CORE MOLDING TECHNOLOGIES INC - Annual Report: 2020 (Form 10-K)

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

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

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.

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.

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.

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

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

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

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.

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.

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.

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

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

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.

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.

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

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

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

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

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.

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

—

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

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

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.

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%.

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.

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

sponsored by

the Company

for certain

employees. Should

actual results

differ from

the assumptions

used to

determine the

reserves, additional provisions

may be required.

In particular, increases

in future healthcare

costs above the

assumptions could

have an adverse

effect on the

Company's operations. The

effect of a

change in healthcare

costs is described

Note 12 -

Post

Retirement Benefits

Core Molding

Technologies had

a liability

for post

retirement healthcare

benefits based

on actuarially

computed estimates of $

9,109,000

at December

31, 2020 and $

9,160,000

at December

31, 2019.

Fair Value of Financial Instruments

- The Company's financial instruments consist of long-term debt, revolving loans, interest

rate swaps,

foreign currency

hedges, accounts

receivable, and

accounts payable.

The carrying

amount of

these financial

instruments approximated their fair value. Further detail is located

Note 14 - Fair Value of Financial Instruments.

Concentration Risks

- The Company has concentration risk related to significant amounts of sales and accounts receivable with

certain customers.

The Company had five major customers during the year end December

31, 2020,

Navistar, Volvo, PACCAR,

BRP and UFP

Major customers are defined as customers whose current year sales individually consist of more

than ten percent

of total sales

during any annual

or interim reporting

period in the

current year. Sales

to five major

customers comprised

% and

% of total sales

in 2020, 2019 and

2018, respectively (see

Note 4 - Major

Customers

Concentrations of accounts

receivable balances with

five customers accounted

for

% and

% of accounts

receivable at

December

31, 2020

and 2019,

respectively.

The Company performs ongoing credit

evaluations of its customers' financial

condition.

The Company maintains

reserves for potential bad debt losses, and such bad

debt losses have been historically within the Company's expectations.

Sales

to all customers' manufacturing and

service locations in Mexico and

Canada totaled

% and

% of total sales for 2020,

2019 and 2018, respectively.

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

collective bargaining agreement

with United Food

& Commercial Workers

Canada ("UFCW"), which

extends to November

2021, and

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.

Earnings per

Common Share

- Basic

earnings per

common share

is computed

based on

the weighted

average number

common shares outstanding during the period.

Diluted earnings per common share are computed similarly but include the effect

of the assumed exercise of dilutive stock options and vesting of restricted stock under the treasury stock method. The Company's

restricted shares are

entitled to receive

dividends and voting

rights applicable to

the Company's common

stock, irrespective of

any vesting requirement. The

restricted shares are considered

a participating security and

the Company is required

to apply the

two-class method

to consider

the impact of

the restricted

shares on

the calculation

of basic

and diluted

earnings per

share. A

detailed computation of earnings per share is located in

Note 3 - Net Income (Loss) per Common Share

Research and

Development

- Research

and development

activities focus

on developing

new material

formulations, new

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.

Research and development costs, which

are expensed as incurred,

totaled approximately

1,168,000

, $

1,171,000

and $

1,032,000

in 2020, 2019 and 2018.

Foreign Currency Adjustments

- The functional currency for the Mexican and Canadian operations is the United States Dollar.

All foreign

currency asset

and liability

amounts are

remeasured into

United States

Dollars at

end-of-period exchange

rates.

Income statement accounts are

translated at the weighted

monthly average rates.

Gains and losses resulting

from translation of

foreign currency financial statements into United States Dollars and

gains and losses resulting from foreign currency

transactions

are included in current

results of operations. Net

foreign currency translation and

transaction activity is included

in selling, general

and administrative expense.

This activity resulted

in an expense

of $

214,000

, $

229,000

and $

88,000

in 2020, 2019

and 2018,

respectively.

COVID-19

- In December

2019, COVID-19 surfaced

and spread around

the world resulting

in business and

social disruption.

COVID-19 was declared a Public Health

Emergency of International Concern by the World

Health Organization on January 30,

2020. The extent to

which the coronavirus

could impact the

Company’s business

activity will depend

on future developments,

which are highly

uncertain and

cannot be predicted.

Factors include, new

information concerning

the severity of

COVID-19,

rollout plan for the COVID-19 vaccine, and the effectiveness of a

vaccine.

Recent Accounting Pronouncements

Current expected credit loss (CECL)

In June 2016, the

FASB issued ASU

2016-13

, “Financial Instruments-Credit Losses,”

which changes the impairment model

for

most financial assets

and certain other

instruments. For trade

and other receivables,

held-to-maturity debt securities,

loans and

other instruments, entities will

be required to use

a new forward-looking “expected loss”

model that will replace

today’s “incurred

loss” model and generally will result in

the earlier recognition of allowances for losses. For available-for-sale

debt securities with

unrealized losses,

entities will

measure credit

losses in

a manner

similar to

current practice,

except that

the losses

will be

recognized as an allowance.

Subsequent to issuing ASU 2016

-13, the FASB issued

ASU 2018-19, “Codification Improvements

to Topic 326, Financial Instruments

- Credit Losses,” for

the purpose of clarifying

certain aspects of ASU 2016

-13. ASU 2018-

19 has

the same

effective date

and transition

requirements as

ASU 2016

-13. In

April 201

9, the

FASB issued

ASU 2019

-04,

“Codification Improvements to Topic 326, Financial Instruments - Credit

Losses, Topic 815, Derivatives and Hedging, and Topic

825, Financial Instruments,

”

which is effective

with the adoption

of ASU 2016-13. In

May 2019, the

FASB issued ASU 2019-

05, “Financial Instruments

- Credit Losses (Topic

326),” which is also

effective with the adoption

of ASU 2016-13. In October

2019, the FASB voted to delay the implementation date for certain companies, including those that qualify as a smaller reporting

company under SEC

rules, until January

1, 2023, with

revised ASU’s expected

to be issued

in November 2019.

We will adopt

this ASU on its effective

date of January

1, 2023. We

do not expect the adoption of this ASU to have a material impact

on our

consolidated financial position, results of operations, cash flows, or

presentation thereof.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued

ASU

2019-12

, Income Taxes –

Simplifying the Accounting for Income

Taxes. This guidance

is intended to

simplify various aspects

of income tax

accounting including the

elimination of certain

exceptions related

to the

approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of

deferred tax

liabilities for

outside basis

differences. The

new guidance also

simplifies aspects

of the accounting

for franchise

taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis

of goodwill. The Company adopted

the new standard effective

January 1, 2020

during the third quarter with

no material impact

on our consolidated financial statements. Adoption of this guidance requires certain changes to primarily be made prospectively,

with some changes to be made retrospectively.

Facilitation of the Effects of Reference Rate Reform

In March 2020, the FASB issued ASU No.

2020-04

, Facilitation of the Effects of Reference Rate Reform on Financial Reporting

(Topic 848).

The ASU provides

optional expedients

and exceptions

for applying

GAAP to transactions

affected by

reference

rate(e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential

burden in accounting for (or

recognizing the

effects of)

reference rate

reform on

financial reporting.

The ASU is

effective as

March 12, 2020

through

December 31, 2022.

We will evaluate

transactions or contract

modifications occurring as

a result of

reference rate reform

and

determine whether to apply the optional guidance on an ongoing basis.

3. Net Income (Loss) per Common Share

Net income (loss) per common share

is computed based on the weighted

average number of common shares

outstanding during

the period. Diluted net income (loss) per common

share is computed similarly but includes the effect

of the assumed exercise of

dilutive stock options and restricted stock under the treasury stock

method.

The Company's restricted shares

are entitled to receive dividends

and voting rights applicable

to the Company's common

stock,

irrespective of

any vesting

requirement.

Accordingly, the

restricted shares

are considered

a participating

security and

the

Company is required to apply the two-class method to consider the impact of the restricted shares on the calculation of basic and

diluted earnings per share.

The computation of basic and diluted net income (loss) per common share

is as follows:

December 31,

2020

2019

2018

Net income (loss)

8,165,000

(15,223,000)

(4,782,000)

Less: net income allocated to participating securities

424,000

—

Net income (loss) available to common shareholders

7,741,000

(15,223,000)

(4,782,000)

Weighted average common

shares outstanding — basic

7,936,000

7,830,000

7,750,000

Effect of dilutive securities

3,000

—

Weighted average common

and potentially issuable

common shares outstanding — diluted

7,939,000

7,830,000

7,750,000

Basic net income (loss) per common share

0.98

(1.94)

(0.62)

Diluted net income (loss) per common share

0.98

(1.94)

(0.62)

The computation of basic and diluted net income per participating shares

is as follows:

December 31,

2020

2019

2018

Net income allocated to participating securities

424,000

—

Weighted average participating

shares outstanding — basic

434,000

300,000

216,000

Effect of dilutive securities

—

Weighted average participating

and potentially issuable

participating shares outstanding — diluted

434,000

300,000

216,000

Basic net income per participating share

0.98

—

Diluted net income per participating share

0.98

—

4. Major Customers

The Company had five major customers during the year ended December 31,

2020, Navistar, Inc. (“Navistar ”), Universal Forest

Products, Inc.

