Martinrea International Inc. (TSX : MRE), a diversified and global
automotive supplier engaged in the design, development and
manufacturing of highly engineered, value-added Lightweight
Structures and Propulsion Systems, today announced the release of
its financial results for the fourth quarter ended December 31,
2021 and declared a quarterly cash dividend of $0.05 per share.
HIGHLIGHTS
Fourth Quarter 2021
- Total sales of $1,053.4 million,
down 1.6% year-over-year; production sales of $849.9 million, down
13.5% year-over-year
- Diluted net loss per share and
Adjusted Net Loss per Share(1) of $0.12
- Adjusted EBITDA(1) of $63.2
million
- Results continued to be impacted by
the global semiconductor shortage and other supply issues, sales
mix, cost inflation in materials, labour and energy, and costs
related to heavy new business launch activity
- Results improved sequentially over
the third quarter, and are expected to be notably better in the
first quarter of 2022 as we are seeing higher volumes and a more
stable production environment to start the year
- We remain confident in our 2023
outlook, including our expectation of over $200 million in Free
Cash Flow(1)
- Our net-debt-to-Adjusted EBITDA(1)
ratio was 3.11x. For bank covenant purposes, the
net-debt-to-Adjusted EBITDA(1) ratio was 2.21x, which excluded
third and fourth quarter Adjusted EBITDA(1) as per our amended
lending agreement with our banking syndicate
- New business awards of
approximately $100 million in annualized sales at mature
volumes
- Quarterly cash dividend of $0.05
declared
Full Year 2021
- Total sales of $3,784.0 million;
production sales of $3,410.1 million
- Diluted net earnings per share of
$0.45; Adjusted Net Earnings per Share(1) of $0.41
- Adjusted EBITDA of $317.6
million
- New business awards of
approximately $300 million in annualized sales at mature
volumes
- Improved safety performance with a
Total Recordable Injury Frequency (TRIF) of 1.37x, a 46%
improvement over 2020
______________________1 The Company prepares its
financial statements in accordance with International Financial
Reporting Standards (“IFRS”). However, the Company considers
certain non-IFRS financial measures as useful additional
information in measuring the financial performance and condition of
the Company. These measures, which the Company believes are widely
used by investors, securities analysts and other interested parties
in evaluating the Company’s performance, do not have a standardized
meaning prescribed by IFRS and therefore may not be comparable to
similarly titled measures presented by other publicly traded
companies, nor should they be construed as an alternative to
financial measures determined in accordance with IFRS. Non-IFRS
measures, included anywhere in this press release, include
“Adjusted Net Income (Loss)”, “Adjusted Net Earnings (Loss) per
Share (on a basic and diluted basis)”, “Adjusted Operating Income
(Loss)”, "Adjusted EBITDA”, “Free Cash Flow” and “Net Debt”. The
relevant IFRS financial measure, as applicable, and a
reconciliation of certain non-IFRS financial measures to measures
determined in accordance with IFRS are contained in the Company’s
Management Discussion and Analysis for the year ended December 31,
2021 and in this press release.
OVERVIEW
Pat D’Eramo, President and Chief Executive
Officer, stated: “We continued to face challenges during the fourth
quarter from lower volumes due to the global semiconductor shortage
and other supply chain issues that have significantly disrupted
production, as well as a negative sales mix, cost inflation,
operational inefficiencies impacted by customer production
fluctuation, and higher than normal costs related to substantial
new business launch activity. On a positive note, results improved
sequentially over the third quarter, and we are off to a measurably
better start in 2022, as we are seeing higher volumes and greater
production stability with fewer customer production call-offs in
the first quarter. While we are not out of the woods yet, and
uncertainty remains, we expect our results will continue to improve
throughout the year, as supply issues are resolved, and our cadence
of launch activity normalizes. In addition, commercial negotiations
aimed at recovering a portion of the inflationary costs that have
weighed on our margins in recent quarters continue with our
customers. We have had a number of positive outcomes on this front
and expect that we will have more success moving forward.”
He added: “I am also pleased to announce new
business wins since we reported our last quarter totaling $100
million in annualized sales at mature volumes, including
approximately $50 million in our Lightweight Structures Group with
General Motors, $35 million of various Propulsion Systems work with
General Motors, Ford, Daimler, and Tesla, and $15 million in our
Flexible Manufacturing Group with Lucid, General Motors, John
Deere, and Thermo-King. 70% of these new business wins are on pure
electric vehicle platforms, as our product portfolio continues to
evolve in lockstep with the overall electrification trend. New
business awards since the beginning of 2021 now total approximately
$300 million in annualized sales at mature volumes.”
Fred Di Tosto, Chief Financial Officer, stated:
“Sales for the fourth quarter, excluding tooling sales of $203.6
million, were $849.9 million. Our Adjusted Operating Loss(1) was
$2.9 million, and Adjusted Net Loss per Share(1) was $0.12. While
results continued to be impacted by volume, mix and cost headwinds
on a year-over-year basis, they were sequentially higher, and
broadly in line with our expectations. We also generated $21
million of positive Free Cash Flow(1), during the quarter, largely
driven by a reduction in tooling-related working capital. While we
would not extrapolate this amount going forward as tooling-related
working capital flows can be lumpy and unpredictable, we do expect
to generate positive Free Cash Flow(1) on a full-year basis in
2022.”
He added: “Net debt(1) was essentially flat
quarter-over-quarter, ending the year at $858 million. Our net debt
to adjusted EBITDA(1) ratio was 3.11x, an increase from
approximately 2.5x last quarter. During the quarter, and in light
of the semiconductor shortage and other challenges, we proactively
amended our lending agreements with our banking syndicate to
provide increased financial covenant flexibility. The Company’s
calculation of its net debt to adjusted EBITDA(1) ratio for
covenant purposes now excludes adjusted EBITDA(1) from the third
and fourth quarters of 2021 and is based on the annualized total of
the remaining quarters in the relevant trailing twelve-month
period. In addition, the maximum net debt to adjusted EBITDA(1)
covenant has been increased to 4.0x, 4.5x, and 3.75x for the first,
second, and third quarters of 2022, respectively, returning to 3.0x
thereafter. Our net debt to adjusted EBITDA(1) ratio for bank
covenant purposes was 2.21x at the end of the quarter. We have
strong relationships with our lenders, and we thank them for their
continued support.”
Rob Wildeboer, Executive Chairman, stated: “We
continue to have a high degree of confidence in our ability to
achieve the targets set out in our 2023 outlook, which calls for
total sales (including tooling sales) of $4.6 to $4.8 billion, an
adjusted operating income margin(1) exceeding 8%, and more than
$200 million in Free Cash Flow(1). Demand for vehicles remains
robust, and inventories continue to trend near all-time lows. We
believe this sets the stage for a multi-year period of strong
industry volume growth once supply chain conditions improve. We
also expect our sales growth to outpace industry production growth
given the substantial amount of new business that we have won in
recent years that we continue to launch on. This, along with a
recovery of material labour and energy costs, operational
improvements, a reduction in the pace of new business launch
activity, and a normalization of capital spending should enable us
to achieve these targets.”
He added: “We also published our 2021
Sustainability Report today, which outlines the progress we have
made on various Environmental, Social, and Governance issues
throughout the year. One particularly noteworthy highlight is that
we continued to deliver industry-leading safety performance in
2021, with a Total Recordable Injury Frequency (TRIF) of 1.37x,
representing a 46% improvement over last year, and a 91%
improvement since 2014. This is a significant achievement, and we
are proud of the collective efforts of all our people in making
this happen. We believe this demonstrates the commitment that our
organization and its people have to our unique culture, based on
our Golden Rule philosophy of treating people the way we want to be
treated – with dignity and respect.”
