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 first quarter ended March 31, 2022
and that it has declared a quarterly cash dividend of $0.05 per
share.
HIGHLIGHTS
- Total sales of $1,155.0 million, up
15.8% year-over-year; production sales of $1,102.4 million, up
19.3% year-over-year
- First quarter diluted net earnings
per share and Adjusted Net Earnings per Share(1) of $0.31
- First quarter Adjusted EBITDA(1) of
$112.4 million, up 2.3% year-over-year, and up 77.8% sequentially
over Q4 2021
- First quarter results continued to
be impacted by cost inflation, new program launches, and production
disruptions
- Results were much improved
sequentially over Q3 and Q4 of 2021, as we witnessed a lower level
of semiconductor-related production shutdowns and customer
call-offs during the quarter
- 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 3.31x. For bank covenant purposes, the
net-debt-to-Adjusted EBITDA(1) ratio was 2.43x; this calculation
excludes third and fourth quarter Adjusted EBITDA(1) with the
remaining quarters pro-rated, as per our amended lending agreement
with our banking syndicate
- Quarterly cash dividend of $0.05
declared
OVERVIEW
Pat D’Eramo, President and Chief Executive
Officer, stated: “Our first-quarter performance was much improved
over the third and fourth quarters of 2021. Volume and mix were
more favourable to start the year, as we witnessed a lower level of
semiconductor-related shutdowns and customer call-offs with key
Martinrea programs, including the Chevrolet Equinox and Sierra and
Silverado pickup truck platforms posting higher production numbers
during the quarter. We continue to experience production
disruptions with some customers, as well as persistent inflationary
cost pressures, with rising energy prices in Europe being the most
pervasive. We also continue to work through the heaviest period of
new business launch activity in the Company’s history. These
factors continue to keep margins below their long-run potential –
based on history, and on what we believe our operations can
achieve. The good news is, we are off to a good start in 2022 as
our first quarter performance demonstrates. While uncertainties
persist, results in the back half of the year should demonstrate
steady improvement over the first half, as supply chain conditions
improve, inflationary costs either normalize or are recovered
through commercial negotiations, or some combination thereof, and
our launch activity recedes to normal levels. We believe this will
set the stage for a multi-year period of strong production volumes,
with our plants running at full capacity, as industry demand is
unwavering. As such, we remain confident in our ability to meet our
2023 outlook, which calls for production sales (excluding tooling
sales) of $4.6 to $4.8 billion, an Adjusted Operating Income
Margin(1) exceeding 8%, and over $200 million in Free Cash
Flow(1).”
Fred Di Tosto, Chief Financial Officer, stated:
“Sales for the first quarter, excluding tooling sales of $52.6
million, were $1,102.4 million, and Adjusted Net Earnings per
Share(1) was $0.31. Adjusted Operating Income of $44.3 million and
Adjusted EBITDA of $112.4 million were generally consistent with
year-ago levels, and up sharply over the third and fourth quarters
of 2021. As expected, our results were much improved to start the
year despite the fact that we continue to work through challenges,
including supply chain-related production disruptions, input cost
inflation, and higher than normal launch activity. Free Cash
Flow(1) was negative during the quarter, reflecting the timing of
working capital flows, which can be lumpy and unpredictable between
quarters. Seasonality is also a factor, as we tend to harvest
working capital in the fourth quarter while we tend to deploy it in
the first quarter.”
Rob Wildeboer, Executive Chairman, stated: “As
we look at the current state of our industry, and the challenges we
continue to face, including supply chain issues, erratic production
schedules, cost inflation, and at a more macro level, geopolitical
uncertainty with a major war in Ukraine, and the prospect of rising
interest rates, we remind people of the resiliency our Company has
demonstrated through past cycles. In our 20 years in the automotive
parts industry, we lived through downturns brought about by the
tragic events of September 11, 2001, the global financial crisis of
2008-2009, as well as the COVID-19 pandemic that resulted in the
complete shutdown of our industry in early 2020, and its
after-effects which continue to be felt today. In every case, we
protected our balance sheet and employees, and emerged as a
stronger company and a stronger competitor. Our resilience is a
function of our entrepreneurial spirit, which encourages our people
to think and act like owners with a stake in the business. It is a
cornerstone of our culture along with Lean thinking and a Golden
Rule philosophy of treating people the way we want to be treated.
It is these principles that will enable us to navigate through the
current set of challenges, as they have with all challenges we have
faced in the past. And they are demonstrated by what I believe is a
really solid start to the year.”
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 three months ended
March 31, 2022 (“MD&A”), the Company’s interim condensed
consolidated financial statements for the first quarter ended March
31, 2022 (the “interim 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 table sets out certain highlights
of the Company’s performance for the three months ended March 31,
2022 and 2021. Refer to the Company’s interim financial statements
for the three months ended March 31, 2022 for a detailed account of
the Company’s performance for the periods presented in the table
below.