(“UFP”), 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 per

cent 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.

The following table presents sales revenue for the above-mentioned customers

for the years ended December

31:

2020

2019

2018

Navistar product sales

33,656,000

54,798,000

52,347,000

Navistar tooling sales

6,569,000

2,084,000

2,806,000

Total Navistar sales

40,225,000

56,882,000

55,153,000

UFP product sales

38,530,000

25,395,000

27,906,000

UFP tooling sales

—

240,000

Total UFP sales

38,530,000

25,395,000

28,146,000

PACCAR product

sales

27,997,000

44,543,000

38,027,000

PACCAR tooling

sales

507,000

1,525,000

6,425,000

Total PACCAR

sales

28,504,000

46,068,000

44,452,000

Volvo

product sales

23,538,000

48,487,000

46,063,000

Volvo

tooling sales

2,186,000

262,000

97,000

Total Volvo

sales

25,724,000

48,749,000

46,160,000

BRP product sales

20,269,000

16,774,000

13,629,000

BRP tooling sales

1,662,000

4,208,000

2,169,000

Total BRP sales

21,931,000

20,982,000

15,798,000

Other product sales

66,590,000

78,990,000

78,245,000

Other tooling sales

852,000

7,224,000

1,531,000

Total other sales

67,442,000

86,214,000

79,776,000

Total product sales

210,580,000

268,987,000

256,217,000

Total tooling sales

11,776,000

15,303,000

13,268,000

Total sales

222,356,000

284,290,000

269,485,000

5. Foreign Operations

Primarily all of the Company's product is sold to U.S. based customers in

U.S. dollars.

The following table provides information

related to 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 property,

plant and equipment, net, as of 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

6. Property, Plant, and Equipment

Property, plant, and equipment consisted of the following at December

31:

2020

2019

Land and land improvements

6,009,000

Buildings

43,545,000

43,375,000

Machinery and equipment

121,382,000

118,366,000

Tools, dies, and patterns

2,195,000

1,516,000

Additions in progress

1,422,000

1,615,000

Total

174,553,000

170,881,000

Less accumulated depreciation

(100,501,000)

(91,675,000)

Property, plant and equipment,

net

74,052,000

79,206,000

Additions in progress

at December

31, 2020 and

2019 relate to

building improvements and

equipment purchases that

were not

yet completed and placed in service at year end.

At December

31, 2020, commitments for capital expenditures in progress were

677,000

and included $

145,000

recorded on the

balance sheet in accounts

payable.

At December

31, 2019, commitments

for

capital expenditures

in progress

were $

336,000

, and

included $

158,000

recorded on

the balance

sheet in

accounts payable.

Depreciation expense

was $

8,659,000

, $

8,187,000

and $

7,361,000

for the

years ended

December

31, 2020,

2019 and

2018,

respectively.

7. Leases

The Company has operating

leases with fixed payment

terms primarily associated with

buildings and warehouses. The

Company's

leases have

remaining lease

terms of

less than

one year

s to

four years

, some

of which

include options

to extend

the lease

for

five years

. Operating leases are included

in Right-of-use ("ROU") assets and

Other accrued liabilities

and

Other non-current

liabilities

on the Consolidated

Balance Sheets. ROU

assets represent the right

to use an underlying

asset for the lease

term and

lease liabilities represent the obligation to make lease payments arising

from the lease.

The Company used the applicable incremental

borrowing rate at implementation date to measure

lease liabilities and ROU assets.

The incremental borrowing rate used by

the Company was based on baseline rates

and adjusted by the credit spreads

commensurate with

the Company

’s secured

borrowing rate.

At each

reporting period

when there is

a new lease

initiated, the

Company will utilize

its incremental borrowing

rate to perform

lease classification

tests on

lease components and

to measure

ROU assets and lease liabilities.

The following table provides information related to the components of

lease expense as of December 31:

2020

2019

Operating lease cost

1,430,000

Total net lease cost

1,430,000

The following table provides

information related to other

supplemental balance sheet information

related to leases as

of December

31:

2020

2019

Operating lease:

Operating lease right of use assets

2,754,000

4,484,000

Total operating lease right of

use assets

2,754,000

4,484,000

Current operating lease liabilities

(A)

1,023,000

1,304,000

Noncurrent operating lease liabilities

(B)

1,670,000

3,119,000

Total operating lease liabilities

2,693,000

4,423,000

(A)

Current operating lease liability included in "Other Current Accrued Liabilities" on the Consolidated

Balance Sheet

(B)

Noncurrent operating lease liability included in "Other Non

-Current Liabilities" on the Consolidated Balance Sheet.

Weighted average remaining

lease term (in years):

Operating leases

3.5

4.0

Weighted average discount

rate:

Operating lease

5.9

4.9

Other information related to leases as of December 31:

2020

2019

Cash Paid for amounts included in the measurement of

lease liabilities

Operating cash flow from operating leases

(C)

1,455,000

(C)

Cash flow from operating lease included in "Prepaid and other assets"

on the Consolidated Statements of Cash Flows.

As of December

31, 2020, maturities of lease liabilities were as follows:

Operating Leases

2021

1,215,000

2022

811,000

2023

706,000

2024

705,000

2025

—

Total lease payments

3,437,000

Less: imputed interest

(744,000)

Total lease obligations

2,693,000

Less: current obligations

(1,023,000)

Long-term lease obligations

1,670,000

As of December

31, 2019, maturities of lease liabilities were as follows:

Operating Leases

2020

1,433,000

2021

1,174,000

2022

1,102,000

2023

1,000,000

2024

530,000

Total lease payments

5,239,000

Less: imputed interest

(816,000)

Total lease obligations

4,423,000

Less: current obligations

(1,304,000)

Long-term lease obligation

3,119,000

8. Goodwill and Intangibles

Goodwill activity for the year ended December

31, 2020 and December

31, 2019 consisted of the following:

2020

2019

Balance at beginning of year

17,376,000

21,476,000

Additions

—

Impairment

—

(4,100,000)

Balance at end of year

17,376,000

Intangible assets at December

31, 2020 were comprised of the following:

Definite-lived Intangible Assets

Amortization Period

Gross Carrying

Amount

Accumulated

Amortization

Net Carrying

Amount

Trade Name

25 Years

250,000

(58,000)

192,000

Trademarks

10 Years

1,610,000

(476,000)

1,134,000

Non-competition Agreement

5 Years

1,810,000

(1,071,000)

739,000

Developed Technology

7 Years

4,420,000

(1,869,000)

2,551,000

Customer Relationships

Years

9,330,000

(2,430,000)

6,900,000

Total

17,420,000

(5,904,000)

11,516,000

Intangible assets at December

31, 2019 were comprised of the following:

Definite-lived Intangible Assets

Amortization Period

Gross Carrying

Amount

Accumulated

Amortization

Net Carrying

Amount

Trade Name

25 Years

250,000

(48,000)

202,000

Trademarks

10 Years

1,610,000

(315,000)

1,295,000

Non-competition Agreement

5 Years

1,810,000

(709,000)

1,101,000

Developed Technology

7 Years

4,420,000

(1,237,000)

3,183,000

Customer Relationships

Years

9,330,000

(1,647,000)

7,683,000

Total

17,420,000

(3,956,000)

13,464,000

The Company incurred

1,948,000

, $

1,949,000

and $

1,869,000

amortization expense for

the years ended

December

31, 2020,

2019, and 2018, respectively.

As of December

31, 2020, future intangible amortization was follows:

Amortization Expense

2021

1,949,000

2022

1,949,000

2023

1,602,000

2024

1,587,000

2025

951,000

2026 and thereafter

3,478,000

Total intangibles as of December

31, 2020

11,516,000

9. Debt

Long-term debt consists of the following at:

December 31,

2020

December 31,

2019

Wells Fargo

term loans payable

16,390,000

—

FGI term loans payable

13,148,000

—

Leaf Capital term loan payable

152,000

—

KeyBank term loans payable

—

38,250,000

KeyBank revolving loan

—

12,008,000

Total

29,690,000

50,258,000

Less: deferred loan costs

(1,957,000)

(807,000)

Less: current portion

(2,535,000)

(49,451,000)

Long-term debt

25,198,000

—

Term Loans

Wells Fargo Term Loans

On October 27, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National

Association, as administrative agent, lead arranger and book runner, and the lenders party thereto (the “Lenders”). Pursuant to

the terms of the Credit Agreement, the Lenders made available to the Company secured term loans (the “WF Term Loans”) in

the maximum aggregate principal amount of $18,500,000 ($16,790,000 of which was advanced to the Company on October 28,

2020).