RESULTS OF OPERATIONS
All amounts in this press release are in
Canadian dollars, unless otherwise stated; and all tabular amounts
are in thousands of Canadian dollars, except earnings per share and
number of shares.
Additional information about the Company,
including the Company’s Management Discussion and Analysis of
Operating Results and Financial Position for the year ended
December 31, 2021 (“MD&A”), the Company’s audited consolidated
financial statements for the year ended December 31, 2021 (the
“audited consolidated financial statements”) and the Company’s
Annual Information Form for the year ended December 31, 2021 can be
found at www.sedar.com.
OVERALL RESULTS
Results of operations may include certain items
which have been separately disclosed, where appropriate, in order
to provide a clear assessment of the underlying Company results. In
addition to International Financial Reporting Standards ("IFRS")
measures, management uses non-IFRS measures in the Company’s
disclosures that it believes provide the most appropriate basis on
which to evaluate the Company’s results.
The following tables set out certain highlights
of the Company’s performance for the three months and years ended
December 31, 2021 and 2020. Refer to the Company’s consolidated
financial statements for the year ended December 31, 2021 for a
detailed account of the Company’s performance for the periods
presented in the tables below.
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
Sales |
$ |
3,783,953 |
|
|
$ |
3,375,286 |
|
|
408,667 |
|
|
12.1 |
% |
Gross Margin |
|
345,624 |
|
|
|
415,097 |
|
|
(69,473 |
) |
|
(16.7 |
%) |
Operating Income |
|
62,917 |
|
|
|
27,538 |
|
|
35,379 |
|
|
128.5 |
% |
Net
Income (Loss) for the year |
|
35,880 |
|
|
|
(27,317 |
) |
|
63,197 |
|
|
231.3 |
% |
Net Earnings (Loss) per Share - Basic and Diluted |
$ |
0.45 |
|
|
$ |
(0.34 |
) |
|
0.79 |
|
|
232.4 |
% |
Non-IFRS Measures* |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income |
$ |
68,390 |
|
|
$ |
123,980 |
|
|
(55,590 |
) |
|
(44.8 |
%) |
% of Sales |
|
1.8 |
% |
|
|
3.7 |
% |
|
|
|
|
Adjusted EBITDA |
|
317,570 |
|
|
|
365,503 |
|
|
(47,933 |
) |
|
(13.1 |
%) |
% of Sales |
|
8.4 |
% |
|
|
10.8 |
% |
|
|
|
|
Adjusted Net Income |
|
32,884 |
|
|
|
46,856 |
|
|
(13,972 |
) |
|
(29.8 |
%) |
Adjusted Net Earnings per Share - Basic and Diluted |
$ |
0.41 |
|
|
$ |
0.58 |
|
|
(0.17 |
) |
|
(29.3 |
%) |
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
Sales |
$ |
1,053,440 |
|
|
$ |
1,070,956 |
|
|
(17,516 |
) |
|
(1.6 |
%) |
Cost of sales (excluding
depreciation) |
|
(932,049 |
) |
|
|
(858,124 |
) |
|
(73,925 |
) |
|
(8.6 |
%) |
Depreciation of property, plant and equipment and right-of-use
assets (production) |
|
(58,359 |
) |
|
|
(56,991 |
) |
|
(1,368 |
) |
|
(2.4 |
%) |
Gross Margin |
|
63,032 |
|
|
|
155,841 |
|
|
(92,809 |
) |
|
(59.6 |
%) |
Research and development costs |
|
(8,250 |
) |
|
|
(7,340 |
) |
|
(910 |
) |
|
(12.4 |
%) |
Selling, general and
administrative |
|
(53,113 |
) |
|
|
(76,885 |
) |
|
23,772 |
|
|
30.9 |
% |
Depreciation of property,
plant and equipment and right-of-use assets (non-production) |
|
(3,775 |
) |
|
|
(4,303 |
) |
|
528 |
|
|
12.3 |
% |
Loss on disposal of property,
plant and equipment |
|
(794 |
) |
|
|
(306 |
) |
|
(488 |
) |
|
(159.5 |
%) |
Amortization of customer contracts and relationships |
|
— |
|
|
|
(871 |
) |
|
871 |
|
|
100.0 |
% |
Operating Income (Loss) |
$ |
(2,900 |
) |
|
$ |
66,136 |
|
|
(69,036 |
) |
|
(104.4 |
%) |
Share of loss of equity
investments |
|
(1,144 |
) |
|
|
(429 |
) |
|
(715 |
) |
|
(166.7 |
%) |
Gain on dilution of equity
investments |
|
— |
|
|
|
866 |
|
|
(866 |
) |
|
(100.0 |
%) |
Finance expense |
|
(8,714 |
) |
|
|
(8,885 |
) |
|
171 |
|
|
1.9 |
% |
Other
finance income (expense) |
|
(305 |
) |
|
|
(625 |
) |
|
320 |
|
|
51.2 |
% |
Income (Loss) before taxes |
$ |
(13,063 |
) |
|
$ |
57,063 |
|
|
(70,126 |
) |
|
(122.9 |
%) |
Income
tax recovery (expense) |
|
3,410 |
|
|
|
(12,093 |
) |
|
15,503 |
|
|
128.2 |
% |
Net Income (Loss) for the period |
|
(9,653 |
) |
|
|
44,970 |
|
|
(54,623 |
) |
|
(121.5 |
%) |
Net Earnings (Loss) per Share - Basic and Diluted |
$ |
(0.12 |
) |
|
$ |
0.56 |
|
|
(0.68 |
) |
|
(121.4 |
%) |
Non-IFRS Measures* |
|
|
|
|
|
|
|
Adjusted Operating Income
(Loss) |
$ |
(2,900 |
) |
|
$ |
66,136 |
|
|
(69,036 |
) |
|
(104.4 |
%) |
% of Sales |
|
(0.3 |
)% |
|
|
6.2 |
% |
|
|
|
|
Adjusted EBITDA |
|
63,239 |
|
|
|
131,724 |
|
|
(68,485 |
) |
|
(52.0 |
%) |
% of Sales |
|
6.0 |
% |
|
|
12.3 |
% |
|
|
|
|
Adjusted Net Income (Loss) |
|
(9,653 |
) |
|
|
44,212 |
|
|
(53,865 |
) |
|
(121.8 |
%) |
Adjusted Net Earnings (Loss) per Share - Basic and Diluted |
$ |
(0.12 |
) |
|
$ |
0.55 |
|
|
(0.67 |
) |
|
(121.8 |
%) |
*Non-IFRS Measures
The Company prepares its consolidated financial
statements in accordance with IFRS. However, the Company considers
certain non-IFRS financial measures as useful additional
information in measuring the financial performance and condition of
the Company. These measures, which the Company believes are widely
used by investors, securities analysts and other interested parties
in evaluating the Company’s performance, do not have a standardized
meaning prescribed by IFRS and therefore may not be comparable to
similarly titled measures presented by other publicly traded
companies, nor should they be construed as an alternative to
financial measures determined in accordance with IFRS. Non-IFRS
measures include “Adjusted Net Income (Loss)”, “Adjusted Net
Earnings (Loss) per Share (on a basic and diluted basis)”,
“Adjusted Operating Income (Loss)”, "Adjusted EBITDA”, “Free Cash
Flow”, and “Net Debt”.
The following tables provide a reconciliation of
IFRS “Net Income (Loss)” to non-IFRS “Adjusted Net Income (Loss)”,
“Adjusted Operating Income (Loss)” and “Adjusted EBITDA”.
