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Securities and Exchange Commission

July 5, 2019

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July 5, 2019

VIA EDGAR CORRESPONDENCE

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Attention:   Ms. SiSi Cheng

Mr. John Cash

Re:    Core Molding Technologies, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2018

Filed March 18, 2019

Form 10-Q for the Quarter Ended March 31, 2019

Filed May 9, 2019

File No. 001-12505

Ladies and Gentlemen:

On behalf of Core Molding Technologies, Inc. (the “Company”), I am responding to the comments of the staff (the “staff”) of the Securities and Exchange Commission (the “Commission”) set forth in your letter dated June 12, 2019 with respect to the above referenced filing.  To facilitate the staff’s review, this letter includes each of the staff’s comments in italics, followed by the Company’s response to the staff’s comments.

Form 10-Q for the Quarter Ended March 31, 2019

Item 4. Controls and Procedures, page28

1.

 Please revise to disclose any change in your internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or reasonably likely to materially affect, your internal control over financial reporting. Refer to Item 308 (c) of Regulation S-K.

Response: The Company acknowledges the staff’s comment and confirms that there were no material changes to the Company’s internal control over financial reporting for the three months ended March 31, 2019.  In future filings the Company will disclose any change in the Company’s internal control over financial reporting that has materially affected, or reasonably likely to materially affect, the Company’s internal control over financial reporting in accordance with Item 308(c) of Regulation S-K, or otherwise confirm that no such change had occurred for the period presented by adding the following statement as appropriate in Item 4, Controls and Procedures “There were no changes in internal controls over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred in the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.”

Form 10-K for the Year Ended December 31, 2018

Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources

2.

 We note that as of December 31, 2018, you were in violation of the financial covenants associated with the loans made under the A/R Credit Agreement and that you subsequently entered into an amendment which waived the non-compliance as of

Core Molding Technologies, Inc. • 800 Manor Park Drive • Columbus, OH 43228 • (614) 870-5000

Securities and Exchange Commission

July 5, 2019

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December 31, 2018 and established new covenant levels. Please revise to disclose the specific terms of any significant financial covenants that you are subject to, including the required and actual ratios/amounts as of each reporting date.

Response: The Company acknowledges the staff’s comment and will include in future filings enhanced disclosure with regard to significant financial covenants, including the required and actual ratios/amounts, as set forth below (which actual amounts as set forth below are reflective as of March 31, 2019, but will be updated appropriately for each reporting period):

Bank Covenants

The Company is required to meet certain financial covenants included in the A/R Credit Agreement with respect to leverage ratios and fixed charge ratios and capital expenditures.  As of March 31, 2019, the Company was in compliance with its financial covenants associated with the loans made under the amended A/R Credit Agreement as described above. While management believes it will be able to meet its future covenants as established in the First Amendment, the ability to meet these covenants relies on certain operational and financial improvements consistent with our planned turnaround and expected timetable. Should these improvements not materialize in the time frame planned, it could impact our ability to meet future covenants.

The following table presents the financial covenants specified in our A/R Credit Agreement, as modified by the First Amendment, and the actual covenant calculations as of March 31, 2019:

 Financial Covenants

 Actual Covenants

as of March 31,2019

Fixed Charge Coverage Ratio (1)

 Minimum 1.25

 1.62

Leverage Ratio (2)

 Not applicable

 Not applicable

(1)

 Fixed charge coverage ratio excludes unfunded capital expenditures from covenant computation through September 30, 2019.  The terms of the Amended Credit Agreement provide that the fixed charge coverage ratio will increase to a minimum of 1.50 as of September 30, 2019, and thereafter decrease to a minimum of 1.00 and 1.10 on each of December 31, 2019 and March 31, 2020, and from June 30, 2020 and thereafter set at a minimum of 1.15

(2)

 Effective December 31, 2019 and thereafter on a quarterly basis, the Company will be required to maintain a Leverage Ratio of 3.25 or lower.

