コア・モールディング・テクノロジーズ（CMT）2026年度第3四半期決算説明会：売上成長、マージン圧迫、2027年見通し

Core Molding Technologies（NYSE American: CMT）は、トラック向け出荷量の増加、新規プログラムの立ち上げ、および大幅な金型売上高に支えられ、2026年度第3四半期に堅調な売上成長を記録したと発表しました。利益率は、粗利益率の低い金型製品構成比率の拡大、メキシコ工場の試運転コスト、ならびに製造拠点の最適化費用を吸収したため低下しました。

主要な要点

• 製品売上高は前年同期比19.7%増加し、金型を含む総純売上高は54%以上増加しました。
• 中型・大型トラック向け売上高は44.8%増加、住宅・建設資材向けは17.7%増加、産業・ユーティリティ向け売上高は21.5%増加しました。
• 純利益は150万ドル（希薄化後1株当たり0.17ドル）となりました。調整後EBITDAは640万ドルで、売上高比率は前年同期の11%に対し7.1%となりました。
• Core Moldingは年初来で3,000万ドルの新規ビジネス案件を獲得しました。受注決定の時期が2027年初頭にずれ込む可能性はあるものの、経営陣は通期目標である5,000万ドルの達成に引き続き注力しています。
• 同社は、総売上高が前年並みから約5%の成長、売上総利益率が16%から17%になるとする2026年度の業績予想（ガイダンス）を再確認しました。
• 経営陣は、新規プログラム、メキシコでの生産能力拡大、拠点削減によるコスト削減の効果が、売上高の成長、利益率の改善、強力なキャッシュ創出を通じて、2027年に一層顕著になると見込んでいます。

主要財務データ

事業および営業業績

中型・大型トラック部門が最大の成長ドライバーとなり、売上高は前年同期比44.8%増加しました。経営陣によると、トラックOEM各社は増産を試みているものの、サプライチェーンの制約に引き続き直面しています。同社はトラック需要が2027年上半期にかけて堅調に推移すると見込んでいます。

住宅・建設資材向け売上高は、新規プログラムの生産開始に伴い17.7%増加しました。産業・ユーティリティ向け売上高は21.5%増加しました。パワースポーツ部門は、水上バイクの季節性、年式（モデルイヤー）切り替え、および燃料価格や金利の影響を反映し、当四半期は軟調となりました。

Core Moldingは過去18か月間で、30以上のプログラムにわたり年換算で9,000万ドルを超える売上機会を獲得しました。これらの受注の約3分の2はトラックおよびパワースポーツ以外の市場からのものであり、同社の事業多角化戦略を裏付けています。これとは別に、2025年に受注した6,300万ドル規模のプログラムは、2026年下半期により本格的な貢献を開始し、2027年中に年換算ベースでのフル操業ペースに達する見込みです。

モンテレイ拠点（工場）は完全稼働しており、構造用フォーム、構造用ウェブ、およびDCPD（ジシクロペンタジエン）製品を生産可能です。メキシコの新しい4,500トンプレス機2台は、予定通り年内に稼働を開始する見込みです。経営陣によると、直近で最大規模の金型プロジェクトはボルボ向けルーフ生産をサポートするものであり、初期出荷は2026年12月下旬または2027年1月初旬に開始される可能性があります。この時期は、ボルボの新しいモンテレイ工場の進捗状況にも一部依存します。

同社はまた、電力網インフラ向けバッテリーエネルギー貯蔵プロジェクトを受注しました。Core Moldingは、難燃性、耐火性、および一体成形機能を備えた複合材料製エンクロージャー（筐体）を製造します。経営陣によると、このプロジェクトは金型製作が完了し、立ち上げが近づいています。同社はまた、電力網、データセンター、建築用途向けの地下ユーティリティボルトおよびフラッシュカバーにおける関連機会も追求しています。

経営陣による業績見通し（ガイダンス）

Core Moldingは、2026年度について以下の見通しを再確認しました。

• 総売上高は前年比で横ばいから約5%の成長。
• 第4四半期のプロジェクト売上高は900万ドルから1,100万ドル。
• 通期の売上総利益率は16%から17%。ただし、第4四半期は金型製品構成比の影響によりこの範囲を下回る可能性があります。
• 設備投資額は2,800万ドルから3,000万ドル（メキシコでの拡張費用約2,000万ドルを含む）。
• 2026年度残りの期間におけるメキシコ関連および拠点最適化の最終費用は約100万ドル（最初の9か月間で発生した520万ドルに続くもの）。