The proceeds

from the

WF Term Loans

were used

to pay

off the

Company’s existing

outstanding indebtedness

with

KeyBank National Association, and to pay certain fees and expenses associated with the financing.

At the option of the Company, the WF Term Loans bears interest at a per annum rate equal to LIBOR plus a margin of 300 basis

points or base rate plus a margin of 200 basis points. LIBOR rate means the greater of (a) 0.75% per annum and (b) the per

annum published LIBOR rate for interest periods of one, three or six months as chosen by the Company. Base rate is the greater

of (a) 1.0% per annum, (b) the Federal Funds Rate plus 0.5%, (c) LIBOR Rate plus 100 basis or (d) prime rate. The weighted

average interest rate was 3.77% as of December 31, 2020.

The WF Term Loans are to be repaid in monthly installments of $200,000 plus interest, with the remaining outstanding balance

due on November 30, 2024, subject to certain optional and mandatory repayment terms. The Company’s obligations under the

WF Term Loans are unconditionally guaranteed by each of the Company’s U.S. and Canadian subsidiaries, with such obligations

of the Company and such subsidiaries being secured by a lien on substantially all of their U.S. and Canadian assets.

The WF Term Loans contains reporting, indebtedness, and financial covenants.

The Company is in compliance with its covenants

as of December 31, 2020.

Voluntary prepayments of amounts outstanding under the WF Term Loans are permitted at any time without premium or penalty.

To the extent applicable, LIBOR breakage fees may be charged in connection with any prepayment.

FGI Equipment Finance LLC Term Loan

On October 20, 2020, the Company entered into a Master Security Agreement and a Promissory Note, among FGI Equipment

Finance LLC, (“FGI”) the Company as debtor, and each of Core Composites Corporation, a subsidiary of the Company organized

in Delaware, and CC HPM, S. de R.L. de C.V., a subsidiary of the Company organized in Mexico, as guarantors, a term loan in

the principal amount of $13,200,000 (the “FGI Term Loan”).

On October 27, 2020, FGI advanced to

the Company $

12,000,000

which proceeds were used to pay off the Company’s existing

outstanding indebtedness with KeyBank National Association, and

to pay certain

fees and expenses

associated with the

transactions, and $

1,200,000

which proceeds were used

to fund a

security

deposit to be held

by FGI.

Interest on the FGI Term Loan is a fixed rate of 8.25% and is payable monthly.

The Company notes

that the security deposit of $

1,200,000

is located in prepaid expenses and other current assets on the balance sheet.

Following the advance of funds by FGI, the FGI Term Loans are to be repaid in monthly principal and interest installments of

$117,000 for the first 12 months, $246,000 for the subsequent 59 months and $1,446,000 due on October 31, 2026, subject to

certain optional and mandatory repayment terms.

The Company’s

obligations under the Master Security

Agreement are secured

by certain machinery and equipment of the guarantors located in Mexico, and real property of Core composites de Mexico, S. de

R.L. de C.V., also a subsidiary of the Company organized in Mexico,

located in Matamoros, Mexico.

The Company may prepay in full or in part (but not less than the amount equal to 20% of the original principal amount of the

loan) outstanding amounts before they are due on any scheduled Payment Date upon at least thirty (30) days’ prior written notice.

The Company will pay a “Prepayment Fee” in an amount equal to an additional sum equal to the following percentage of the

principal amount to be prepaid for prepayments occurring in the indicated period: four percent (4.0%) (for prepayments occurring

prior to the first anniversary of the Loan); three percent (3.0%) (for prepayments occurring on and thereafter and prior to the

second anniversary of the Loan); two percent (2.0%) (for prepayments occurring on and thereafter and prior to the third

anniversary of the Loan ); and one percent (1.0%) (for prepayments occurring any time thereafter).

Leaf Capital Funding

On April 24, 2020 the Company entered into a finance agreement with Leaf Capital Funding of $175,000 for equipment. The

parties agreed to a fixed interest rate of 5.5% and a term of 60 months.

The amount

outstanding at

December 31,

2020 was

152,000

of which, $

120,000

was classified as long-term debt.

Revolving Loans

Wells Fargo Revolving Loan

On October 27, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National

Association, as administrative agent, lead arranger and book runner, and the lenders party thereto (the “Lenders”). Pursuant to

the terms of the Credit Agreement, the Lenders made available to the Company a revolving loan commitment (the “WF Revolving

Loan”) of $25,000,000 ($8,745,000 of which was advanced to the Company on October 28, 2020).

The proceeds from

the WF

Revolving Loan were used to pay off the Company’s existing outstanding indebtedness with KeyBank National Association, and

to pay certain fees and expenses associated with the financing.

The Credit Agreement also makes available to the Company an incremental revolving commitment in the maximum amount of

$10,000,000 at the Company’s option at any time during the three (3) year period following the closing.

The borrowing availability under the line of credit is the lesser of (a) the loan commitment of $25,000,000 or (b) the sum of 90%

of eligible investment grade accounts receivable, 85% of non-investment grade eligible accounts receivable and 65% of eligible

inventory.

At the option of the Company, the WF Revolving Loan bears interest at a per annum rate equal to LIBOR plus a margin of 200

to 250 basis points or base rate plus a margin of 100 to 150 basis points, with the margin rate being based on the excess availability

amount under the line of credit. LIBOR rate means the greater of (a) 0.75% per annum and (b) the per annum published LIBOR

rate for interest periods of one, three or six months as chosen by the Company. Base rate is the greater of (a) 1.0% per annum,

(b) the Federal Funds Rate plus 0.5%, (c) LIBOR Rate plus 100 basis and (d) prime rate. The weighted average interest rate was

4.75% as of December 31, 2020.

The WF Revolving Loan commitment terminates, and all outstanding borrowings thereunder must be repaid, by November 30,

2024.

The Company

has available

19,223,000

of available

rate revolving

loans of

which

420,000

is outstanding

December

31, 2020.

The WF Revolving Loan contains the same covenants as the WF Term Loans.

Wells Fargo Bank will issue up to $

2,000,000

of Letters of Credit in accordance with the terms of the Credit

Agreement upon the

Company’s request. As of December 31, 2020, the Company

had one Letter of Credit outstanding for $

160,000

In conjunction with the October debt refinancing, the Company incurred

debt origination fees of $

1,730,000

related to the Wells

Fargo financing,

which is

being amortized

over the

life of

the Credit

Agreement,

which expires

on November

30, 2024.

addition, the Company incurred

debt origination fees of $

308,000

related to the FGI Term Loan,

which is being amortized over

the life of

the FGI Term

Loan, which expires

on October 31,

2026.

The aggregate unamortized

deferred financing fees

as of

December 31, 2020 totaled $

1,957,000

Annual maturities of long-term debt are as follows:

2021

3,019,000

2022

4,428,000

2023

4,601,000

2024

11,585,000

2025 and thereafter

6,057,000

Total

29,690,000

KeyBank Loan

On December 31, 2019, the

Company had a term

loan and revolving loan balance

of $

38,250,000

and $

12,008,000

with KeyBank

National Association, respectively. The Company’s term loan and revolving loan had variable interest rates of

6.30

% and

6.04

respectively at December

31, 2019. On

November 22, 2019

the Company entered

into a forbearance

agreement with KeyBank

and on

October 27,

2020 the

Company fully

repaid all

outstanding amounts.

As a

result of

the forbearance

agreement not

extending beyond a year, the Company’s remaining long-term debt balance was classified as a current liability in the Company’s

consolidated balance sheet as of December 31, 2019.

Interest Rate Swaps

The Company

entered into

two

interest rate

swap agreements

that became

effective January

18, 2018,

one

of which

was

designated as a cash flow

hedge for $

25,000,000

and the other designated as

a cash flow hedge for

10,000,000

to the Company’s

subsidiary. Under these agreements, the

Company paid a fixed rate

2.49

to the counterparty and

received a

30 day LIBOR

for

both cash flow

hedges. Concurrent

with the closing

of the

KeyBank credit agreement

, the

Company settled

both outstanding

interest rate swaps, which

resulted in a loss

and cash outflow of

1,253,000

. These results were categorized

interest expense

and operating activities in the Statement

of Operations and Statement of

Cash Flow, respectively. Due to the

settlement, the fair

value of the interest rate swaps was $0

December

31, 2020 compared to a liability of $

706,000

at December 31, 2019.

Bank Covenants

The Company is

required to meet

certain financial

covenants included in

the Credit Agreement with

respect to fixed

coverage

charge ratio.

The following

table presents

the financial

covenants specified

in the

Credit Agreement and

the actual

covenant

calculations as of December 31, 2020:

Financial Covenants

Actual Covenants as of

December 31, 2020

Fixed Charge Coverage Ratio

Minimum 1.10

2.6

10.

