Cuộc họp công bố kết quả kinh doanh Quý 3 năm tài chính 2026 của Core Molding Technologies (CMT): Tăng trưởng doanh thu, áp lực biên lợi nhuận và triển vọng năm 2027

Core Molding Technologies (NYSE American: CMT) đã báo cáo doanh số tăng trưởng mạnh mẽ trong quý 3 năm tài chính 2026, nhờ sản lượng xe tải tăng, việc triển khai các chương trình mới và doanh thu đáng kể từ mảng khuôn mẫu. Khả năng sinh lời giảm do công ty phải gánh chịu cơ cấu doanh thu khuôn mẫu có biên lợi nhuận thấp hơn, chi phí đưa vào vận hành tại Mexico và chi phí tối ưu hóa mạng lưới sản xuất.

Các điểm chính

• Doanh số sản xuất tăng 19,7% so với cùng kỳ năm ngoái, trong khi tổng doanh thu thuần bao gồm mảng khuôn mẫu tăng hơn 54%.
• Doanh số xe tải hạng trung và hạng nặng tăng 44,8%, sản phẩm xây dựng tăng 17,7%, và doanh thu mảng công nghiệp và tiện ích tăng 21,5%.
• Lợi nhuận ròng đạt 1,5 triệu USD, tương đương 0,17 USD trên mỗi cổ phiếu pha loãng. EBITDA điều chỉnh đạt 6,4 triệu USD, tương đương 7,1% doanh số so với mức 11% của cùng kỳ năm trước.
• Core Molding đã giành được các hợp đồng kinh doanh mới trị giá 30 triệu USD tính từ đầu năm đến nay. Ban lãnh đạo tiếp tục tập trung vào mục tiêu cả năm là 50 triệu USD, mặc dù thời điểm trao hợp đồng có thể kéo dài sang đầu năm 2027.
• Công ty tái khẳng định dự báo năm tài chính 2026 với tổng doanh số đi ngang đến tăng trưởng khoảng 5% và biên lợi nhuận gộp từ 16% đến 17%.
• Ban lãnh đạo kỳ vọng lợi ích từ các chương trình mới, việc mở rộng công suất tại Mexico và tiết giảm chi phí từ mạng lưới sản xuất sẽ thể hiện rõ nét hơn trong năm 2027 thông qua tăng trưởng doanh thu, biên lợi nhuận cải thiện và khả năng tạo dòng tiền mạnh mẽ hơn.

Dữ liệu tài chính cốt lõi

Kết quả kinh doanh và hoạt động

Mảng xe tải hạng trung và hạng nặng là động lực tăng trưởng lớn nhất, với doanh số tăng 44,8% so với cùng kỳ năm ngoái. Ban lãnh đạo cho biết các nhà sản xuất thiết bị gốc (OEM) xe tải đang nỗ lực nâng cao sản lượng nhưng tiếp tục đối mặt với các hạn chế về chuỗi cung ứng. Công ty dự kiến nhu cầu xe tải sẽ duy trì ở mức mạnh mẽ cho đến nửa đầu năm 2027.

Doanh thu sản phẩm xây dựng tăng 17,7% khi các chương trình mới đi vào sản xuất. Doanh thu mảng công nghiệp và tiện ích tăng 21,5%. Mảng phương tiện thể thao động cơ trầm lắng hơn trong quý, phản ánh tính mùa vụ của phương tiện dưới nước, quá trình chuyển đổi đời xe cũng như tác động từ giá nhiên liệu và lãi suất.

Core Molding đã giành được các cơ hội doanh thu quy năm trị giá hơn 90 triệu USD từ hơn 30 chương trình trong 18 tháng qua. Khoảng hai phần ba các hợp đồng này đến từ các thị trường ngoài xe tải và phương tiện thể thao động cơ, hỗ trợ chiến lược đa dạng hóa của công ty. Bên cạnh đó, các chương trình trị giá 63 triệu USD được trao trong năm 2025 dự kiến sẽ đóng góp rõ nét hơn vào nửa sau năm 2026 và đạt công suất hàng năm đầy đủ trong năm 2027.

Cơ sở vận hành tại Monterrey đã đi vào hoạt động hoàn toàn và có thể sản xuất các sản phẩm bọt xốp cấu trúc, mạng cấu trúc và DCPD. Hai máy ép 4.500 tấn mới tại Mexico vẫn theo đúng kế hoạch sẽ đi vào hoạt động vào cuối năm. Ban lãnh đạo cho biết dự án khuôn mẫu lớn nhất gần đây nhằm phục vụ việc sản xuất trần xe Volvo, với các đợt giao hàng ban đầu có thể bắt đầu vào cuối tháng 12 năm 2026 hoặc đầu tháng 1 năm 2027. Thời điểm này phụ thuộc một phần vào tiến độ tại nhà máy Monterrey mới của Volvo.

Công ty cũng đã giành được một dự án hệ thống lưu trữ năng lượng bằng pin phục vụ hạ tầng lưới điện. Core Molding sẽ sản xuất các vỏ bọc bằng vật liệu composite được thiết kế để chống cháy, cách nhiệt và tích hợp các tính năng đúc sẵn. Ban lãnh đạo cho biết dự án đã hoàn tất khâu chuẩn bị khuôn mẫu và sắp sửa triển khai. Công ty cũng đang theo đuổi các cơ hội liên quan trong mảng hầm kỹ thuật ngầm và nắp hố ga bằng mặt phục vụ hạ tầng lưới điện, trung tâm dữ liệu và các ứng dụng xây dựng.