経営陣は、拠点最適化によって2027年から年間約100万ドルの継続的なコスト削減効果が生じると見込んでいます。長期的には、引き続き14%の使用資本利益率（ROCE）を目標としています。

2027年について、経営陣は設備投資がより正常な水準に戻る見通しであることを示しました。維持的設備投資は売上高の3%〜3.5%、現在の売上水準で年間約1,000万ドルを目標としています。また、同社は2027年度の業績予想を例年の3月よりも早く発表する計画であり、遅くとも1月までに発表される予定です。

リスクと注力分野

粗利益率の低い金型売上高の比率が異常に高かったことが、報告された利益率を押し下げました。また、メキシコでの試運転費用や拠点最適化費用も、営業利益、調整後EBITDA、および使用資本利益率の圧迫要因となりました。

運転資本は、新規プログラムの立ち上げと生産水準の上昇により高水準にとどまっています。ボルボ向けルーフプログラムからの量産売上高の発生時期は、顧客の工場での設備設置および製品受入態勢の進捗に依存します。

経営陣は、サプライチェーンの制約がトラック生産の抑制要因になっていると指摘しました。パワースポーツ需要は、燃料価格、金利、および季節的な生産パターンに対して引き続き敏感です。

同社の5,000万ドルの新規受注目標は、顧客が複数のプロジェクトで最終決定を下すかどうかに依存しています。一部の機会では競合が続いており、30日〜60日以内に見込まれていた受注決定が1月や2月にずれ込む可能性があります。また、受注後であっても、金型製作および立ち上げのリードタイムは9か月〜18か月かかる場合があります。

アナリスト質疑応答のハイライト

• トラックの見通し：経営陣によると、トラックの生産は年末にかけて増加し続け、2027年上半期も堅調を維持する見込みです。OEMの計画では、2027年1月1日に急激な変化が生じるのではなく、排ガス技術の移行期間が想定されています。
• 新規ビジネスのパイプライン：約6件のプロジェクトで顧客による決定が近づいています。経営陣はいくつかの機会に高い確信を示したものの、正確な受注時期に関する不確実性を強調しました。
• M&Aの規律：Core Moldingは買収候補の検討を続けていますが、2年目までに14%〜16%のリターン目標を定めています。経営陣は、十分な予想リターンが得られない限り、大幅なレバレッジ拡大（負債の増加）は行わないと説明しました。
• 資本配分：同社は第3四半期中に平均価格22.71ドルで8,411株の自社株買いを実施し、10月には23.42ドルで約106,000株を買い戻しました。Core Moldingは年間250万ドルの自社株買い目標に達しており、2026年の残りの期間に追加の自社株買いを行う予定はありません。
• オーガニック投資の優先順位：経営陣は、新規顧客プログラムに関連する設備や金型への投資を継続して優先しており、特にリターンと実行が自社の管理下にあるプロジェクトを重視しています。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to the Core Molding Technologies Fiscal 2026 3rd Quarter Financial Results Conference Call. [Operator Instructions] please note, this event is being recorded. I would now like to turn the conference over to San Martin, 3 Part Advisors. Please go ahead.

Unknown Attendee

Good morning, everyone. Thank you for joining us for the Core Molding Technologies Conference Call to review our fiscal 2026 3rd quarter results. Joining me on the call today are the company's President and CEO, Eric Palomaki, and CFO, Alex Panda. This call is also being webcast and can be accessed through coremt.com via an audio link on the Investor Relations Events and Presentations page. Please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript treating.

Statements made in today's discussion that are not historical facts, including statements or expectations or future events or future financial performance are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Forward-looking statements are uncertain and are outside the company's control. Actual results may differ materially from those expressed or implied in today's earnings release includes our forward-looking disclosures. Risk factors and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

Core Molding Technology assumes no obligation to update or revise any forward-looking statements publicly. Management will refer to non-GAAP measures, including adjusted EPS, adjusted EBITDA, the debt to trailing 12 months EBITDA ratio, free cash flow and return on capital employed. Reconciliations to the nearest GAAP measures are available at the end of our earnings release, which has been submitted to the SEC on Form 8-K.

Now I would like to turn the call over to Eric Palomaki, Eric?