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
Net Income (Loss) |
$ |
(9,653 |
) |
|
$ |
44,970 |
|
Adjustments, after tax* |
|
— |
|
|
|
(758 |
) |
Adjusted Net Income (Loss) |
$ |
(9,653 |
) |
|
$ |
44,212 |
|
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
Net Income (Loss) |
$ |
35,880 |
|
|
$ |
(27,317 |
) |
Adjustments, after tax* |
|
(2,996 |
) |
|
|
74,173 |
|
Adjusted Net Income |
$ |
32,884 |
|
|
$ |
46,856 |
|
*Adjustments are explained in the "Adjustments
to Net Income (Loss)" section of this Press Release
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
Net Income (Loss) |
$ |
(9,653 |
) |
|
$ |
44,970 |
|
Income tax expense
(recovery) |
|
(3,410 |
) |
|
|
12,093 |
|
Other finance expense |
|
305 |
|
|
|
625 |
|
Share of loss of equity
investments |
|
1,144 |
|
|
|
429 |
|
Finance expense |
|
8,714 |
|
|
|
8,885 |
|
Adjustments, before tax* |
|
— |
|
|
|
(866 |
) |
Adjusted Operating Income (Loss) |
$ |
(2,900 |
) |
|
$ |
66,136 |
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
62,134 |
|
|
|
61,294 |
|
Amortization of intangible
assets |
|
3,211 |
|
|
|
3,988 |
|
Loss on
disposal of property, plant and equipment |
|
794 |
|
|
|
306 |
|
Adjusted EBITDA |
$ |
63,239 |
|
|
$ |
131,724 |
|
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
Net Income (Loss) |
$ |
35,880 |
|
|
$ |
(27,317 |
) |
Income tax expense |
|
11,381 |
|
|
|
12,007 |
|
Other finance expense
(income) |
|
(13,386 |
) |
|
|
5,633 |
|
Share of loss of equity
investments |
|
3,924 |
|
|
|
2,310 |
|
Finance expense |
|
32,918 |
|
|
|
35,771 |
|
Adjustments, before tax* |
|
(2,327 |
) |
|
|
95,576 |
|
Adjusted Operating Income |
$ |
68,390 |
|
|
$ |
123,980 |
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
235,434 |
|
|
|
227,338 |
|
Amortization of intangible
assets |
|
12,788 |
|
|
|
13,642 |
|
Loss on
disposal of property, plant and equipment |
|
958 |
|
|
|
543 |
|
Adjusted EBITDA |
$ |
317,570 |
|
|
$ |
365,503 |
|
*Adjustments are explained in the "Adjustments
to Net Income (Loss)" section of this Press Release
SALES
Three months ended December 31, 2021 to three months
ended December 31, 2020 comparison
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
North America |
$ |
772,196 |
|
|
$ |
792,069 |
|
|
(19,873 |
) |
|
(2.5 |
%) |
Europe |
|
239,141 |
|
|
|
234,625 |
|
|
4,516 |
|
|
1.9 |
% |
Rest of the World |
|
47,149 |
|
|
|
48,113 |
|
|
(964 |
) |
|
(2.0 |
%) |
Eliminations |
|
(5,046 |
) |
|
|
(3,851 |
) |
|
(1,195 |
) |
|
(31.0 |
%) |
Total Sales |
$ |
1,053,440 |
|
|
$ |
1,070,956 |
|
|
(17,516 |
) |
|
(1.6 |
%) |
The Company’s consolidated sales for the fourth
quarter of 2021 decreased by $17.5 million or 1.6% to $1,053.4
million as compared to $1,071.0 million for the fourth quarter of
2020. The total decrease in sales was driven by year-over-year
decreases in the North America and Rest of the World operating
segments, partially offset by a year-over-year increase in
Europe.
Sales for the fourth quarter of 2021 in the
Company’s North America operating segment decreased by $19.9
million or 2.5% to $772.2 million from $792.1 million for the
fourth quarter of 2020. The decrease was due to overall lower
industry volumes, primarily as a result of the impact the
industry-wide shortage of semiconductor chips resulting from the
COVID-19 pandemic had on OEM production of certain light vehicle
platforms; and the impact of foreign exchange on the translation of
U.S. denominated production sales, which had a negative impact on
overall sales for the fourth quarter of 2021 of $24.8 million as
compared to the fourth quarter of 2020. These negative factors were
partially offset by the launch of new programs during or subsequent
to the fourth quarter of 2020, including the new Jeep Grand
Cherokee and Wagoneer, Ford Mach E Mustang, and a six-cylinder
aluminum engine block for Ford; and an increase in tooling sales of
$89.0 million, which are typically dependent on the timing of
tooling construction and final acceptance by the customer. Overall
fourth quarter OEM light vehicle production volumes in North
America decreased by approximately 17% year-over-year, with the
industry-wide shortage of semiconductor chips negatively impacting
current year volumes.
Sales for the fourth quarter of 2021 in the
Company’s Europe operating segment increased by $4.5 million or
1.9% to $239.1 million from $234.6 million for the fourth quarter
of 2020. The increase can be attributed to a $20.4 million increase
in tooling sales and the launch of new programs during or
subsequent to the fourth quarter of 2020, mainly with Daimler,
Ford, Volvo, and Lucid Motors. These positive factors were
partially offset by the impact of foreign exchange on the
translation of Euro denominated production sales, which had a
negative impact on overall sales for the fourth quarter of 2021 of
$13.4 million as compared to the fourth quarter of 2020; and
overall lower OEM light vehicle production volumes, which decreased
in Europe by approximately 27% year-over-year, primarily as a
result of the industry-wide shortage of semiconductor chips.
Sales for the fourth quarter of 2021 in the
Company’s Rest of the World operating segment decreased by $1.0
million or 2.0% to $47.1 million from $48.1 million in the fourth
quarter of 2020. The decrease was largely driven by lower
year-over-year production volumes, including a program that came
with from the operations acquired from Metalsa that ended
production during or subsequent to the fourth quarter of 2020; and
a $0.3 million negative foreign exchange impact from the
translation of foreign denominated production sales as compared to
the fourth quarter of 2020. These negative factors were partially
offset by the launch of new programs during or subsequent to the
fourth quarter of 2020, namely with Geely; and a $5.6 million
increase in tooling sales.
Overall tooling sales increased by $115.0
million to $203.6 million for the fourth quarter of 2021 from $88.6
million for the fourth quarter of 2020.
Year ended December 31, 2021 to year
ended December 31, 2020 comparison
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
North America |
$ |
2,737,488 |
|
|
$ |
2,537,220 |
|
|
200,268 |
|
|
7.9 |
% |
Europe |
|
899,972 |
|
|
|
683,876 |
|
|
216,096 |
|
|
31.6 |
% |
Rest of the World |
|
172,915 |
|
|
|
168,778 |
|
|
4,137 |
|
|
2.5 |
% |
Eliminations |
|
(26,422 |
) |
|
|
(14,588 |
) |
|
(11,834 |
) |
|
(81.1 |
%) |
Total Sales |
$ |
3,783,953 |
|
|
$ |
3,375,286 |
|
|
408,667 |
|
|
12.1 |
% |
The Company’s consolidated sales for the year
ended December 31, 2021 increased by $408.7 million or 12.1% to
$3,784.0 million as compared to $3,375.3 million for the year ended
December 31, 2020. Sales for the year ended December 31, 2021
increased year-over-year across all operating segments.