Stock Based Compensation

The Company has a Long-Term Equity Incentive Plan (the “2006 Plan”), as approved by the Company’s stockholders in May

2006. The 2006 Plan allows for grants to directors and employees of non-qualified stock options, incentive stock options, stock

appreciation rights, restricted stock, performance shares, performance units and other incentive awards (“Stock Awards”) up to

an aggregate of 3,000,000 awards, each representing a right to buy a share of Core Molding Technologies common stock. Stock

Awards can be granted under the 2006 Plan through the earlier of December 31, 2025, or the date the maximum number of

available awards under the 2006 Plan have been granted.

The number of shares

remaining available for future issuance

514,823

Restricted stock granted under the 2006 Plan vest over three years or upon the date of the participants' sixty-fifth birthday, death,

disability or change in control.

Core Molding Technologies follows

the provisions of

FASB ASC 718 requi

ring that compensation

cost relating to

share-based

payment transactions be

recognized in the

financial statements. The

cost is measured

at the grant

date, based on

the calculated

fair value of the award, and is

recognized as an expense over the employee's requisite

service period (generally the vesting period

of the equity award).

Restricted Stock

The Company grants shares of

its common stock to certain

directors, officers, and key employees

in the form of unvested

stock

(“Restricted Stock”). These

awards are recorded

at the market value

of Core Molding Technologies

’

common stock on the

date

of issuance and amortized ratably as compensation expense over

the applicable vesting period.

The following summarizes the status of Restricted Stock and changes duri

ng the years ended December

31:

2020

2019

2018

Number

Wtd. Avg.

Grant Date

Fair Value

Number

Wtd. Avg.

Grant Date

Fair Value

Number

Wtd. Avg.

Grant Date

Fair Value

Unvested - beginning of year

343,919

9.37

349,885

10.62

141,095

16.79

Granted

292,886

4.70

135,268

7.65

315,429

11.32

Vested

(107,145)

10.21

(117,828)

13.81

(82,067)

16.57

Forfeited

(21,825)

9.86

(23,406)

15.02

(24,572)

16.91

Unvested - end of year

507,835

6.35

343,919

9.37

349,885

10.62

At December

31, 2020 and 2019,

there was $

1,614,000

and $

1,923,000

, respectively, of

total unrecognized compensation expense

related to restricted stock granted

under the 2006 Plan. That cost is

expected to be recognized over

the weighted-average period

1.9

years. Total compensation expense related to

restricted stock grants for the

years ended December

31, 2020,

2019 and 2018

was $

1,254,000

, $

1,369,000

, and $

1,774,000

, respectively, and is recorded as selling, general and administrative expense.

Tax deficiencies in connection with payment of taxes upon the

vesting of restricted stock previously issued to employees

for the

years ended December

31, 2020, 2019 and 2018 were a tax deficiency of $

97,000

, $

98,000

, and $

110,000

, respectively.

During 2020, 2019 and

2018, employees surrendered

4,574

16,047

and

17,180

shares, respectfully, of the Company's

common

stock to satisfy income tax withholding obligations in connection with

the vesting of restricted stock.

Stock Appreciation Rights

As part of the Company's 2019 annual grant, Stock Appreciation Rights (SARs) were granted with a grant price of $10. These

awards have a contractual term of five years and vest ratably over a period of three years or immediately vest if the recipient is

over 65 years of age. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company's stock appreciation rights activity for the years ended December

31, 2020 and 2019 is as follows:

2020

2019

Number

Wtd. Avg.

Grant Date

Fair Value

Number

Wtd. Avg.

Grant Date

Fair Value

Outstanding - beginning of year

222,112

2.57

—

Granted

—

226,021

2.57

Vested

—

Forfeited

(41,187)

2.57

(3,909)

2.57

Outstanding - end of year

180,925

2.57

222,112

2.57

Exercisable - end of year

73,888

2.57

29,028

2.57

The average

remaining contractual

term for

SARs outstanding

at December

31, 2020

3.3

years, with

114,000

aggregate

intrinsic value. At

December

31, 2020 and 2019, there was $

179,000

and $

386,000

, respectively, of total unrecognized

compensation expense, net of

estimated forfeitures, related

to SARs. That cost

is expected to be

recognized over the weighted-

average period of

1.3

years.

Total compensation cost related to SARs for the

twelve months ended December

31, 2020 and 2019 was $

101,000

and $

185,000

respectively, all of which was recorded to selling, general and

administrative expense.

11. Income Taxes

Components of the provision for income taxes are as follows:

2020

2019

2018

Current:

Federal

(8,378,000)

—

11,000

Foreign

2,660,000

685,000

1,023,000

State and local

5,000

20,000

14,000

(5,713,000)

705,000

1,048,000

Deferred:

Federal

955,000

738,000

(1,355,000)

Foreign

1,098,000

(1,824,000)

(289,000)

State and local

42,000

26,000

(68,000)

2,095,000

(1,060,000)

(1,712,000)

Provision (benefit) for income taxes

(3,618,000)

(355,000)

(664,000)

A reconciliation of

the income tax provision based

on the federal statutory income

tax rate to the Company's

income tax provision

for the years ended December

31 is as follows:

2020

2019

2018

Provision at United States federal statutory rate

954,000

(3,274,000)

(1,145,000)

Valuation

allowance

(2,074,000)

3,267,000

—

Net operating loss carryback at

% tax rate

(3,205,000)

—

Effect of foreign taxes

790,000

(209,000)

213,000

Adoption of ASC 606

—

236,000

State and local tax expense

(372,000)

(102,000)

(54,000)

Other

289,000

(37,000)

86,000

Provision (benefit) for income taxes

(3,618,000)

(355,000)

(664,000)

The Company evaluates the

balance of deferred

tax assets that will

be realized based

on the premise that

the Company is more

likely than not to realize deferred tax benefits through the generation of future taxable income. Management makes assumptions,

judgments, and estimates to determine our current and

deferred tax provision and also the deferred

tax assets and liabilities. The

Company evaluates

provisions and

deferred tax

assets quarterly

to determine

if adjustments

to our

valuation allowance

are

required based on the consideration of all available evidence.

As of December

31, 2020 the Company had a net deferred tax asset of $

53,000

consisting of a liability of $

876,000

related to tax

positions in the

United States,

an asset of

460,000

related to tax

positions in Canada

and an asset

of $

469,000

related to tax

positions in Mexico.

The deferred

tax liabilities are

in other noncurrent

liabilities on

the Consolidated

Balance Sheet.

During

2020, the Company recorded

a valuation allowance of

1,193,000

against the entire state

and local net loss

carryforward and a

portion of

the interest

limitation carryforward,

due to

cumulative losses

in the

United States

over the

last three

years and

uncertainty related

to the Company

’s ability

to realize

the deferred

assets. The Company

believes that

the deferred

tax assets

associated with the Canadian and Mexican tax jurisdictions are more-likely-than-not to be realizable based on estimates

of future

taxable income.

Deferred tax assets consist of the following at December

31:

2020

2019

Net operating loss carryforwards

535,000

4,928,000

Interest limitation carryforwards

1,033,000

686,000

Accrued liabilities

391,000

477,000

Accounts receivable

40,000

108,000

Inventory

322,000

587,000

Property, plant, and equipment

(5,509,000)

(5,580,000)

Post retirement benefits

2,068,000

2,090,000

Goodwill and finite-lived assets, net

2,210,000

1,973,000

Other, net

156,000

24,000

Total deferred

tax asset

1,246,000

5,293,000

Valuation

allowance for deferred tax assets

(1,193,000)

(3,267,000)

Total deferred

tax asset, net

53,000

2,026,000

At December

31, 2020, the

Company had estimated

net operating loss

carryforwards in the

state and local

tax jurisdictions

25,990,000

and interest limitation carryforwards in United States federal

jurisdictions of $

4,697,000

. Both carryforwards do not

expire. At December 31, 2020, the Company had

net operating loss carryforwards in Canada, Mexico or United States federal

jurisdictions.

At December

31, 2020

and 2019

the Company

had

liability for

unrecognized tax

benefits under

guidance relating

to tax

uncertainties. The Company does

not anticipate that the

unrecognized tax benefits will

significantly change within the next

twelve

months.

The Company

files income

tax returns

in the

United States,

Mexico, Canada

and various

state and

local jurisdictions.

The

Company is not subject

to United States federal and

state income tax examinations

by tax authorities for

the years before 2017,

not subject to

Mexican income tax

examinations by Mexican

authorities for the

years before 2015

and not subject to

Canadian

income tax examinations by Canadian authorities for the years

before 2018.

12.

Post Retirement Benefits

The Company provides post retirement

benefits to certain of its

United States and Canadian employees,

including contributions

a multi-employer defined benefit pension plan, health care and life insurance benefits

, and contributions

to several defined

retirement contribution plans.