Eric Palomaki

Thank you, Sandy, and good morning, everyone. As many of you know, we hosted a successful Investor Day in September, where we outlined key initiatives supporting why core and why now. Over the last several years, we have systematically strengthened core by improving execution, deepening customer relationships, investing in our people, enhancing our manufacturing network and expanding our commercial capabilities. We believe these efforts have positioned Core to enter its next phase of growth, leveraging a proven operating platform to pursue larger opportunities with additional capacity and to build on even greater diversification across our end markets.

Over those 2 days in Brownsville and Matamoros, we communicated a clear objective to accelerate profitable growth, generate increasing levels of cash flow and deliver attractive returns on capital for our shareholders. Our experienced teams work across materials, engineering designs, manufacturing, quality and operations to solve customer problems and execute complex programs. With culture as a competitive advantage, we have captured some of the industry's highest employee retention rates with employee turnover at an all-time low, just below 7% for the year.

During 2026, we are investing a total of 18,000 hours an employee and internship training and management development. The vast majority of our leadership roles have been filled internally over the last several years. These purposeful investments in our team continue to strengthen the culture that we view as Core's highly competitive, fortified moats. We hold ourselves accountable through a measured scorecard that tracks both financial results and operating indicators that drive long-term performance improvements such as safety, quality, cost, delivery and customer satisfaction, talent development and commercial execution are helping us hold a stronger company and support our long-term growth objectives.

Turning to our third quarter results, the investments we have been making across the business translated into strong commercial momentum and revenue growth. Production sales grew 19.7% year-over-year and total net revenue, including tooling expanded by over 54% and Year-to-date, we've secured $30 million in new wins as we continue to execute on our Invest for Growth strategy. Depending on the timing of the fourth quarter awards, we remain on track to achieve our full year objective of $50 million in additional new wins.

As expected, margins were impacted by the mix of tooling revenue and onetime commissioning costs as we ramp up our Mexico expansion. This year's must-win battle included successfully executing our Mexico expansion strategy while continuing to optimize our manufacturing footprint. Today, Monterrey is fully operational, producing structural foams, structural web and DCPD products with integrated capabilities, while 2 new 4,500-ton presses in memories remain on track to be operational by year-end.

At the same time, we are optimizing our manufacturing footprint by advancing our center of excellence strategy by consolidating Hood and mattering closure systems in Gapany South Carolina, which Alex will discuss more in a moment. Together, these initiatives expand capacity, enhance operational efficiency and create a scalable platform for future growth across multiple end markets. Importantly, we executed these products with minimal disruption to customer service or our ongoing operations.

Our teams continue to deliver strong performance across the network while simultaneously installing new capacity, relocating assets and preparing for future program launches. I'm exceptionally proud of what our team has accomplished so far this year, successfully executing a greenfield start-up expanding capacity, optimizing our manufacturing footprint and supporting our new program launches simultaneously require tremendous commitment and operational discipline. The professionalism and dedication demonstrated across the organization give me great confidence in our ability to execute the next age of the growth strategy.

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

Alex Panda

Thank you, Eric, and good morning, everyone. For the third quarter, production sales grew by 19.7% year-over-year. The medium and heavy-duty truck vertical increased by 44.8% and New program launches increased building product sales by 17.7% year-over-year and Industrial and Utilities end market revenues grew by 21.5% over the prior year. As we discuss with investors in September, a major tooling project contributed revenue earlier than originally planned due to a change in our revenue recognition methodology for our customer. Higher production volumes improved fixed cost absorption.

However, margins were impacted by the unusually high mix of lower margin tooling revenue and moderate commissioning costs. Excluding the tooling mix impact, and onetime commissioning charges, gross margin was approximately 18.6%, consistent with our historical guidance of 17% to 19%. SG&A expenses were $11 million or 13.1% of sales. And excluding $1.8 million of onetime Mexico expansion and footprint optimization expenses, SG&A would have been 11.1% of sales compared to 13% in the prior year period.

As part of our portfolio footprint optimization efforts, we expect over $1 million in annualized savings beginning in 2027, which I will discuss more in a moment. Operating income for the quarter was $1.6 million compared to $2.6 million in the prior year period, reflecting elevated SG&A investments discussed above. Net interest expense was $39,000 in the third quarter compared to $34,000 in the prior year quarter. The quarter's tax rate benefited from country mix and the impact of Mexico-related expansion expenses. Net income was $1.5 million or $0.17 per diluted share. Adjusted EBITDA was $6.4 million, representing 7.1% of sales compared with 11% in the prior year period.