Sales for the year ended December 31, 2021 in
the Company’s North America operating segment increased by $200.3
million or 7.9% to $2,737.5 million from $2,537.2 million for the
year ended December 31, 2020. The operations acquired from Metalsa,
results for which were consolidated with those of the Company
effective March 2, 2020, accounted for $27.2 million of the
year-over-year increase in sales (including a $4.8 million increase
in tooling sales). Excluding the acquired operations, sales for the
year ended December 31, 2021 in North America increased
year-over-year by $173.1 million or 7.0%. The increase was due
generally to the launch of new programs during or subsequent to the
year ended December 31, 2020, including the new Jeep Grand Cherokee
and Wagoneer, Ford Mach E Mustang, Nissan Rogue and Pathfinder, and
a six-cylinder aluminum engine block for Ford; and an increase in
tooling sales of $133.1 million, which are typically dependent on
the timing of tooling construction and final acceptance by the
customer. These positive factors were partially offset by the
impact of foreign exchange on the translation of U.S.-denominated
production sales, which had a negative impact on overall sales for
the year ended December 31, 2021 of approximately $153.7 million as
compared to the corresponding period of 2020; and lower OEM
production volumes on specific light vehicle platforms as a result
of the industry-wide shortage of semiconductor chips, including the
GM Equinox / Terrain and Ford's Edge and Escape.
Sales for the year ended December 31, 2021 in
the Company’s Europe operating segment increased by $216.1 million
or 31.6% to $900.0 million from $683.9 million for the year ended
December 31, 2020. The operations acquired from Metalsa, results
for which were consolidated with those of the Company effective
March 2, 2020, accounted for $87.2 million of the year-over-year
increase in sales (including a $27.5 million increase in tooling
sales). Excluding the acquired operations, sales for the year ended
December 31, 2021 in Europe increased year-over-year by $128.9
million or 24.3%. The increase can be attributed to the launch of
new programs during or subsequent to the year ended December 31,
2020, mainly with Daimler, Ford, Volvo, and Lucid Motors, and
higher OEM production volumes on specific light vehicle and
powertrain platforms, largely with Daimler. These positive factors
were partially offset by the impact of foreign exchange on the
translation of Euro denominated production sales, which had a
negative impact on overall sales for the year ended December 31,
2021 of $14.2 million as compared to the corresponding period of
2020; and a $9.7 million decrease in tooling sales.
Sales for the year ended December 31, 2021 in
the Company’s Rest of the World operating segment increased by $4.1
million or 2.5% to $172.9 million from $168.8 million for the year
ended December 31, 2020. Sales from the operations acquired from
Metalsa, results for which were consolidated with those of the
Company effective March 2, 2020, decreased by $6.5 million
year-over-year due to a program that ended production during 2021.
Excluding the acquired operations, sales for the year ended
December 31, 2021 in the Rest of the World increased year-over-year
by $10.6 million or 10.8%. The increase was largely driven by
higher year-over-year OEM production volumes, mainly in Brazil; and
the launch of new programs during or subsequent to the year ended
December 31, 2020, namely with Geely. These positive factors were
partially offset by a $4.9 million negative foreign exchange impact
from the translation of foreign-denominated production sales as
compared to the corresponding period of 2020 and a $0.2 million
decrease in tooling sales.
Overall tooling sales, inclusive of the
operations acquired from Metalsa, increased by $155.5 million to
$373.9 million for the year ended December 31, 2021 from $218.4
million for the year ended December 31, 2020.
GROSS MARGIN
Three months ended December 31, 2021 to
three months ended December 31, 2020 comparison
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
Gross margin |
$ |
63,032 |
|
|
$ |
155,841 |
|
|
(92,809 |
) |
|
(59.6 |
)% |
% of
Sales |
|
6.0 |
% |
|
|
14.6 |
% |
|
|
|
|
|
|
The gross margin percentage for the fourth
quarter of 2021 of 6.0% decreased as a percentage of sales by 8.6%
as compared to the gross margin percentage for the fourth quarter
of 2020 of 14.6%. The decrease in gross margin as a percentage of
sales was generally due to:
- overall lower
production sales volume and corresponding lower utilization of
assets, driven primarily by the industry-wide shortage of
semiconductor chips;
- a negative sales mix;
- production inefficiencies related
to the semiconductor chip shortage driven by production lines being
stopped/restarted unexpectedly based on OEMs’ production
priorities;
- generally higher labour, material
and energy costs;
- other operational inefficiencies at
certain operating facilities, including launch related costs and
upfront costs incurred in preparation of upcoming new
programs;
- an increase in tooling sales, which
typically earn low margins for the Company; and
- a decrease in COVID-related
government subsidies.
These factors were partially offset by
productivity and efficiency improvements at certain operating
facilities.
Year ended December 31, 2021 to year
ended December 31, 2020 comparison
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
Gross margin |
$ |
345,624 |
|
|
$ |
415,097 |
|
|
(69,473 |
) |
|
(16.7 |
%) |
% of
Sales |
|
9.1 |
% |
|
|
12.3 |
% |
|
|
|
|
The gross margin percentage for the year ended
December 31, 2021 of 9.1% decreased as a percentage of sales by
3.2% as compared to the gross margin percentage for the year ended
December 31, 2020 of 12.3%. The decrease in gross margin as a
percentage of sales was generally due to:
- a negative sales
mix;
- production inefficiencies related
to the semiconductor chip shortage driven by production lines being
stopped/restarted unexpectedly based on OEMs’ production
priorities;
- generally higher labour, material
and energy costs;
- other operational inefficiencies at
certain operating facilities, including launch related costs and
upfront costs incurred in preparation of upcoming new
programs;
- an increase in the cost of aluminum
raw material in conjunction with a temporary lag in the offsetting
contractual increase in selling prices to the Company’s customers,
largely in the first quarter of 2021;
- an increase in tooling sales, which
typically earn low margins for the Company; and
- a decrease in COVID-related
government subsidies.
These factors were partially offset by
contribution from higher sales volume, as previously explained, and
productivity and efficiency improvements at certain operating
facilities.
ADJUSTMENTS TO NET INCOME
(LOSS)
Adjusted Net Income (Loss) excludes certain
items as set out in the following tables and described in the notes
thereto. Management uses Adjusted Net Income (Loss) as a
measurement of operating performance of the Company and believes
that, in conjunction with IFRS measures, it provides useful
information about the financial performance and condition of the
Company.