The Company contributes

to a

multi-employer defined benefit pension plan

for its employees

represented by the

International

Association of Machinists and Aerospace Workers

("IAM") at the Company’s

Columbus, Ohio production facility

The Company

does not

administer this

plan and

contributions are

determined in

accordance with

provisions of

the collective

bargaining

agreement.

The risks

of participating

in this

multi-employer plan

are different

from a single

-employer plan

in the

following

aspects:

•

Assets contributed to the multi-employer

plan by one employer

may be used to provide

benefits to employees of other

participating employers.

•

If a participating

employer stops

contributing to

the plan, the

unfunded obligations

of the

plan may be

borne by

the

remaining participating employers.

•

If the Company chooses to stop

participating in its multi-employer plan,

the Company may be required

to pay the plan

an amount based on the underfunded status of the plan, referred

to as a withdrawal liability.

The Company’s

participation in the

multi-employer defined

benefit pension plan

for the years

ended

December 31, 2020

and

2019 is outlined

in the table

below.

The most recent

Pension Protection

Act ("PPA")

zone status is

for the plan

’s year

-end at

December 31, 2020

. The zone status is based

on information the Company

received from the plan

and is certified by

the plan’s

actuary. Among other factors,

plans in the

red zone are

generally

less than 65% funded

, plans in

the yellow zone

are less than

80% funded, and plans

in the green zone are

at least 80% funded.

The “FIP/RP Status Pending/Implemented

”

column indicates

whether a financial improvement plan ("FIP") or a rehabilitation

plan ("RP") is either pending or has been implemented.

Expiration

FIP/RP

Date of

Pension Protection

Status

Contributions of the

Collective

EIN/Pension

Act Zone Status

Pending/

Company

Surcharge

Bargaining

Pension Fund

Plan Number

2020

2019

Implemented

2020

2019

Imposed

Agreement

IAM National Pension Fund /

National Pension Plan

(A)

51-6031295

002

as of 12/31/19

as of 12/31/18

Implemented

676,000

971,000

Yes

8/7/2022

Total Contributions:

676,000

971,000

(A)

The plan re-certified its zone status after using the amortization provisions of the Code.

The Company's contributions to

the plan

did not

represent more than 5% of total contributions to the plan as indicated in the plan's most recently available

annual report

for the plan

year ended December

31, 2019.

Under the terms of the collective-bargaining agreement, the

Company is required to make contributions to the plan for each hour worked up to a maximum of 40 hours per person, per

week at $1.55 per hour from August 10, 2019 through August 6, 2022. The Company is paying a surcharge of $2.40.

Prior to

the acquisition

of Columbus

Plastics, certain

of the

Company's employees

were participants,

or were

eligible to

participate, in

Navistar's post retirement health and life insurance benefit plan

This plan provides

healthcare and life insurance

benefits

for certain employees

upon their retirement,

along with their

spouses and certain

dependents and requires

cost sharing

between the Company, Navistar and the participants, in the form of premiums, co-payments, and

deductibles.

The Company and

Navistar share the cost of benefits for

these employees, using a formula that allocates

the cost based upon the respective portion

of time that

the employee

was an active

service participant

after the acquisition

of Columbus

Plastics to

the period

of active

service prior to the acquisition of Columbus Plastics.

The Company also

sponsors a post

retirement health and

life insurance benefit

plan for certain

union retirees of

its

Columbus,

Ohio production facility

In August 2010, as part of a new collective-bargaining agreement, the post retirement health and life

insurance benefits for all current and future represented employees who were not retired were eliminated in exchange for a one-

time cash payment. Individuals who retired prior to August 2010 remain eligible for post retirement health and life insurance

benefits.

The elimination of

post retirement health

and life insurance

benefits described above

resulted in a

reduction of the

Company’s

post retirement benefits

liability of approximately

10,282,000

in 2010. This reduction

in post retirement

benefits liability was

treated as a negative plan

amendment and is being amortized

as a reduction to net

periodic benefit cost over

approximately twenty

years, the actuarial

life expectancy of

the remaining participants

in the plan

at the time

of the amendment.

This negative plan

amendment resulted in net periodic benefit cost reductions of approximately $

496,000

in 2020, 2019 and 2018, and will result in

net periodic benefit cost reductions of approximately $

496,000

in 2021 and each year thereafter during the amortization period.

The funded status

of the Company's

post retirement health

and life insurance

benefits plan as

of December

31, 2020 and

2019

and reconciliation with the amounts recognized in the consolidated

balance sheets are provided below:

Post Retirement Benefits

2020

2019

Change in benefit obligation:

Benefit obligation at January 1

9,160,000

8,076,000

Interest cost

237,000

285,000

Unrecognized loss (gain)

(102,000)

1,099,000

Benefits paid, net

(186,000)

(300,000)

Benefit obligation at December 31

9,109,000

9,160,000

Plan Assets

—

Amounts recorded in accumulated other comprehensive

income:

Prior service credit

(5,114,000)

(5,610,000)

Net loss

3,351,000

3,634,000

Total

(1,763,000)

(1,976,000)

Weighted-average

assumptions as of December 31:

Discount rate used to determine benefit obligation and net periodic

benefit cost

2.0

2.9

The components of expense for all of the Company's post retirement

benefit plans for the years ended December

31:

2020

2019

2018

Pension expense:

Multi-employer plan

676,000

971,000

760,000

Defined contribution plans

1,173,000

1,258,000

1,059,000

Total pension expense

1,849,000

2,229,000

1,819,000

Health and life insurance:

Interest cost

235,000

285,000

277,000

Amortization of prior service costs

(496,000)

Amortization of net loss

181,000

117,000

171,000

Net periodic benefit cost

(80,000)

(94,000)

(48,000)

Total

post retirement benefits expense

1,769,000

2,135,000

1,771,000

The Company accounts for post retirement benefits under FASB ASC 715, which

requires the recognition of the funded status of

a defined benefit pension or post retirement plan in

the consolidated balance sheets.

For the year ended December

31, 2020, the

Company recognized

a net actuarial

gain of $

102,000

which is comprised

of differences between

actual and expected

benefit

payments, expenses and balance sheet accruals resulting

in a gain of $

1,047,000

, offset by an actuarial loss of $

945,000

. For the

year ended December

31, 2019, the Company

recognized a net actuarial

loss of $

1,099,000

, which is comprised

of an actuarial

loss of

1,956,000

, offset

by differences

between actual

and expected

benefit payments,

expenses and

balance sheet

accrual

resulting in a gain

of $

857,000

. The net actuarial

gain and loss for

the years ended

December 31, 2020

and 2019, respectively,

were recorded in

accumulated other comprehensive income

Amounts

not yet recognized

as a component

of net periodic

benefit costs at

December

31, 2020 and

2019 were a

net credit of

1,763,000

and $

1,976,000

, respectively.

The amount in accumulated other comprehensive income expected to be recognized as

components of

net periodic

post retirement

cost during

2021 consists

of a

prior service

credit of

496,000

and a

net loss

173,000

In addition, 2021

interest expense related

to post retirement

healthcare is expected

to be $

161,000

, for a

total post

retirement healthcare net gain of approximately

162,000

in 2021.

The Company expects benefits paid in

2021 to be consistent

with estimated future benefit payments as shown in the table below.

The weighted average rate

of increase in the

per capita cost of

covered health care benefits

is projected to

5.1

The rate is

projected to decrease gradually to medical pre age 65 of

5.0

%, medical post age 65 of

4.25

% and drugs – all ages of

5.0

% by the

year

2027

and remain at that level thereafter.

The comparable assumptions for the prior year were

6.0

% and

5.0

%, respectively.

The effect of changing the health care cost trend rate by one

-percentage point for each future year is as follows:

1- Percentage

Point Increase

1-Percentage

Point Decrease

Effect on total of service and interest cost components

34,000

(29,000)

Effect on post retirement benefit obligation

1,081,000

(924,000)

The estimated future benefit payments of the health care plan for the next

ten years are as follows:

Postretirement

Health Care

Benefits Plan

2021

1,286,000

2022

459,000

2023

500,000

2024

473,000

2025

471,000

2026 - 2030

2,265,000

13.

Commitments and Contingencies

From time to

time, the Company

is involved in

litigation incidental to

the conduct of

its business.

However, the Company

presently not involved in any legal proceedings

which in the opinion of management are

likely to have a material adverse

effect

on the Company's consolidated financial position or results of operations.

14. Fair Value of Financial Instruments

Fair value is

defined as the

price that would

be received to

sell an asset

or paid to

transfer a liability

in a transaction

between

market participants

as of

the measurement

date. Fair

value is

measured using

the fair

value hierarchy

and related

valuation

methodologies as

defined in

the authoritative

literature. This

guidance provides

a fair

value framework

that requires

the

categorization of assets and liabilities into three

levels based upon the assumptions (inputs)

used to price the assets or liabilities.

Level 1 provides the most reliable measure of fair value, whereas

Level 3 generally requires significant management judgment.