Our results reflect deliberate investments that position us to deliver accelerated growth, capacity and positive cash flow in 2027. We generated net cash provided by operating activities of $3.4 million during the first 9 months of the fiscal year. We are carefully managing elevated working capital tied to new launches and higher production levels. Capital expenditures to date totaled $19.7 million, primarily related to our Mexico expansion initiatives. For full year 2026, we expect capital expenditures to be $28 million to $30 million, with approximately $20 million related to our Mexico expansions.

As Eric mentioned, our work in Monterrey is now complete positioning us with meaningful capacity to support launch programs in future growth opportunities. We ended the quarter with $5.4 million in cash and $4.8 million outstanding on our revolver. Our balance sheet remains a significant strategic advantage. We have substantial liquidity, minimal debt and ample flexibility to support future growth initiatives. Our capital structure includes a $50 million revolving credit agreement and a dedicated $50 million delayed draw acquisition facility, both of which provide us with meaningful capacity to pursue attractive M&A opportunities while maintaining a conservative financial profile.

Return on capital employed was 5% based on trailing 12-month pretax operating income, which is impacted by our onetime investments. As we continue to launch new programs, we expect this metric to improve by leveraging top line performance more effectively and driving higher asset utilization and returns. We fully expect return on capital employed to strengthen to our long-term goal of 14%. Additional details, including GAAP to non-GAAP reconciliations are available on our earnings release. Given our confidence in the long-term outlook, we continue to repurchase shares during both the third quarter and October.

We repurchased 8,411 shares during the third quarter at an average price of $22.71. Then in October, we repurchased another $106,000 a shares at an average price of $23.42. Our capital allocation philosophy remains unchanged. We will continue to invest in the highest return opportunities available to us whether through organic growth initiatives, strategic acquisitions or opportunistic share repurchases with significant available liquidity and a growing pipeline of opportunities we believe we are well positioned to deploy capital from a position of strength while maintaining a disciplined focus on long-term shareholder value creation.

Today, we are reiterating our fiscal 2026 guidance and continue to expect the following: one, total sales to be flat to up approximately 5% year-over-year, with $9 million to $11 million expected in total project revenue for the fourth quarter. The majority of the 63 million new program awards secured in 2025 begin contributing meaningfully in the second half of 2026 and reach full annualized run rates during 2027. Three, truck production volumes continued to improve, supporting a more favorable demand environment heading into 2027.

And lastly, full year gross margin for 2026 is expected to be between 16% to 17%, although fourth quarter may fall below that range based on tooling mix. Regarding nonrecurring costs, the combination of the Mexico-related and portfolio optimization costs totaled $5.2 million through the first 9 months of the year. And with the majority of the work now complete, we expect $1 million of final optimization costs to be incurred during the balance of 2026. This footprint optimization initiative is consistent with the strategy we outlined in detail at our Investor Day creating specialized centers of excellence across our manufacturing network. Similar to Columbus for SMC compounding in Monterrey for DCPD and top code paint Gasmig is becoming a dedicated hub for hood and battery enclosure systems.

Concentrating these activities in specific facilities allows us to leverage decades of manufacturing experience, improve operational efficiency and create a stronger platform to support future growth opportunities while generating meaningful cost savings over time. While this project will result in approximately $2 million in onetime costs for the 2026 2nd half, we expect it to generate recurring annual savings of approximately $1 million and enhance the business' long-term scalability.

With that, I will turn the call back to Eric.

Eric Palomaki

Thank you, Alex. One of the clearest indicators that our strategy is working is the commercialized business we've already secured. Over the last 18 months, we have won over $90 million of annualized revenue opportunities spending more than 30 new programs across a broad range of customers, markets and applications. Importantly, 2/3 of those wins have come from diversified end markets outside of truck and power sports validating our efforts to broaden the business while leveraging our core manufacturing and engineering capabilities.

These are not theoretical opportunities. They are customer awards that are moving into launch and production providing tangible visibility into our future growth trajectory. From the outset, we knew 2026 would be a year of investment, execution and positioning the business for our next phase of growth. We absorbed start-up costs associated with our Mexico expansion, advance our footprint optimization initiatives and continued investing in people, capabilities and infrastructure needed to support our strategic expansion. While those investments impacted near-term profitability and cash flow this year, these were intentional decisions designed to strengthen our competitive position and create longer-term value.