TABLE A
Three months ended December 31, 2021 to
three months ended December 31, 2020 comparison
|
Three months endedDecember 31, 2021 |
|
|
Three months endedDecember 31, 2020 |
|
|
$ Change |
|
NET INCOME (LOSS) |
$ |
(9,653 |
) |
|
$ |
44,970 |
|
|
$ |
(54,623 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Gain on
dilution of equity investments (2) |
|
— |
|
|
|
(866 |
) |
|
|
866 |
|
ADJUSTMENTS, BEFORE TAX |
$ |
— |
|
|
$ |
(866 |
) |
|
$ |
866 |
|
|
|
|
|
|
|
Tax
impact of above items |
|
— |
|
|
|
108 |
|
|
|
(108 |
) |
ADJUSTMENTS, AFTER TAX |
$ |
— |
|
|
$ |
(758 |
) |
|
$ |
758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME (LOSS) |
$ |
(9,653 |
) |
|
$ |
44,212 |
|
|
$ |
(53,865 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares Outstanding –
Basic (‘000) |
|
80,367 |
|
|
|
80,294 |
|
|
|
|
|
Adjusted Basic Net Earnings
(Loss) Per Share |
$ |
(0.12 |
) |
|
$ |
0.55 |
|
|
|
|
|
Number of Shares Outstanding –
Diluted (‘000) |
|
80,367 |
|
|
|
80,382 |
|
|
|
|
|
Adjusted Diluted Net Earnings (Loss) Per Share |
$ |
(0.12 |
) |
|
$ |
0.55 |
|
|
|
|
|
TABLE B
Year ended December 31, 2021 to year
ended December 31, 2020 comparison
|
Year endedDecember 31, 2021 |
|
|
Year endedDecember 31, 2020 |
|
|
$ Change |
|
NET INCOME (LOSS) |
$ |
35,880 |
|
|
$ |
(27,317 |
) |
|
$ |
63,197 |
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Restructuring costs (1) |
|
5,473 |
|
|
|
8,170 |
|
|
|
(2,697 |
) |
Gain on dilution of equity
investments (2) |
|
(7,800 |
) |
|
|
(866 |
) |
|
|
(6,934 |
) |
Impairment of assets (3) |
|
— |
|
|
|
85,783 |
|
|
|
(85,783 |
) |
Transaction costs associated with the operations acquired from
Metalsa (recorded as SG&A) (4) |
|
— |
|
|
|
2,489 |
|
|
|
(2,489 |
) |
ADJUSTMENTS, BEFORE TAX |
$ |
(2,327 |
) |
|
$ |
95,576 |
|
|
$ |
(97,903 |
) |
|
|
|
|
|
|
Tax
impact of above items |
|
(669 |
) |
|
|
(21,403 |
) |
|
|
20,734 |
|
ADJUSTMENTS, AFTER TAX |
$ |
(2,996 |
) |
|
$ |
74,173 |
|
|
$ |
(77,169 |
) |
|
|
|
|
|
|
ADJUSTED NET INCOME |
$ |
32,884 |
|
|
$ |
46,856 |
|
|
$ |
(13,972 |
) |
|
|
|
|
|
|
Number of Shares Outstanding –
Basic (‘000) |
|
80,337 |
|
|
|
80,142 |
|
|
|
Adjusted Basic Net Earnings
(Loss) Per Share |
$ |
0.41 |
|
|
$ |
0.58 |
|
|
|
Number of Shares Outstanding –
Diluted (‘000) |
|
80,408 |
|
|
|
80,142 |
|
|
|
Adjusted Diluted Net Earnings (Loss) Per Share |
$ |
0.41 |
|
|
$ |
0.58 |
|
|
|
(1) |
Restructuring costs |
|
|
|
Additions to the restructuring provision for the year ended
December 31, 2021, recognized during the first and second quarters
of 2021, totaled $5.5 million and represent employee-related
severance resulting from the rightsizing of an operating facility
in Germany. |
|
|
|
Additions to the restructuring provision for the year ended
December 31, 2020, recognized during the second quarter of 2020,
totaled $8.2 million and represent employee-related severance
resulting from a reduction in the Company’s workforce globally in
response to the COVID-19 global pandemic. Of the total addition to
the restructuring provision, $6.6 million relates to North America,
$1.0 million to Europe and $0.6 million to the Rest of the
World. |
|
|
(2) |
Gain on dilution of equity investments |
|
|
|
As at December 31, 2020, the Company held 34,045,954 common shares
of NanoXplore Inc. (“NanoXplore”) representing a 23.3% equity
interest in NanoXplore (on a non-diluted basis). On February 12,
2021, NanoXplore completed a public offering of 11,500,000 common
shares for gross proceeds of $46.0 million. In a separate
transaction on February 12, 2021, the Company purchased 1,000,000
common shares from NanoXplore’s President and Chief Executive
Officer for consideration of $4.0 million. Subsequent to these
transactions, the Company’s net ownership interest decreased to
22.2% from 23.3%. This dilution resulted in a deemed disposition of
a portion of the Company’s ownership interest in NanoXplore,
resulting in a gain on dilution of $7.8 million in the first
quarter of 2021. |
|
|
|
During the fourth quarter of 2020, NanoXplore converted an
aggregate principal amount of $10.0 million of convertible
unsecured subordinated debentures into common shares. Consequently,
the Company's net ownership interest decreased to 23.3% from 24.3%.
This dilution resulted in a deemed disposition of a portion of the
Company's ownership interest in NanoXplore, resulting in a gain on
dilution of $0.9 million in the fourth quarter of 2020. |
|
|
(3) |
Impairment of assets |
|
|
|
The significant reduction in volumes and industry production
projections as a result of the COVID-19 global pandemic negatively
impacted the recoverable amount of certain of the Company’s
production-related assets and also changed the expected usage of
certain other assets. As a result, during the second quarter of
2020, the Company completed an analysis of its asset base and
concluded there existed certain indicators of impairment for
specific assets and cash-generating units ("CGU"). Accordingly, the
Company tested these assets and CGUs for recoverability using
projected sales and cash flows modelled from industry production
projections. Based on the results of this testing, during the
second quarter of 2020, the Company recorded impairment charges on
property, plant and equipment, right-of-use assets, intangible
assets and inventories across its three operating segments totaling
$85.8 million, including specific assets that are no longer
expected to be redeployed or transferred to other facilities. The
charges related to assets and CGUs across various jurisdictions in
the Company’s segments, including the United States, Slovakia,
China and Brazil. Of the total impairment charge, $72.2 million was
recognized in North America, $1.3 million in Europe, and $12.3
million in the Rest of the World. For the specific assets that are
no longer expected to be redeployed or transferred, the impairment
charges are based on the estimated salvage value of the assets. For
the CGUs, the impairment charges were recorded where the carrying
amount of the CGUs exceeded their estimated recoverable
amounts. |
|
|
(4) |
Transaction costs associated with the operations acquired
from Metalsa (recorded as SG&A) |
|
|
|
On March 2, 2020, the Company completed the acquisition of the
structural components for passenger car operations of Metalsa S.A,
de C.V. Included in SG&A expense are transaction costs related
to the acquisition totaling $2.5 million in the first quarter of
2020. |
|
|
NET INCOME (LOSS)
Three months ended December 31, 2021 to three months
ended December 31, 2020 comparison
|
Three months endedDecember 31,
2021 |
|
|
Three months endedDecember 31,
2020 |
|
$ Change |
|
|
% Change |
|
Net Income (Loss) |
$ |
(9,653 |
) |
|
$ |
44,970 |
|
(54,623 |
) |
|
(121.5 |
%) |
Adjusted Net Income
(Loss) |
$ |
(9,653 |
) |
|
$ |
44,212 |
|
(53,865 |
) |
|
(121.8 |
%) |
Net Earnings (Loss) per
Share |
|
|
|
|
|
|
|
|
|
Basic and Diluted |
$ |
(0.12 |
) |
|
$ |
0.56 |
|
|
|
|
|
|
Adjusted Net Earnings (Loss)
per Share |
|
|
|
|
|
|
|
|
|
Basic and Diluted |
$ |
(0.12 |
) |
|
$ |
0.55 |
|
|
|
|
|
|
Net Income (Loss), before adjustments, for the
fourth quarter of 2021 decreased by $54.6 million to a Net Loss of
$9.7 million or ($0.12) per share, on a basic and diluted basis,
from a Net Income of $45.0 million or $0.56 per share, on a basic
and diluted basis, for the fourth quarter of 2020. Excluding the
adjustments explained in Table A under “Adjustments to Net Income
(Loss)”, Adjusted Net Income (Loss) for the fourth quarter of 2021
decreased by $53.9 million to an Adjusted Net Loss of $9.7 million
or ($0.12) per share, on a basic and diluted basis, from Adjusted
Net Income of $44.2 million or $0.55 per share, on a basic and
diluted basis, for the fourth quarter of 2020.
The Net Loss and Adjusted Net Loss for the
fourth quarter of 2021, as compared to Net Income and Adjusted Net
Income for the fourth quarter of 2020, were negatively impacted by
lower gross margin on lower year-over-year sales volume; partially
offset by a year-over-year decrease in SG&A expense, as
previously explained.