The amended A/R Credit Agreement also provides a Capital Expenditure Limit Covenant, whereby capital expenditures as defined in the A/R Credit Agreement are limited to an aggregate of $7,500,000 for the six months ended June 30, 2019 and $12,500,000 for the twelve months ended December 31, 2019.

Notes to Financial Statements

(1)Basis of Presentation, page 40

3.

 Please expand your disclosure to clarify if your two reporting units, Core Traditional and Horizon Plastics, are two individual operating segments that are being aggregated into one reportable operating segment based on the guidance in ASC 280-10-50-11, or if you only have one operating segment based on the guidance in ASC 280-10-50-1. If you have multiple operating segments that are being aggregated into one reportable segment, please also expand your disclosures to clarify that all of the requirements in ASC 280-10-50-11 have been met and provide the information required by ASC 280-10-50-21. If you believe that you only have one operating segment, please provide us with and disclose your analysis under ASC 280-10-50-1, including a discussion of the frequency and contents of the discreet information for the two reporting units that is regularly reviewed by your CODM to allocate resources and assess performance.

Response: The Company acknowledges the staff’s comment and hereby confirms that the Company’s two reporting units are components of one operating segment based upon the guidance set forth in ASC Topic 280-10-50-1.  The Company's analysis with regard to this approach are set forth below.

In future filings, the Company will modify its disclosures in Note 1 Basis of Presentation as follows:

Securities and Exchange Commission

July 5, 2019

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“The Company operates in one operating segment as a molder of thermoplastic and thermoset (plastic) structural products.  The Company’s operating segment consists of two component reporting units, Core Traditional and Horizon Plastics.  The Company produces and sells molded products for varied markets, including medium and heavy-duty trucks, automobiles, marine, construction and other commercial markets.”

Based on ASC Topic 280-10-50-1, the objective of requiring disclosures about segments of a public entity and related information is to provide information about the different types of business activities in which a public entity engages and the different economic environments in which it operates, to help users of the public entity’s financial statements do all of the following:

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 Better understand the public entity’s performance

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 Better assess its prospects for future cash flows

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 Make more informed judgments about the public entity as a whole.

The Company produces structural plastic parts at all of its manufacturing locations, and does not compile discrete financial information for each industry that the Company services. As a result, providing additional information would not provide users of the financial statements with any relevant information about different types of business activities (as we engage in one activity) or different economic environments (as such information is not available).

The Company has concluded that it operates as one segment. Based on guidance of ASC Topic 280-10-50-1, an operating segment is a component of a public entity that has all of the following characteristics:

•

 It engages in business activity from which it may earn revenues and incur expenses;

•

 Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decision about resources to be allocated to the segment and assess performance;

•

 Its discrete financial information is available.

The Company's CODM uses information primarily received from monthly financial reporting packages, quarterly marketing and sales updates, and weekly and monthly manufacturing operations Key Performance Indicator (“KPI”) reports to evaluate Company performance and allocate resources. The information from these reports used by the CODM includes:

•

 Consolidated sales trends by customer (including daily and weekly consolidated sales reports, monthly and quarterly financial reporting packages and quarterly marketing and sales updates) comparing current year activity to plan and prior year.

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 Consolidated and manufacturing location operating statements (included in monthly financial reporting package) which the CODM uses to evaluate sales and cost performance of the consolidated Company.  In addition, the CODM uses this information to evaluate the cost performance of the individual manufacturing locations and corporate cost centers.

•

 Consolidated balance sheet, capital spending, tooling program status reports and accounts receivable reports (included in monthly financial reporting packages).

•

 Operating cost and performance metrics such as safety, quality, delivery, human resource turnover and absenteeism by manufacturing location (included in manufacturing operations reviews and reports).