Looking ahead, we believe 2027 and beyond represent the period when the benefits of these investments become increasingly visible through accelerating revenue growth or margins, improved cash generation and expanding returns on capital. As we wrap up, I'd encourage investors to review our Investor Day materials if you have not the so already. The presentations provide a detailed look of the strategy, investments and growth opportunities that are shaping Core's next phase of development and support our confidence in the long-term outlook for the business.

With that, I want to thank our employees for embracing change, executing at high levels and maintaining an unwavering commitment to our customers. Their efforts have enabled us to undertake some of the most significant operational initiatives in the company's 30-year history while continuing to deliver to our customers every day. I also want to thank our customers, suppliers, shareholders and Board of Directors for their continued trust and support. We remain focused on converting today's investments into tomorrow's growth, profitability, cash generation and long-term shareholder value creation.

Before we move to questions, I would note that we will be participating in the Southwest IDEAS Conference in Dallas on November 19. We look forward to meeting with investors and discussing the meaningful opportunities we see ahead for Core.

With that, we'll open the line for questions. Operator?

Operator

[Operator Instructions]

And the first question will be from Chip Moore with Roth Capital.

質疑応答

Alfred Moore

Eric and Alex, I wanted to ask, I guess, more end market related, particularly trucking, it sounds like confidence in volumes there is pretty solid. Just maybe you can expand on what you're seeing. I know there was some emission mandates out there, but what's your sort of view into early 2027 on the trucking side?

Eric Palomaki

Yes, thanks for the question. On the end market for truck, there's no doubt all of the truck OEMs are increasing to the point we're trying to increase and running into supply chain challenges. So they would build even more trucks in the fourth quarter, I think, if they could. And we've seen that probably for the last couple of quarters and you'll see by the end of the year, the entire year will be ramping truck quarter-over-quarter-over-quarter. All of them are anticipated in the first half of '27 to remain strong. none of them are forecasting, for example, an emissions change -- January 1, '27, none of them are forecasting the first quarter to be low. They're expecting that to may continue right into next year.

So we're excited about that. from the emissions change, it seems as though I think that boat has not happened. I think it's sometime November, I'm not sure when the official response from the EPA will be out, but all of the OEMs seem prepared to deliver some of the '26 technology into '27 and have a period of transition. So it won't be a light switch change on January 1, '27. So I think that also helps lend confidence to a smoother '26 and '27 demand in the transportation industry.

Alfred Moore

Great. That's helpful. And maybe the follow-up, Power Sports, I think it was down a little bit in the quarter, although it's up here year-to-date. Just what are you seeing there with maybe the consumer is a little more challenged with some of the gas prices and things like that, but just curious on that side, what you're seeing?

Eric Palomaki

Yes. I think there's a couple of things there. Certainly, fuel prices and interest rate-sensitive product. There's no doubt you have that overlying -- our year-over-year continues. You probably heard us a few times talk about that [indiscernible] plate launch that's now about a year old. So you'll now start to see that in every comparable year-over-year. That's been a huge increase for us. And then I guess from a quarterly basis, we had a very good first quarter in Power Sports.

You would have probably noted that our first quarter earnings, I believe, Q3 tends to be a little bit softer. So with our Watercraft business, it's the end of the summer, definitely are in their model year change in Q3 and then they start ramping up Q4 and Q1 to build next summer season generally spoken as an annual type season for that Watercraft business.

Alfred Moore

Perfect. And I guess just in terms of the near-term awards, I think right to that goal of $15 million, it seems like you've got pretty good line of sight on it, specific projects, but obviously, timing can play a role there? Just sort of handicap that and what you're tracking?

Eric Palomaki

Yes, excited to be at $30 million of the $50 million. We'd like to be a little bit north of that. It seems like Q3, even last year, when we look at the data with a little bit less awards in the third quarter to us, and the fourth quarter was strong. in our pipeline. We have half a dozen projects that are kind eminent, right? There's nothing else left to do besides our customers making that final decision, being willing to embark on new tooling project or new design or whatever each 1 of them happens to be.

But we do have a number of them, and they do add up to make us get past 50. We're modeling that as that's our goal and have some pretty good confidence around a few of them.

Alfred Moore

Great. And maybe 1 last one, and you talked a lot about this in good detail at the Investor Day, but future growth, I guess, organic, inorganic, just updates where you might invest internally? And then just any update on the M&A pipeline?