Year ended December 31, 2021 to year
ended December 31, 2020 comparison
|
Year endedDecember 31, 2021 |
|
Year endedDecember 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
Net Income (Loss) |
$ |
35,880 |
|
$ |
(27,317 |
) |
|
63,197 |
|
|
231.3 |
% |
Adjusted Net Income |
|
32,884 |
|
$ |
46,856 |
|
|
(13,972 |
) |
|
(29.8 |
%) |
Net Earnings (Loss) per
Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
0.45 |
|
$ |
(0.34 |
) |
|
|
|
|
Adjusted Net Earnings per
Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
0.41 |
|
$ |
0.58 |
|
|
|
|
|
Net Income (Loss), before adjustments, for the
year ended December 31, 2021 increased by $63.2 million to Net
Income of $35.9 million from a Net Loss of $27.3 million for the
year ended December 31, 2020 due largely to certain items incurred
during the years ended December 31, 2021 and 2020 as explained in
Table B under “Adjustments to Net Income (Loss)”. Excluding these
adjustments, Adjusted Net Income for the year ended December 31,
2021 decreased to $32.9 million or $0.41 per share, on a basic and
diluted basis, from $46.9 million or $0.58 per share, on a basic
and diluted basis, for the year ended December 31, 2020.
Adjusted Net Income for the year ended December
31, 2021, as compared to the year ended December 31, 2020, was
negatively impacted by the following:
- lower gross margin
on higher year-over-year sales volume, as previously
explained;
- a year-over-year increase in
research and development costs; and
- an increase in the Company's share
of loss of equity investments.
These factors were partially offset by the
following:
- a net unrealized
foreign exchange gain of $12.6 million for the year ended December
31, 2021 compared to a loss of $6.1 million for the year ended
December 31, 2020;
- a year-over-year decrease in
SG&A expense, as previously discussed;
- a year-over-year decrease in
finance expense; and
- a lower effective tax rate on
adjusted income (26.8% for the year ended December 31, 2021
compared to 41.6% for the year ended December 31, 2020).
DIVIDEND
A cash dividend of $0.05 per share has been
declared by the Board of Directors payable to shareholders of
record on March 31, 2022, on or about April 15, 2022.
ABOUT MARTINREA
Martinrea is a diversified and global automotive
supplier engaged in the design, development and manufacturing of
highly engineered, value-added Lightweight Structures and
Propulsion Systems. Martinrea operates in 57 locations in Canada,
the United States, Mexico, Brazil, Germany, Slovakia, Spain, China,
South Africa and Japan. Martinrea’s vision is making lives better
by being the best supplier we can be in the products we make and
the services we provide.
For more information on Martinrea, please visit
www.martinrea.com. Follow Martinrea on Twitter and Facebook.
CONFERENCE CALL DETAILS
A conference call to discuss the financial
results will be held on Thursday, March 3, 2022 at 5:30 p.m.
Eastern Time. To participate, please dial 416-340-2217 (Toronto
area) or 800-806-5484 (toll free Canada and US) and enter
participant code 2424027#. Please call 10 minutes prior to the
start of the conference call.
The conference call will also be webcast live in
listen‐only mode and archived for twelve months. The webcast and
accompanying presentation can be accessed at:
https://www.martinrea.com/investor-relations/events-presentations/
There will also be a rebroadcast of the call
available by dialing 905-694-9451 or toll free 800-408-3053
(Conference ID – 7624547#). The rebroadcast will be available until
April 3, 2022.
If you have any teleconferencing questions,
please call Ganesh Iyer at 416-749-0314.
FORWARD-LOOKING INFORMATION
Special Note Regarding Forward-Looking
Statements
This Press Release and the documents
incorporated by reference therein contains forward-looking
statements within the meaning of applicable Canadian securities
laws including statements related to the growth or expectations of,
improvements in, expansion of and/or guidance or outlook as to
future results, revenue, sales, margin, gross margin, earnings, and
earnings per share, adjusted earnings per share, free cash flow,
volumes, production stability, successful customer negotiations,
expectations for growth in 2022 and 2023, adjusted net earnings per
share, operating income margins, operating margins, adjusted
operating income margins, outlook for 2022 and 2023, the expected
impact of or duration of the COVID-19 pandemic (including the
related global semi-conductor chip shortage, and supply chain
issues), or as a result of any current or future government actions
or regulations, on the Company’s financial position, its business
and operations, on its employees, on the automotive industry, or on
the business of any OEM or suppliers; the impact of the
semi-conductor chip shortage; the Company’s current and future
strategy, priorities and response related to COVID-19; the growth
of the Company and pursuit of, and belief in, its strategies, new
business, the ramping up and launching of new business, continued
investments in its business and technologies, the opportunity to
increase sales, the strength, recovery and growth of the automotive
industry, the expected benefit of electrification, the belief in
graphene products, and the payment of dividends or potential share
repurchases as well as other forward-looking statements. The words
“continue”, “expect”, “anticipate”, “estimate”, “may”, “will”,
“should”, “views”, “intend”, “believe”, “plan” and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements are based on estimates and assumptions
made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future
developments, as well as other factors that the Company believes
are appropriate in the circumstances, such as expected sales and
industry production estimates, current foreign exchange rates,
timing of product launches and operational improvement during the
period, and current Board approved budgets. Many factors could
cause the Company’s actual results, performance or achievements to
differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, the
following factors, some of which are discussed in detail in the
Company’s Annual Information Form for the year ended December 31,
2021, the Company’s MD&A for the year ended December 31, 2021
and other public filings which can be found at www.sedar.com:
- North American and Global Economic
and Political Conditions and Consumer Confidence;
- The highly cyclical nature of the
automotive industry and the industry’s dependence on consumer
spending and general economic conditions;
- Automotive Industry Risks;
- Pandemics and Epidemics (including
the ongoing COVID-19 Pandemic), Force Majeure Events, Natural
Disasters, Terrorist Activities, Political and Civil Unrest, and
Other Outbreaks;
- Dependence Upon Key Customers;
- Financial Viability of Suppliers
and Key Suppliers and Supply Disruptions;
- Competition;
- Cost and Risk Absorption and
Purchase Orders, including the increasing pressure on the Company
to absorb costs related to product design and development,
engineering, program management, prototypes, validation and
tooling;
- Quote/Pricing Assumptions;
- Increased pricing of raw materials
and commodities;
- Launch and Operational Costs and
Cost Structure;
- Material Prices and
Volatility;
- Fluctuations in Operating
Results;
- Outsourcing and Insourcing
Trends;
- Product Warranty, Recall, Product
Liability and Liability Risk;
- Product Development and
Technological Change;
- A Shift Away from Technologies in
Which the Company is Investing;
- Dependence Upon Key Personnel;
- Limited Financial
Resources/Uncertainty of Future Financing/Banking;
- Cybersecurity Threats;
- Acquisitions;
- Potential Tax Exposures;
- Potential Rationalization Costs,
Turnaround Costs and Impairment Charges;
- Labour Relations Matters;
- Trade Restrictions;
- Changes in Laws and Governmental
Regulations;
- Environmental Regulation and
Climate Change;
- Litigation and Regulatory
Compliance and Investigations;
- Risks of conducting business in
foreign countries, including China, Brazil and other growing
markets;
- Currency Risk – Hedging;
- Currency Risk - Competitiveness in
Certain Jurisdictions;
- Internal Controls Over Financial
Reporting and Disclosure Controls and Procedures;
- Loss of Use of Key Manufacturing
Facilities;
- Intellectual Property;
- Availability of Consumer Credit or
Cost of Borrowing;
- Competition with Low Cost
Countries;
- The Company’s ability to shift its
manufacturing footprint to take advantage of opportunities in
growing markets;
- Change in the Company’s mix of
earnings between jurisdictions with lower tax rates and those with
higher tax rates;
- Pension Plans and other post
employment benefits;
- Potential Volatility of Share
Prices;
- Dividends;
- Private or Public Equity
Investments in Technology Companies;
- Joint Ventures; and
- Lease Obligations.