Dự báo của ban lãnh đạo

Core Molding tái khẳng định các kỳ vọng cho năm tài chính 2026 như sau:

• Tổng doanh số đi ngang đến tăng trưởng khoảng 5% so với cùng kỳ năm ngoái.
• Doanh thu dự án trong quý 4 đạt từ 9 triệu USD đến 11 triệu USD.
• Biên lợi nhuận gộp cả năm đạt 16% đến 17%, mặc dù quý 4 có thể thấp hơn khoảng này do cơ cấu mảng khuôn mẫu.
• Chi phí vốn đạt từ 28 triệu USD đến 30 triệu USD, bao gồm khoảng 20 triệu USD dành cho việc mở rộng tại Mexico.
• Chi phí cuối cùng liên quan đến Mexico và tối ưu hóa mạng lưới sản xuất đạt khoảng 1 triệu USD trong thời gian còn lại của năm 2026, sau khi đã phát sinh 5,2 triệu USD trong 9 tháng đầu năm.

Ban lãnh đạo kỳ vọng việc tối ưu hóa mạng lưới sản xuất sẽ mang lại khoản tiết kiệm hàng năm thường xuyên khoảng 1 triệu USD bắt đầu từ năm 2027. Về dài hạn, công ty tiếp tục hướng tới mục tiêu tỷ suất lợi nhuận trên vốn sử dụng đạt 14%.

Đối với năm 2027, ban lãnh đạo cho biết chi tiêu vốn sẽ trở lại mức bình thường hơn. Chi phí vốn duy trì được mục tiêu ở mức 3% đến 3,5% doanh số, tương đương khoảng 10 triệu USD hàng năm theo quy mô doanh thu hiện tại. Công ty cũng kế hoạch công bố dự báo cho năm tài chính 2027 sớm hơn mốc thời gian tháng 3 theo thông lệ lịch sử, với tháng 1 được xác định là thời điểm muộn nhất dự kiến.

Rủi ro và các mảng trọng tâm

Tỷ trọng cao bất thường của doanh thu mảng khuôn mẫu có biên lợi nhuận thấp hơn đã làm giảm biên lợi nhuận báo cáo. Chi phí đưa vào vận hành tại Mexico và chi phí tối ưu hóa mạng lưới sản xuất cũng gây áp lực lên lợi nhuận từ hoạt động kinh doanh, EBITDA điều chỉnh và tỷ suất lợi nhuận trên vốn sử dụng.

Vốn lưu động vẫn ở mức cao do triển khai các chương trình mới và quy mô sản xuất lớn hơn. Thời điểm ghi nhận doanh thu sản xuất từ chương trình trần xe Volvo phụ thuộc vào việc lắp đặt nhà máy của khách hàng và mức độ sẵn sàng tiếp nhận sản phẩm.

Ban lãnh đạo xác định các hạn chế về chuỗi cung ứng là yếu tố kìm hãm sản lượng xe tải. Nhu cầu mảng phương tiện thể thao động cơ vẫn nhạy cảm với giá nhiên liệu, lãi suất và xu hướng sản xuất theo mùa.

Mục tiêu 50 triệu USD hợp đồng mới của công ty phụ thuộc vào việc khách hàng đưa ra quyết định cuối cùng đối với một số dự án. Một số cơ hội vẫn cạnh tranh gay gắt, và các hợp đồng dự kiến trao trong 30 đến 60 ngày tới có thể chuyển sang tháng 1 hoặc tháng 2. Ngay cả sau khi được trao hợp đồng, thời gian chuẩn bị khuôn mẫu và triển khai có thể kéo dài từ 9 đến 18 tháng.

Điểm nổi bật trong phần Q&A với chuyên viên phân tích

• Triển vọng mảng xe tải: Ban lãnh đạo cho biết sản lượng xe tải sẽ tiếp tục tăng cho đến cuối năm và duy trì ở mức mạnh mẽ trong nửa đầu năm 2027. Kế hoạch của các hãng OEM giả định có một giai đoạn chuyển tiếp đối với công nghệ khí thải thay vì thay đổi đột ngột vào ngày 1 tháng 1 năm 2027.
• Danh mục dự án kinh doanh mới: Khoảng 6 dự án đang tiến gần đến quyết định của khách hàng. Ban lãnh đạo bày tỏ niềm tin cao đối với một số cơ hội nhưng nhấn mạnh yếu tố không chắc chắn về thời điểm trao hợp đồng chính xác.
• Kỷ luật M&A: Core Molding tiếp tục xem xét các mục tiêu thâu tóm nhưng yêu cầu mức tỷ suất lợi nhuận mục tiêu từ 14% đến 16% vào năm thứ hai. Ban lãnh đạo cho biết sẽ không gia tăng đòn bẩy tài chính đáng kể nếu không đạt được mức lợi nhuận dự kiến đủ lớn.
• Phân bổ vốn: Công ty đã mua lại 8.411 cổ phiếu trong quý 3 với mức giá trung bình là 22,71 USD và khoảng 106.000 cổ phiếu trong tháng 10 ở mức 23,42 USD. Core Molding đã đạt mục tiêu mua lại 2,5 triệu USD hàng năm và không có kế hoạch mua lại thêm trong thời gian còn lại của năm 2026.
• Ưu tiên đầu tư tăng trưởng tự thân: Ban lãnh đạo tiếp tục ưu tiên đầu tư vào thiết bị và khuôn mẫu gắn liền với các chương trình khách hàng mới, đặc biệt là khi lợi nhuận và khả năng thực thi nằm trong tầm kiểm soát của công ty.

Toàn văn biên bản cuộc họp kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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.