Eric Palomaki

Yes, thanks. I'll let Alex comment a little bit on the M&A, but I'll start organically. We still continue to have so many opportunities, Chip. And we are -- like I said, there's half a dozen projects that could happen in the next month or 2, and we think a number of them will. It's just which ones and which 1 bleed over into January or February, but we need to have capital ready for those. And there are some substantial presses are cooling jobs and things like that, that we will always prioritize that organic growth when it's an opportunity because we really understand that part of the business, and we have a lot of control over it.

On the M&A side, we've gotten a look at a few. I'll let Alex comment on it.

Alex Panda

Yes. We've looked at a few, some of our SG&A costs in Q3 actually relate to us contracting some outside service consultants to help us through some stuff. But ultimately, we're still looking and the key there is staying disciplined to our approach and requiring that a 14% to 16% return by year 2 is the goal. And so we're not going to go out of our way and lever up the company without making sure that, that return is there. And so we're still looking through it. We're still looking at different companies and going from there.

Operator

And the next question will come from Erik Volfing from Grand Slam.

Unknown Analyst

Congratulations on everything you've achieved this year. So you mentioned in the release that you had some win in the battery energy storage systems. Could you talk a little bit about that? Is that sort of generally for the grid? Is that for data centers? Where are you seeing that rolling out?

Eric Palomaki

Yes, Eric, thanks for the question. Yes, we've won 1 major project that would be a grid infrastructure battery project. So you think of that -- the energy grid, especially in North America, probably needs a lot of upgrades. And as the consumer starts consuming a lot of energy in the afternoon and evening, there's a high energy demand load. And so the idea is that you store that energy and industrial warehouse looking buildings like very large buildings that are just giant battery banks. And so they would charge on the evening and then be able to discharge during those peak energy requirement times.

And so we would build the box that battery is stored in. So it would be a molded deep draw that is very difficult to make out of a metal and you get a lot of advantages with composites of flame proofing, fireproofing and your ability to design in molded in features in a single part. So we have 1 of those that is secured and tooled up and hoping it should be launching in the any day period. I wouldn't see it in our P&L yet today, but that should be imminently launching. And then we are quoting another 1 with a competitor that's a very, very similar design.

And I wouldn't say these are 100% are directly going into data centers, but there's definitely a lot of work on grid, data center energy. And the other project that I think is worth -- that's very closely related as some of our flush cover Vault business that we have both won this year through a transfer program. We went from transferring a tool from a competitor to us to revenue in under a month, which we were proud of any time that can happen because we often talk about the long lead time as well as 1 of the other wins this year is with a new product, and we're launching 1 size of that technology in January and one in March of '27.

So those go in the ground, certainly are related to data center related to grid related to construction market, anywhere you're doing new residential homes, they're not putting that kind of thing on poles anymore. It's all underground, and you need these vaults and flush covers every 500, 700 feet for all of the interconnect. So we love that composites goes in the ground doesn't rust, doesn't oxidize. So it's a great area for us, adjacent to both grid and data center.

Unknown Analyst

That's great. And maybe a quick 1 for Alex. With all the stuff that's going on, do you think we might get to see some guidance for 27 before the end of the year?

Alex Panda

Yes. Good question, Eric. So we've been discussing that. Historically, we've given 2027 guidance in our March earnings release. Sandy, Eric and I have all talked. We are going to put together a press release that announces it earlier. Right now, we're working on do we do it at the end of December? Do we wait for the beginning of January? But right now, our game plan would be to finalize the budget work with the Board and then give out some guidance earlier than we've historically done it. I don't know the exact timing yet, but I think -- I'm confident that the latest it would be would be January.

Operator

[Operator Instructions]

The next question is from Bill Dezellem from Titan Capital.

William Dezellem

Group of questions here. I just want to be clear that relative to the time line for the $50 million of potential business that's in your sales pipeline that -- each of those 6, you said could happen anytime in the next 30 to 60 days. Is that correct? And is there anything at all that you all need to be doing or can be doing to accelerate those wins?

Eric Palomaki

Yes. Thanks for the question. Absolutely, there's always something we can be doing with any customer. So we -- I appreciate that question and comment. And the answer is yes, awarding in the next 30 to 60 days. It doesn't mean, as I think we've talked before, it doesn't mean that it produces revenue immediately. Some of them may have still 12 -- 9, 12 months, 18-month lead time tooling or different projects.