The three levels are defined as follows:

Level 1 -

Quoted prices in active markets for identical assets and liabilities.

Level 2 -

Quoted prices for similar

instruments in active

markets, quoted prices

for identical or similar

instruments in

markets that

are not

active and

model-derived valuations,

in which

all significant

inputs are

observable in

active markets.

Level 3 -

Significant unobservable

inputs reflecting management's

own assumptions about

the inputs used

in pricing

the asset or liability.

The Company’s financial instruments historically consisted of

cash and cash equivalents, accounts receivable, accounts payable,

debt, interest rate swaps and foreign

currency derivatives. Cash and

cash equivalents, accounts receivable

and accounts payable

carrying values as of December 31, 2020 and December

31, 2019 approximate fair value due to the

short-term maturities of these

financial instruments.

As of

December 31,

2020, the

carrying amounts

of the

WF Term

Loans and

WF Revolving

Loan

approximate fair

value due

to the

short-term nature

of the

underlying variable

rate LIBOR

agreements. The

FGI Term Loan

approximate fair value

as of December

31, 2020, due

to the immaterial

movement in interest

rates since the

Company entered

into the

Promissory Note

on of

October 20,

2020. The

carrying amounts

of long

-term debt

and the

revolving line

of credit

approximate fair value as of December 31, 2019 due to the short-term nature of the underlying variable rate LIBOR

agreements.

The Company had

Level 2 fair

value measurements at

December 31,

2019 relating to

the Company’s

interest rate swaps

and

foreign currency derivatives.

Derivative and hedging activities

Foreign currency derivatives

The Company conducts business in foreign countries and pays certain

expenses in foreign currencies; therefore, the Company is

exposed to foreign currency

exchange risk between the

U.S. Dollar and foreign

currencies, which could

impact the Company

’s

operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company entered into forward

contracts to exchange

a fixed amount

of U.S. Dollars

for a fixed

amount of foreign

currency, which

were used to

fund future

reign currency cash flows. At

inception, all forward contracts were formally documented as cash flow

hedges and were measured

at fair value each reporting period.

Derivatives are formally

assessed both at

inception and at

least quarterly thereafter,

to ensure that

derivatives used in

hedging

transactions are highly effective in offsetting changes in cash flows

of the hedged item. If it is determined that

a derivative ceases

to be

a highly

effective hedge,

or if

the anticipated

transaction is

no longer

probable of

occurring, hedge

accounting is

discontinued, and

any future

mark-to-market adjustments

are recognized

in earnings.

The effective

portion of

gain or

loss is

reported in accumulated

other comprehensive income

and the ineffective

portion is reported

in earnings. The

impacts of these

contracts were

largely offset

by gains

and losses

resulting from

the impact

of changes

in exchange

rates on

transactions

denominated in the foreign currency. As of December 31, 2020, the Company had no outstanding

foreign currency derivatives.

Interest Rate Swaps

The Company

entered into

interest rate

swap contracts

to fix

the interest

rate on

an initial

aggregate amount

35,000,000

thereby reducing exposure to interest

rate changes. The Company paid

a fixed rate of

2.49

to the counterparty

and receives 30

day LIBOR

for both cash

flow hedges. At inception,

all interest rate

swaps were formally

documented as cash

flow hedges and are

measured at fair value

each reporting period

During the 2020 year,

the Company closed the

positions, see

Note 9 – Debt

, for additional information.

Financial statements impacts

The following tables detail amounts related to our derivatives designated

as hedging instruments as of December

31, 2019:

Fair Values

of Derivatives Instruments

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Foreign exchange contracts

Prepaid expense other

current assets

452,000

Accrued liabilities other

—

Notional contract values

15,358,000

—

Interest rate swaps

Other non-current assets

—

Other non-current

liabilities

706,000

Notional swap values

—

29,750,000

As of December

31, 2019, the

Company had foreign

exchange contracts related

to the Mexican

Peso and the

Canadian Dollar

with exchange rates ranging from

19.53

20.58

and

1.32

, respectively.

The following tables

summarize the amount

of unrealized /

realized gain and

loss recognized

in Accumulated Comprehensive

Income (AOCI) for the years ended December

31, 2020, 2019 and 2018:

Derivatives in

subtopic 815-20

Cash Flow

Hedging

Relationship

Amount of Unrealized Gain or

(Loss) Recognized in Accumulated

Other Comprehensive Income on

Derivative

Location of Gain or

(Loss) Reclassified

from Accumulated

Other Comprehensive

Income

(A)

Amount of Realized Gain or (Loss)

Reclassified from Accumulated

Other Comprehensive Income

2020

2019

2018

2020

2019

2018

Foreign exchange

contracts

142,000

1,499,000

(385,000)

Cost of goods sold

526,000

272,000

68,000

Selling, general and

administrative expense

68,000

25,000

—

Interest rate swaps

(915,000)

(708,000)

(223,000)

Interest Expense

(1,620,000)

(67,000)

(159,000)

(A)

The foreign currency derivative activity reclassified from

Accumulated Other Comprehensive Income is allocated to

cost of goods sold and selling, general and administrative expense based

on the percentage of Mexican Peso spend.

15. Accumulated Other Comprehensive Income

The following table presents

changes in Accumulated Other

Comprehensive Income by component, net

of tax, for the

years ended

December

31, 2020 and 2019:

Hedging

Derivative

Activities

Post

Retirement

Benefit Plan

Items

(A)

Total

2019:

Balance at January 1, 2019

(612,000)

2,729,000

2,117,000

Other comprehensive income before reclassifications

791,000

(1,102,000)

(311,000)

Amounts reclassified from accumulated other comprehensive

income

(230,000)

(379,000)

(609,000)

Income tax (expense) benefit

(140,000)

313,000

173,000

Balance at December 31, 2019

(191,000)

1,561,000

1,370,000

2020:

Balance at January 1, 2020

(191,000)

1,561,000

1,370,000

Other comprehensive income before reclassifications

(773,000)

102,000

(671,000)

Amounts reclassified from accumulated other comprehensive

income

1,026,000

(315,000)

711,000

Income tax (expense) benefit

(62,000)

27,000

(35,000)

Balance at December 31, 2020

—

1,375,000

(A)

The effect of

post-retirement benefit items

reclassified from Accumulated

Other Comprehensive Income

is included

other income

and expense

on the

Consolidated Statements

of Operations.

These Accumulated

Other Comprehensive

Income components are included

in the computation of

net periodic benefit cost

(see

Note 12 - Post

Retirement Benefits

for additional details). The tax

effect of post-retirement benefit items

reclassified from Accumulated Other

Comprehensive

Income is included in income tax expense on the Consolidated

Statements of Operations.

16.

Quarterly Results of Operations (Unaudited)

The following is

a summary of

the unaudited quarterly

results of operations

for the years ended

December

31, 2020, 2019

and

2018.

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total

Year

2020:

Product sales

61,930,000

35,847,000

54,240,000

58,563,000

210,580,000

Tooling sales

2,093,000

1,959,000

5,633,000

2,091,000

11,776,000

Net sales

64,023,000

37,806,000

59,873,000

60,654,000

222,356,000

Gross margin

10,766,000

2,903,000

10,838,000

9,967,000

34,474,000

Operating income (loss)

4,261,000

(1,206,000)

4,321,000

3,014,000

10,390,000

Net income (loss)

7,961,000

(2,272,000)

3,343,000

(867,000)

8,165,000

Net income (loss) per common share:

Basic (1)

0.97

(0.29)

0.39

(0.10)

0.98

Diluted (1)

0.97

(0.29)

0.39

(0.10)

0.98

2019:

Product sales

71,451,000

75,440,000

67,511,000

54,585,000

268,987,000

Tooling sales

815,000

5,807,000

7,144,000

1,537,000

15,303,000

Net sales

72,266,000

81,247,000

74,655,000

56,122,000

284,290,000

Gross margin

3,149,000

8,491,000

6,484,000

3,382,000

21,506,000

Operating income (loss)

(4,017,000)

1,267,000

(4,657,000)

(4,121,000)

(11,528,000)

Net income (loss)

(3,845,000)

209,000

(6,125,000)

(5,462,000)

(15,223,000)

Net income (loss) per common share:

Basic (1)

(0.49)

0.03

(0.78)

(0.69)

(1.94)

Diluted (1)

(0.49)

0.03

(0.78)

(0.69)

(1.94)

2018:

Product sales

59,712,000

65,225,000

62,305,000

68,975,000

256,217,000

Tooling sales

3,334,000

3,376,000

2,371,000

4,187,000

13,268,000

Net sales

63,046,000

68,601,000

64,676,000

73,162,000

269,485,000

Gross margin

7,885,000

7,897,000

4,862,000

6,497,000

27,141,000

Operating income (loss)

1,125,000

1,418,000

(1,487,000)

(4,156,000)

(3,100,000)

Net income (loss)

518,000

445,000

(1,803,000)

(3,942,000)

(4,782,000)

Net income (loss) per common share:

Basic (1)

0.07

0.06

(0.23)

(0.51)

(0.62)

Diluted (1)

0.07

0.06

(0.23)

(0.51)

(0.62)

(1)

Sum of the quarters may not sum to total year due to rounding.