These factors should be considered carefully,
and readers should not place undue reliance on the Company’s
forward-looking statements. The Company has no intention and
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
The common shares of Martinrea trade on The Toronto Stock
Exchange under the symbol “MRE”.
For further information, please contact:
Fred Di TostoChief Financial OfficerMartinrea International
Inc.3210 Langstaff RoadVaughan, Ontario L4K 5B2Tel:
416-749-0314Fax: 289-982-3001
|
Martinrea
International Inc. |
Consolidated
Balance Sheets |
(in
thousands of Canadian dollars) |
|
|
Note |
December 31, 2021 |
December 31, 2020 |
ASSETS |
|
|
|
Cash and cash equivalents |
|
$ |
153,291 |
$ |
152,786 |
Trade and other
receivables |
4 |
|
634,184 |
|
589,315 |
Inventories |
5 |
|
590,784 |
|
492,659 |
Prepaid expenses and
deposits |
|
|
23,892 |
|
23,550 |
Income
taxes recoverable |
|
|
18,609 |
|
13,527 |
TOTAL CURRENT ASSETS |
|
|
1,420,760 |
|
1,271,837 |
Property, plant and
equipment |
6 |
|
1,727,914 |
|
1,615,197 |
Right-of-use assets |
7 |
|
222,934 |
|
192,630 |
Deferred tax assets |
16 |
|
138,612 |
|
195,538 |
Intangible assets |
8 |
|
47,809 |
|
52,644 |
Investments |
9 |
|
55,215 |
|
40,557 |
TOTAL NON-CURRENT ASSETS |
|
|
2,192,484 |
|
2,096,566 |
TOTAL ASSETS |
|
$ |
3,613,244 |
$ |
3,368,403 |
|
|
|
|
LIABILITIES |
|
|
|
Trade and other payables |
10 |
$ |
1,110,350 |
$ |
967,952 |
Provisions |
11 |
|
6,272 |
|
4,258 |
Income taxes payable |
|
|
11,955 |
|
13,230 |
Current portion of long-term
debt |
13 |
|
20,173 |
|
19,492 |
Current
portion of lease liabilities |
14 |
|
39,322 |
|
34,064 |
TOTAL CURRENT LIABILITIES |
|
|
1,188,072 |
|
1,038,996 |
Long-term debt |
13 |
|
990,817 |
|
815,730 |
Lease liabilities |
14 |
|
200,455 |
|
177,749 |
Pension and other
post-retirement benefits |
15 |
|
49,530 |
|
74,030 |
Deferred tax liabilities |
16 |
|
14,595 |
|
86,174 |
TOTAL NON-CURRENT LIABILITIES |
|
|
1,255,397 |
|
1,153,683 |
TOTAL LIABILITIES |
|
|
2,443,469 |
|
2,192,679 |
|
|
|
|
EQUITY |
|
|
|
Capital stock |
17 |
|
663,415 |
|
662,427 |
Contributed surplus |
|
|
44,845 |
|
43,860 |
Accumulated other
comprehensive income |
|
|
51,207 |
|
96,645 |
Retained earnings |
|
|
410,308 |
|
372,792 |
TOTAL EQUITY |
|
|
1,169,775 |
|
1,175,724 |
TOTAL LIABILITIES AND EQUITY |
|
$ |
3,613,244 |
$ |
3,368,403 |
Commitments and Contingencies (note 25)
Subsequent Events (note 9)
See accompanying notes to the consolidated financial
statements.
On behalf of the Board:
“Robert Wildeboer” |
Director |
|
“Terry
Lyons” |
Director |
|
|
Martinrea
International Inc. |
Consolidated
Statements of Operations |
(in
thousands of Canadian dollars, except per share amounts) |
|
|
|
Year ended |
|
Year ended |
|
|
Note |
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
SALES |
|
$ |
3,783,953 |
|
$ |
3,375,286 |
|
|
|
|
|
Cost of sales (excluding
depreciation of property, plant and equipment and right-of-use
assets) |
|
|
(3,218,203 |
) |
|
(2,748,804 |
) |
Depreciation of property, plant and equipment and right-of-use
assets (production) |
|
|
(220,126 |
) |
|
(211,385 |
) |
Total
cost of sales |
|
|
(3,438,329 |
) |
|
(2,960,189 |
) |
GROSS MARGIN |
|
|
345,624 |
|
|
415,097 |
|
|
|
|
|
Research and development
costs |
19 |
|
(32,622 |
) |
|
(28,911 |
) |
Selling, general and
administrative |
|
|
(228,346 |
) |
|
(246,364 |
) |
Depreciation of property,
plant and equipment and right-of-use assets (non-production) |
|
|
(15,308 |
) |
|
(15,953 |
) |
Loss on disposal of property,
plant and equipment |
|
|
(958 |
) |
|
(543 |
) |
Restructuring costs |
11 |
|
(5,473 |
) |
|
(8,170 |
) |
Amortization of customer
contracts and relationships |
|
|
— |
|
|
(1,835 |
) |
Impairment of assets |
12 |
|
— |
|
|
(85,783 |
) |
OPERATING INCOME |
|
|
62,917 |
|
|
27,538 |
|
|
|
|
|
Share of loss of equity
investments |
9 |
|
(3,924 |
) |
|
(2,310 |
) |
Gain on dilution of equity
investments |
9 |
|
7,800 |
|
|
866 |
|
Finance expense |
21 |
|
(32,918 |
) |
|
(35,771 |
) |
Other
finance income (expense) |
21 |
|
13,386 |
|
|
(5,633 |
) |
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
47,261 |
|
|
(15,310 |
) |
|
|
|
|
Income
tax expense |
16 |
|
(11,381 |
) |
|
(12,007 |
) |
NET INCOME (LOSS) FOR THE PERIOD |
|
$ |
35,880 |
|
$ |
(27,317 |
) |
|
|
|
|
Basic earnings (loss) per
share |
18 |
$ |
0.45 |
|
$ |
(0.34 |
) |
Diluted
earnings (loss) per share |
18 |
$ |
0.45 |
|
$ |
(0.34 |
) |
See accompanying notes to the consolidated financial
statements.
|
Martinrea
International Inc. |
Consolidated
Statements of Comprehensive Income |
(in thousands of Canadian dollars) |
|
|
Year ended |
|
Year ended |
|
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
NET INCOME (LOSS) FOR THE PERIOD |
$ |
35,880 |
|
$ |
(27,317 |
) |
Other comprehensive
income (loss), net of tax: |
|
|
Items that may be reclassified to net income
(loss) |
|
|
Foreign currency translation differences for foreign
operations |
|
(42,520 |
) |
|
3,900 |
|
Cash flow hedging derivative and non-derivative financial
instruments: |
|
|
Unrealized gain in fair value of financial instruments |
|
892 |
|
|
2,715 |
|
Reclassification of loss (gain) to net income (loss) |
|
(4,014 |
) |
|
1,002 |
|
Items that will not be reclassified to net income
(loss) |
|
|
Share of other comprehensive income (loss) of equity investments
(note 9) |
|
204 |
|
|
(79 |
) |
Remeasurement of defined benefit plans |
|
17,706 |
|
|
(8,413 |
) |
Other comprehensive loss, net of tax |
|
(27,732 |
) |
|
(875 |
) |
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE
PERIOD |
$ |
8,148 |
|
$ |
(28,192 |
) |
See accompanying notes to the consolidated financial
statements.