And I can confirm for you for sure. that some of our sales team last week with a few of those customer sites. And so I am proud of the team for continuing to follow up, go make sure we're answering questions coming up with creative ways. Sometimes they're asking us about creative ways to help them with the tooling project. And so we're looking at ways that we can help them from a initial start-up costs, let's say, for some of those non-truck markets. There are areas that aren't used to having tooling spend.

Sometimes that's a little bit of a shock for them to have an initial tooling investment, and so we're trying to find ways that we can as we talked about, use our capital for organic growth. That's something we have confidence that if we can help a customer, we'd be happy to do so.

William Dezellem

And Eric, taking that just 1 step further. What's your confidence level in the 6 wins? Is it just simply a matter of time? Or is there still -- is there still a competitive battle in place?

Eric Palomaki

Some, there's a competitive battle. Some of them, it is just time. And so it's I am -- I don't want to give you hard numbers, but there might be 1 or 2 in there that I'd be 90% confident, but I don't know if it's going to be November, December or it's going to wait until January. I don't know how many people are going to watch the news all evening tonight and watch all the statisticians all night and make their big investment decisions after they see what happens tonight.

Those sorts of things certainly play into people's thinking when it comes to tariffs or build in America, we have customers that are looking for all of those different aspects. So yes, I hope that helps clarify.

William Dezellem

That is helpful. And then relative to timing, on the tooling revenues, $25 million or so this quarter, what's the timing before those tools convert to revenue or convert to revenue production.

Eric Palomaki

Yes. So the biggest tooling job for this third quarter is related to our investment in Mexico supports Volvo roofs. And we will be ready for 1 of those versions of roofs to be able to build a roof by December. So they will -- we anticipate them to start ramping next year. Ultimately, that volume is tough for us to forecast. I would hate to give you a number. But we should be ready to start shipping initial roots by the end of December or first week of January.

And I haven't gotten to visit their new plant, but I do have an invite in December to go visit the Volvo plant, and so we'll get our eyes on how far. I mean they're building a 1.7 million square foot plant just north of Monterrey, Mexico. So that will be exciting to see and where the progress is because ultimately, at least part of that is related to their success in installing their plant could be delays, could be pulled ahead. We don't necessarily know for sure.

Alex Panda

Yes, Bill, I think that's our biggest hang-up right now, too, and why it's difficult to forecast is is where -- what is the progress on Volvo's plant? We talked back at the -- on the Investor Day was there's -- I think there's an opportunity to potentially ship some roots back to the United States. We haven't got -- received an official green light from the customer on that. But we're -- we think that there's an opportunity there, but it's really going to come down to when is the Volvo plant down in Monterrey, fully operational and starting to accept product. And we really haven't received a strict time line on that from Volvo.

William Dezellem

Great. And then relative to CapEx, this year, you're spending $28 million to $30 million what is that number looking like at this point in '27?

Eric Palomaki

Yes. So when we target sustaining CapEx is in between 3% and 3.5%. When I work with the plants and give them targets for capital budget, that's where we really want to be between. We will make exceptions. And if there's a project that has a higher level of return that we feel that it's important to get done and to put in, will we go over 3.5%. Yes. But I can tell you right now with all of the with all of the investment we've done over the years I'm working with the plants to make sure that staying disciplined on those investments.

And if I were to give you a number, right, I would say now, on average, we're right around $10 million on an annual basis with our current sales level.

William Dezellem

Great. So basically, we're done with the larger CapEx numbers and that we're now back to a more normalized rate starting next year?

Eric Palomaki

Yes, correct.

William Dezellem

Great. And then 1 additional question, please. Relative to your stock repurchases, I think you said that you bought a little over 8,000 shares in the third quarter, but over 100,000 shares in the month of October. Assuming that we heard you correctly, Talk to us about the thought process and what's going or what changed in October relative to the Q3?

Eric Palomaki

Yes. So we have a long-term strategy with the stock, the stock buyback, the repurchase program. Obviously, we increased our -- the buyback price in -- starting in Q4. Our stock price also came down a little bit in Q4. And so we were buying stock. I think the average was just over $2 at the beginning of Q4. What I can tell you is when we communicated the stock buyback program, right? Our target is $2.5 million a year. We've officially hit that, and we will not be buying any more stock for the rest of the year, and then we will be reevaluating in 2027 what price is appropriate and when we will implement that.

Operator

Ladies and gentlemen, this concludes today's question-and-answer session. I would like to turn the conference back to Eric Palomaki for any closing remarks.

Eric Palomaki

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

Operator

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.