ITEM 9.

CHANGES IN

AND DISAGREEMENTS

WITH ACCOUNTANTS

ON ACCOUNTING

AND FINANCIAL

DISCLOSURE

Not Applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company has carried out an

evaluation, under the supervision and with the

participation of its management, including its Chief Executive

Officer and its Chief Financial Officer, of the effectiveness

of the

design and operation

of its disclosure controls

and procedures (as

defined in Rule 13a

-15(e) of the Exchange

Act). Based upon

this evaluation, the

Company’s management,

including its Chief

Executive Officer

and its Chief

Financial Officer,

concluded

that the Company

’s disclosure

controls and procedures

were (i) effective to

ensure that information

required to be

disclosed in

the Company

’s reports

filed or

submitted under

the Exchange

Act were

accumulated and

communicated to

the Company

’s

management, including its Chief

Executive Officer and Chief

Financial Officer, as appropriate

to allow timely decisions

regarding

required disclosures,

and (ii)

effective to

ensure that

information required

to be

disclosed in

the Company

’s reports

filed or

submitted under

the Exchange

Act is recorded,

processed, summarized

and reported

within the time

periods specified

in the

Securities and Exchange Commission’s

rules and forms.

Management’s Report on Internal

Control over Financial Reporting

The Company’s management

is responsible for establishing

and maintaining adequate internal

control over financial reporting.

Internal control over

financial reporting is

a process designed

by, or under

the supervision of,

the Company’s

Chief Executive

Officer and

Chief Financial

Officer and

effected by

the Company

’s board

of directors,

management and

other personnel,

provide reasonable

assurance regarding

the reliability

of financial

reporting and

the preparation

of the

Company’s financial

statements in accordance with accounting

principles generally accepted in the

United States of America. Because of its inherent

limitations, internal

control over

financial reporting

is not

intended to

provide absolute

assurance that

a misstatement

of the

Company’s financial statements

would be prevented or detected.

The Company’s

management, with

the participation

of its Chief

Executive Officer

and Chief Financial

Officer, conducted

evaluation of the effectiveness of the Company’s internal controls over financial reporting based on the criteria established in the

2013 Internal Control

Integrated Framework

issued by the Committee

of Sponsoring Organizations of

the Treadway Commission

(COSO). This evaluation included a

review of the documentation of controls,

evaluation of the design effectiveness

of controls,

testing of

the operating

effectiveness of

controls and

a conclusion

on this evaluation.

Based on

this evaluation,

management

concluded that the Company’s

internal control over financial reporting was effective as of December

31,

2020.

This annual report

does not include an

attestation report of

the Company’s

registered public accounting

firm regarding internal

control over

financial reporting.

Management’s report

was not

subject to

attestation by

the Company

’s registered

public

accounting firm

pursuant to

rules of

the Securities

and Exchange

Commission that

permit the

Company to

provide only

management’s report in this annual

report.

Changes in Internal Controls

There were no changes in

internal control over financial

reporting (as such term

is defined in Exchange

Act Rule 13a-15(f) and

Rule 15d-15(f)) that occurred in the last

fiscal quarter that have materially affected,

or are reasonably likely to materially affect,

our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required

by this Part III,

Item 10 is incorporated

by reference from

the Company’s

definitive proxy statement

for its annual meeting of stockholders to be held on or

about June 15, 2021, which is expected to be filed with the

SEC pursuant

to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

ITEM 11. EXECUTIVE COMPENSATION

The information required

by this Part

III, Item 11

is incorporated by

reference from the

Company’s definitive

proxy statement

for its annual meeting of stockholders to be held on or

about June 15, 2021, which is expected to be filed with the

SEC pursuant

to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

The information required

by this Part III,

Item 12 is incorporated

by reference from

the Company’s

definitive proxy statement

for its annual meeting of stockholders to be held on or

about June 15, 2021, which is expected to be filed with the

SEC pursuant

to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

The information required

by this Part III,

Item 13 is incorporated

by reference from

the Company’s

definitive proxy statement

for its annual meeting of stockholders to be held on or

about June 15, 2021, which is expected to be filed with the

SEC pursuant

to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required

by this Part III,

Item 14 is incorporated

by reference from

the Company’s

definitive proxy statement

for its annual meeting of stockholders to be held on or

about June 15, 2021, which is expected to be filed with

the SEC pursuant

to Regulation 14A of the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year covered by this report.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as Part of this Report:

(1) Financial Statements

See Part II, Item 8 hereof.

(2) Financial Statement Schedules and Independent Auditor's Report

The following consolidated financial statement schedules are filed with

this Annual Report on Form 10-K:

Schedule II — Valuation

and Qualifying Accounts and Reserves

for the Years Ended December

31,

2020, 2019,

and 2018

All other schedules are omitted because of the absence of the

conditions under which they are required.

(3) Exhibits

See Index to Exhibits filed with this Annual Report on Form 10-K.

ITEM 16. FORM 10-K SUMMARY

Not Applicable.

SIGNATURES

Pursuant to the requirements

of Section 13 or

15(d) of the Securities

Exchange Act of 1934,

the registrant has duly

caused this

report to be signed on its behalf by the undersigned, thereunto

duly authorized.

CORE MOLDING TECHNOLOGIES, INC.

/s/ David L. Duvall

David L. Duvall

President and Chief Executive Officer

March 11, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons

on behalf of the registrant and in the capacities and on the dates indicated:

/s/ David L. Duvall

David L. Duvall

President, Chief

Executive Officer,

and Director

(Principal Executive Officer)

March 11, 2021

/s/ John P. Zimmer

John P. Zimmer

Vice President,

Secretary, Treasurer,

and Chief

Financial Officer (Principal Financial Officer and

Principal Accounting Officer)

March 11, 2021

Sandra L. Kowaleski

Director

March 11, 2021

Thomas R. Cellitti

Director

March 11, 2021

James F. Crowley

Director

March 11, 2021

Ralph O. Hellmold

Director

March 11, 2021

Matthew Jauchius

Director

March 11, 2021

Andrew O. Smith

Director

March 11, 2021

*By /s/ John P. Zimmer

John P. Zimmer

Attorney-In-Fact

March 11, 2021

Core Molding Technologies, Inc. and Subsidiaries

Schedule II

Consolidated valuation and qualifying accounts and reserves

for the years ended December

31, 2020, 2019 and 2018.

Reserves deducted from asset to which it applies:

Allowance for Doubtful Accounts

Additions

Balance at

Beginning of

Year

(Recovered)/

Charged to

Costs &

Expenses

Charged to

Other

Accounts

Deductions

(A)

Balance at End

of Year

Year

Ended December 31, 2020

50,000

27,000

36,000

41,000

Year

Ended December 31, 2019

25,000

4,000

36,000

15,000

50,000

Year

Ended December 31, 2018

—

25,000

—

25,000

Customer Chargeback Allowance

Additions

Balance at

Beginning of

Year

(Recovered)/

Charged to

Costs &

Expenses

Charged to

Other

Accounts

Deductions (B)

Balance at End

of Year

Year

Ended December 31, 2020

476,000

291,000

—

588,000

179,000

Year

Ended December 31, 2019

2,344,000

1,316,000

—

3,184,000

476,000

Year

Ended December 31, 2018

857,000

2,639,000

—

1,152,000

2,344,000

(A)

Amount represents uncollectible accounts written off.

(B)

Amount represents customer returns and deductions, discounts and price

adjustments accepted.

INDEX TO EXHIBITS

Exhibit No.

Description

Location

2(a)(1)

Asset Purchase Agreement Dated as of September

12,

1996, As amended October

31, 1996, between

Navistar and RYMAC Mortgage Investment

Corporation

2-A to

S-4 (Registration No.

333-15809)

2(a)(2)

Second Amendment to Asset Purchase Agreement

dated December

16, 1996

2(a)(2) to

Annual Report on Form

10-K for the year-ended

31, 2001

2(b)(1)

Agreement and Plan of Merger dated as of

November

1, 1996, between Core Molding

Technologies, Inc. and RYMAC Mortgage

Investment Corporation

2-B to

S-4 (Registration No.

333-15809)

2(b)(2)

First Amendment to Agreement and Plan of Merger

dated as of December

27, 1996 Between Core

Molding Technologies, Inc. and RYMAC Mortgage

Investment Corporation

2(b)(2) to

Annual Report on Form

10-K for the year ended

31, 2002

2(c)

Asset Purchase Agreement dated as of October

10,

2001, between Core Molding Technologies, Inc. and

Airshield Corporation

2(d)

Asset Purchase Agreement dated as of March

20,

2015, between Core Molding Technologies, Inc. and

CPI Binani, Inc.