Due to the nature of the Company’s business, the CODM primarily evaluates performance of the Company and allocates resources of the Company based on consolidated sales of the Company, including location of new programs, and costs and operational performance of the manufacturing locations as further explained below:

•

 Consolidated Sales By Customer - Sales performance is evaluated based on the total sales for each customer. A majority of customers have product produced and sold from multiple manufacturing facilities. All customer sales activities and contracting are conducted with our customers’ North American corporate offices. Product shipped from any of our locations is based on sales and price agreements established on a company-wide basis (our manufacturing location managers do not have the ability to modify customer pricing). The CODM is primarily focused on each customer’s revenue in total versus budget, as compared to the prior year as well as new business opportunities. To evaluate performance or determine resource allocation for a specific customer the CODM interacts with the Company’s corporate sales team, who is responsible for all Company sales. Each customer is assigned a corporate sales account manager, who is responsible to manage all aspects of the customer relationship regardless of the production location. It is the account manager’s responsibility to be knowledgeable about all facets of a customer’s

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account and to correspond with a customer related to new sales activities, production levels, product requirements, new and terminating product programs, production locations, best manufacturing processes to meet customer needs, pricing terms and any other customer developments. The Company has historically shown its willingness to use resources to expand manufacturing processes at its operating facilities to satisfy requests from its customers. Given the production process acquired with the Horizon Plastics acquisition, the Company anticipates similar cases where the Company will be able to expand market reach or better service existing customers by relocating or launching Horizon Plastics production processes in other facilities.  The account managers report to the Executive Vice President of Marketing & Sales, who is responsible for all the Company’s sales. The account managers and Executive Vice President of Marketing & Sales are not assigned to production facilities and have no responsibility for production activities.

•

 Manufacturing Cost by Location - The Company’s manufacturing locations are responsible for manufacturing activities. Accordingly these facilities are evaluated on the costs of manufacturing, quality, engineering, and delivery. Actual variable and fixed manufacturing costs are evaluated versus targets levels. Manufacturing locations are considered cost centers. Manufacturing location managers do not have any responsibility for revenues or the ability to affect sales other than to insure shipping is complete. The Company’s structure is that manufacturing location managers report to the Executive Vice President of Operations, who is responsible for manufacturing.

The Company’s CODM regularly reviews the consolidated results of the Company to evaluate performance of the Company and to determine allocation of resources. The individual manufacturing locations are considered cost centers, similar to the Company’s support department cost centers. The manufacturing locations and support departments costs and operations are regularly reviewed to assess performance, as cost centers and not as segments as the revenue performance is not evaluated at the manufacturing location level.

Per ASC Topic 280-10-50-3, the method for determining what information to report is referred to as the “management approach.” The management approach is based on the way that management organizes the segments within the public entity for making operating decisions and assessing performance.

The Company had two reporting units in 2018, Core Traditional and Horizon Plastics, the former of which consists of the Company’s historical business prior to the acquisition of Horizon Plastics and the latter consisting of the business obtained with Horizon Plastics acquisition in January 2018.  The Company determined that it had two reporting units due to the way the reporting units were managed in 2018 and the on-going integration processes of Horizon Plastics.

In January 2018 the Company acquired substantially all of the assets and assumed specified liabilities of Horizon Plastics and thereafter began integration plans to establish a financial reporting framework and organizational structure consistent with the Company’s organization and reporting framework as described above. Horizon Plastics’ management team remained in place post acquisition and continued to manage the day-to-day operating activities for the reporting unit in 2018, while the integration process was implemented. Due to the complexity of the integration and operational challenges at the Core Traditional business that required extensive executive level focus, the integration of Horizon Plastics has not been fully completed.

The Chief Executive Officer, who serves as the CODM, oversaw the operations of Horizon Plastics during 2018 while the integration process proceeded. The Chief Executive Officer met with Horizon Plastic's customers, assisted Horizon Plastics with significant customer negotiations, advised on key employee changes, and provided guidance on operational, quality and safety changes required as part of initial integration.  The Horizon Plastics management team performed day-to-day activities such as sales inquiry response, customer ordering and deliveries, material proc