,441,000

and a

change in

net actuarial

adjustments of

$1,630,000 for

Core Molding Technologies - 10-K annual report 2020

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