Incorporate by reference to Exhibit 2.1 to Current

2(e)

Asset Purchase Agreement dated as of January

16,

2018 between 1137952 B.C. Ltd., Horizon Plastics

International, Inc., 1541689 Ontario Inc., 2551024

Ontario Inc., Horizon Plastics de Mexico, S.A. de

C.V., and Brian Read

Report on Form 8-K filed January

19, 2018

3(a)(1)

Certificate of Incorporation of Core Molding

Technologies, Inc. as filed with the Secretary of State

of Delaware on October

8, 1996

4(a) to

S-8 (Registration No.

3(a)(2)

Certificate of Amendment of Certificate of

Incorporation of Core Molding Technologies, Inc. as

filed with the Secretary of State of Delaware on

November

6, 1996

4(b) to

S-8 (Registration No.

3(a)(3)

Certificate of Amendment of Certificate of

Incorporation as filed with the Secretary of State of

Delaware on August

28, 2002

Quarterly Report on Form 10-Q for the quarter ended

3(a)(4) to

September

30, 2002

3(a)(4)

Certificate of Designation, Preferences and Rights of

Series

A Junior Participating Preferred Stock as filed

with the Secretary of State of Delaware on July

18,

2007

3(a)(5)

Certificate of Elimination of the Series A Junior

Participant Preferred Stock as filed with the Delaware

Sec. of State on April

2, 2015

3(b)(1)

Amended and Restated By-Laws of Core Molding

Technologies, Inc.

Incorporated by reference to Exhibit 3.1 to Current

3(b)(2)

Amendment No. 1 to the Amended and Restated By-

Laws of Core Molding Technologies, Inc.

Report on Form 8-K filed December

17, 2013

4(a)(1)

Certificate of Incorporation of Core Molding

Technologies, Inc. as filed with the Secretary of State

of Delaware on October

8, 1996

Registration Statement on Form S-8 (Registration

4(a) to

No.

Exhibit No.

Description

Location

4(a)(2)

Certificate of Amendment of Certificate of Incorporation of

Core Molding Technologies, Inc. as filed with the Secretary

of State of Delaware on November

6, 1996

Registration Statement on Form S-8

4(b) to

(Registration No.

4(a)(3)

Certificate of Amendment of Certificate of Incorporation as

filed with the Secretary of State of Delaware on August

28,

2002

3(a)(4) to

Quarterly Report on Form

10-Q for the quarter

ended September

30, 2002

4(a)(4)

Certificate of Designation, Preferences and Rights of Series

A Junior Participating Preferred Stock as filed with the

Secretary of State of Delaware on July

18, 2007

3.1 to Form

8-K filed July

19, 2007

4(a)(5)

Certificate of Elimination of the Series A Junior Participant

Preferred Stock as filed with the Delaware Sec. of State on

April

2, 2015

4(a)(6)

Certificate of Designation, Preferences and Rights of Series

B Junior Participating Preferred Stock, as filed with the

Secretary of State of the State of Delaware on April 21, 2020

4(a)(7)

Rights Agreement, dated as of April 21, 2020, by and

between Core Molding Technologies, Inc. and American

Stock Transfer & Trust Company, as Rights Agent

Incorporated by reference to Exhibit 10(a) to

10(a)

Supply Agreement, dated August

4, 2014 between Core

Molding Technologies, Inc. and Core Composites

Corporation and Navistar, Inc.

Quarterly Report on Form 10-Q for the quarter

ended September

30, 2014

10(b)

Credit Agreement, dated October 27, 2020, between Core

Molding Technologies, Inc.

and Wells

Fargo Bank, National

Association, as administrative agent, lead arranger and book

runner, and the lenders party thereto.

Form 8-K filed November 2, 2020

10 (b)(1)

Master Security Agreement, dated as of October 20, 2020,

among FGI Equipment Finance LLC, Core Molding

Technologies, Inc. as debtor,

and each of Core Composites

Corporation and CC HPM, S. de R.L. de C.V.,

as guarantors

Incorporated by reference to Exhibit 10.2 to

Form 8-K filed November 2, 2020

10 (b)(2)

Promissory Note, dated October 20, 2020, between Core

Molding Technologies, Inc.

and FGI Equipment Finance

LLC.

Incorporated by reference to Exhibit 10.3 to

Form 8-K filed November 2, 2020

10(c)

Reimbursement Agreement, dated April

1, 1998, by and

between Core Molding Technologies, Inc. and KeyBank

National Association

Incorporated by reference to Exhibit 10(h) to

Annual Report on Form 10-K for the year ended

Incorporated by reference to Exhibit 4(c) to

31, 2003

10(d)

Core Molding Technologies, Inc. Employee Stock Purchase

Plan

Registration Statement on Form S-8

(Registration No. 333-60909).

10(d)(1)

2002 Core Molding Technologies, Inc. Employee Stock

Purchase Plan (as amended May

17, 2006)

Incorporated by reference to Exhibit 10.3 to

Current Report on Form 8-K dated May

23,

2006

10(e)

Letter Agreement Regarding Terms and Conditions of

Interest Rate Swap Agreement between KeyBank National

Association and Core Molding Technologies, Inc.

Incorporated by reference to Exhibit 10(j) to

Annual Report on Form 10-K for the year ended

Incorporated by reference to Exhibit 10(i)(1) to

31, 2003

10(e)(1)

Letter Agreement Regarding Terms and Conditions of

Interest Rate Swap Agreement between KeyBank National

Association and Core Molding Technologies, Inc.

Annual Report on Form 10-K for the year ended

31, 2008

10(f)

2006 Core Molding Technologies, Inc. Long Term Equity

Incentive Plan as amended and restated effective May

12,

2017

Current Report on Form 8-K dated May

15,

2017

Incorporated by reference to Exhibit A to

10(g)

Core Molding Technologies, Inc. Executive Cash Incentive

Plan

Definitive Proxy Statement on Schedule 14A,

dated April

8, 2016

Exhibit No.

Description

Location

10(h)

Core Molding Technologies,

Inc. Salaried

Employee Bonus

Plan

Current Report on Form 8-K dated December 9,

2020

10(i)

Form of Amended

and Restated Executive Severance

Agreement between

Core Molding

Technologies, Inc.

and

certain executive officers

Incorporated by reference to Exhibit 10.2 to

Current Report on Form 8-K dated December 29,

2008

10(j)

Form of Amended and Restated Restricted Stock Agreement

between Core Molding Technologies, Inc. and certain

executive officers

Current Report on Form 8-K dated January

2008

10(k)

Form of Executive Severance Agreement between Core

Molding Technologies, Inc. and certain executive officers

Incorporated by reference to Exhibit 10.4 to

Current Report on Form 8-K dated May 23, 2006

10(l)

Form of Restricted Stock

Agreement between Core

Molding

Technologies, Inc.

and certain

executive officers

Incorporated by reference to Exhibit 10.2 to

Current Report on Form 8-K dated May

15, 2012

10(m)

Form of Award for

Stock Appreciation Rights between

Core

Molding Technologies, Inc. and certain executive officers

Current Report on Form 8-K filed M

20, 2019

10(n)

Form of Executive Employment Agreement,

dated October

2018, between

David L.

Duvall and

Core Molding

Technologies, Inc.

current report on Form 8 -K filed November

16,

2018.

10(o)

First Amendment to

Executive Employment

Agreement,

effective as

of December

30, 2019,

by and

between Core

Molding Technologies, Inc. and David L. Duvall

Current Report on Form 8-K filed January 3,

2020.

10(p)

Confidential Release

Agreement, dated

as of

January 28,

2020, by and

between Core Molding

Technologies, Inc.

and

Terrence J. O’Donovan

Current Report on Form 8-K dated January 30,

2020

Computation of Net Income per Share

Exhibit

11 omitted

because the

required

information is Included in Notes to Financial

Statements in Part

II, Item 8

of this Annual

Report on Form 10-K

List of Subsidiaries

Consent of Crowe LLP

Powers of Attorney

31(a)

Section

302 Certification by

David L. Duvall,

President,

Chief Executive Officer, and Director

31(b)

Section

302 Certification by John P.

Zimmer, Vice President,

Secretary, Treasurer, and Chief Financial Officer

32(a)

Certification of David

L. Duvall, Chief Executive

Officer of

Core Molding Technologies,

Inc., dated March

11, 2021,

pursuant to 18 U.S.C. Section

1350

32(b)

Certification of

John P.

Zimmer, Chief

Financial Officer

Core Molding Technologies,

Inc., dated March

11, 2021,

pursuant to 18 U.S.C. Section

1350

101.INS

XBRL Instance Document

Filed Herein

101.SCH

XBRL Taxonomy Extension Schema Document

Filed Herein