|
Martinrea
International Inc. |
Consolidated
Statements of Changes in Equity |
(in
thousands of Canadian dollars) |
|
|
Capital stock |
|
Contributedsurplus |
|
Accumulatedothercomprehensiveincome |
|
Retainedearnings |
|
Total equity |
|
BALANCE AT DECEMBER 31, 2019 |
$ |
661,422 |
|
$ |
42,449 |
|
$ |
89,107 |
|
$ |
425,445 |
|
$ |
1,218,423 |
|
Net loss for the period |
|
— |
|
|
— |
|
|
— |
|
|
(27,317 |
) |
|
(27,317 |
) |
Compensation expense related
to stock options |
|
— |
|
|
2,416 |
|
|
— |
|
|
— |
|
|
2,416 |
|
Dividends ($0.20 per
share) |
|
— |
|
|
— |
|
|
— |
|
|
(16,030 |
) |
|
(16,030 |
) |
Exercise of employee stock
options |
|
3,479 |
|
|
(1,005 |
) |
|
— |
|
|
— |
|
|
2,474 |
|
Repurchase of common
shares |
|
(2,474 |
) |
|
— |
|
|
— |
|
|
(893 |
) |
|
(3,367 |
) |
Other comprehensive income
(loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
— |
|
|
— |
|
|
— |
|
|
(8,413 |
) |
|
(8,413 |
) |
Foreign currency translation differences |
|
— |
|
|
— |
|
|
3,900 |
|
|
— |
|
|
3,900 |
|
Share of other comprehensive loss of equity investments |
|
— |
|
|
— |
|
|
(79 |
) |
|
— |
|
|
(79 |
) |
Cash flow hedging derivative and non-derivative financial
instruments: |
|
|
|
|
|
Unrealized gain in fair value of financial instruments |
|
— |
|
|
— |
|
|
2,715 |
|
|
— |
|
|
2,715 |
|
Reclassification of loss to net income (loss) |
|
— |
|
|
— |
|
|
1,002 |
|
|
— |
|
|
1,002 |
|
BALANCE AT DECEMBER 31, 2020 |
|
662,427 |
|
|
43,860 |
|
|
96,645 |
|
|
372,792 |
|
|
1,175,724 |
|
Net income for the period |
|
— |
|
|
— |
|
|
— |
|
|
35,880 |
|
|
35,880 |
|
Compensation expense related
to stock options |
|
— |
|
|
1,224 |
|
|
— |
|
|
— |
|
|
1,224 |
|
Dividends ($0.20 per
share) |
|
— |
|
|
— |
|
|
— |
|
|
(16,070 |
) |
|
(16,070 |
) |
Exercise of employee stock
options |
|
988 |
|
|
(239 |
) |
|
— |
|
|
— |
|
|
749 |
|
Other comprehensive income
(loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
— |
|
|
— |
|
|
— |
|
|
17,706 |
|
|
17,706 |
|
Foreign currency translation differences |
|
— |
|
|
— |
|
|
(42,520 |
) |
|
— |
|
|
(42,520 |
) |
Share of other comprehensive income of equity investments |
|
— |
|
|
— |
|
|
204 |
|
|
— |
|
|
204 |
|
Cash flow hedging derivative and non-derivative financial
instruments: |
|
|
|
|
|
Unrealized gain in fair value of financial instruments |
|
— |
|
|
— |
|
|
892 |
|
|
— |
|
|
892 |
|
Reclassification of gain to net income (loss) |
|
— |
|
|
— |
|
|
(4,014 |
) |
|
— |
|
|
(4,014 |
) |
BALANCE AT DECEMBER 31, 2021 |
$ |
663,415 |
|
$ |
44,845 |
|
$ |
51,207 |
|
$ |
410,308 |
|
$ |
1,169,775 |
|
See accompanying notes to the consolidated financial
statements.
|
Martinrea
International Inc. |
Consolidated
Statements of Cash Flows |
(in
thousands of Canadian dollars) |
|
|
Year ended |
|
Year ended |
|
|
December 31, 2021 |
|
December 31, 2020 |
|
CASH PROVIDED BY (USED
IN): |
|
|
OPERATING
ACTIVITIES: |
|
|
Net income
(loss) for the period |
$ |
35,880 |
|
$ |
(27,317 |
) |
Adjustments for: |
|
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
235,434 |
|
|
227,338 |
|
Amortization of customer contracts and relationships |
|
— |
|
|
1,835 |
|
Amortization of development costs |
|
12,788 |
|
|
11,807 |
|
Impairment of assets (note 12) |
|
— |
|
|
85,783 |
|
Unrealized gain on foreign exchange forward contracts |
|
(4,744 |
) |
|
(647 |
) |
Finance expense |
|
32,918 |
|
|
35,771 |
|
Income tax expense |
|
11,381 |
|
|
12,007 |
|
Loss on disposal of property, plant and equipment |
|
958 |
|
|
543 |
|
Deferred and restricted share units expense (benefit) (note
17) |
|
(1,172 |
) |
|
8,588 |
|
Stock options expense |
|
1,224 |
|
|
2,416 |
|
Share of loss of equity investments (note 9) |
|
3,924 |
|
|
2,310 |
|
Gain on dilution of equity investments (note 9) |
|
(7,800 |
) |
|
(866 |
) |
Pension and other post-retirement benefits expense |
|
3,993 |
|
|
4,132 |
|
Contributions made to pension and other post-retirement
benefits |
|
(3,353 |
) |
|
(5,602 |
) |
|
|
321,431 |
|
|
358,098 |
|
Changes in non-cash working capital items: |
|
|
Trade and other receivables |
|
(57,153 |
) |
|
26,605 |
|
Inventories |
|
(109,526 |
) |
|
(50,686 |
) |
Prepaid expenses and deposits |
|
(3,282 |
) |
|
4,349 |
|
Trade, other payables and provisions |
|
100,232 |
|
|
91,780 |
|
|
|
251,702 |
|
|
430,146 |
|
Interest paid |
|
(35,042 |
) |
|
(36,851 |
) |
Income taxes paid |
|
(36,628 |
) |
|
(38,273 |
) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
180,032 |
|
$ |
355,022 |
|
|
|
|
FINANCING ACTIVITIES: |
|
|
Increase in long-term debt (net of deferred financing fees) |
|
197,294 |
|
|
103,509 |
|
Repayment of long-term debt |
|
(18,296 |
) |
|
(43,462 |
) |
Principal payments of lease liabilities |
|
(33,753 |
) |
|
(32,966 |
) |
Dividends paid |
|
(16,066 |
) |
|
(15,628 |
) |
Exercise of employee stock options |
|
749 |
|
|
2,474 |
|
Repurchase of common shares |
|
— |
|
|
(3,367 |
) |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
$ |
129,928 |
|
$ |
10,560 |
|
|
|
|
INVESTING ACTIVITIES: |
|
|
Purchase of property, plant and equipment (excluding capitalized
interest)* |
|
(290,230 |
) |
|
(288,590 |
) |
Capitalized development costs |
|
(8,533 |
) |
|
(12,304 |
) |
Equity investments (note 9) |
|
(8,036 |
) |
|
(5,000 |
) |
Proceeds on disposal of property, plant and equipment |
|
944 |
|
|
476 |
|
Business acquisition (note 3) |
|
— |
|
|
(26,531 |
) |
NET CASH USED IN INVESTING ACTIVITIES |
$ |
(305,855 |
) |
$ |
(331,949 |
) |
|
|
|
Effect
of foreign exchange rate changes on cash and cash equivalents |
|
(3,600 |
) |
|
180 |
|
|
|
|
INCREASE IN CASH AND
CASH EQUIVALENTS |
|
505 |
|
|
33,813 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD |
|
152,786 |
|
|
118,973 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
153,291 |
|
$ |
152,786 |
|
*As at December 31, 2021, $113,233 (December 31,
2020 - $61,207) of purchases of property, plant and equipment
remain unpaid and are recorded in trade and other payables and
provisions.
See accompanying notes to the consolidated financial
statements.
Martinrea (TSX:MRE)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Martinrea (TSX:MRE)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024