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
|
$ Change |
|
% Change |
Sales |
$ |
1,155,038 |
|
|
$ |
997,150 |
|
|
157,888 |
|
|
15.8 |
% |
Gross Margin |
|
122,436 |
|
|
|
120,857 |
|
|
1,579 |
|
|
1.3 |
% |
Operating Income |
|
40,049 |
|
|
|
47,430 |
|
|
(7,381 |
) |
|
(15.6 |
%) |
Net
Income for the period |
|
25,208 |
|
|
|
38,701 |
|
|
(13,493 |
) |
|
(34.9 |
%) |
Net Earnings per Share - Basic and Diluted |
$ |
0.31 |
|
|
$ |
0.48 |
|
|
(0.17 |
) |
|
(35.4 |
%) |
Non-IFRS Measures* |
|
|
|
|
|
|
|
Adjusted Operating Income |
$ |
44,286 |
|
|
$ |
48,459 |
|
|
(4,173 |
) |
|
(8.6 |
%) |
% of Sales |
|
3.8 |
% |
|
|
4.9 |
% |
|
|
|
|
Adjusted EBITDA |
|
112,379 |
|
|
|
109,815 |
|
|
2,564 |
|
|
2.3 |
% |
% of Sales |
|
9.7 |
% |
|
|
11.0 |
% |
|
|
|
|
Adjusted Net Income |
|
24,842 |
|
|
|
32,631 |
|
|
(7,789 |
) |
|
(23.9 |
%) |
Adjusted Net Earnings per Share - Basic and Diluted |
$ |
0.31 |
|
|
$ |
0.41 |
|
|
(0.10 |
) |
|
(24.4 |
%) |
*Non-IFRS Measures
The Company prepares its interim 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”, “Adjusted Net Earnings per
Share (on a basic and diluted basis)”, “Adjusted Operating Income”,
"Adjusted EBITDA”, “Free Cash Flow”, and “Net Debt”.
The following tables provide a reconciliation of
IFRS “Net Income” to Non-IFRS “Adjusted Net Income”, “Adjusted
Operating Income” and “Adjusted EBITDA”.
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
Net Income |
$ |
25,208 |
|
|
$ |
38,701 |
|
Adjustments, after tax* |
|
(366 |
) |
|
|
(6,070 |
) |
Adjusted Net Income |
$ |
24,842 |
|
|
$ |
32,631 |
|
*Adjustments are explained in the "Adjustments
to Net Income" section of this Press Release
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
Net Income |
$ |
25,208 |
|
$ |
38,701 |
|
Income tax expense |
|
8,220 |
|
|
12,954 |
|
Other finance expense
(income) |
|
316 |
|
|
(5,762 |
) |
Share of loss of equity
investments |
|
1,101 |
|
|
926 |
|
Finance expense |
|
9,254 |
|
|
8,411 |
|
Adjustments, before tax* |
|
187 |
|
|
(6,771 |
) |
Adjusted Operating Income |
$ |
44,286 |
|
$ |
48,459 |
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
65,372 |
|
|
58,058 |
|
Amortization of intangible
assets |
|
2,721 |
|
|
3,298 |
|
Adjusted EBITDA |
$ |
112,379 |
|
$ |
109,815 |
|
*Adjustments are explained in the "Adjustments
to Net Income" section of this Press Release
SALES
Three months ended March 31, 2022 to three months ended
March 31, 2021 comparison
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
|
$ Change |
|
% Change |
North America |
$ |
859,700 |
|
|
$ |
704,130 |
|
|
155,570 |
|
|
22.1 |
% |
Europe |
|
261,462 |
|
|
|
254,069 |
|
|
7,393 |
|
|
2.9 |
% |
Rest of the World |
|
39,753 |
|
|
|
46,513 |
|
|
(6,760 |
) |
|
(14.5 |
%) |
Eliminations |
|
(5,877 |
) |
|
|
(7,562 |
) |
|
1,685 |
|
|
22.3 |
% |
Total Sales |
$ |
1,155,038 |
|
|
$ |
997,150 |
|
|
157,888 |
|
|
15.8 |
% |
The Company’s consolidated sales for the first
quarter of 2022 increased by $157.9 million or 15.8% to $1,155.0
million as compared to $997.2 million for the first quarter of
2021. The total increase in sales was driven by year-over-year
increases in the North America and Europe operating segments,
partially offset by a year-over-year decrease in the Rest of the
World.
Sales for the first quarter of 2022 in the
Company’s North America operating segment increased by $155.6
million or 22.1% to $859.7 million from $704.1 million for the
first quarter of 2021. The increase was due generally to the
recovery in production volumes of certain light vehicle platforms
that were disproportionately impacted by the industry-wide shortage
of semiconductor chips during 2021; and the launch and ramp up of
new programs during or subsequent to the first quarter of 2021,
including the new Jeep Grand Cherokee and Wagoneer, Nissan
Pathfinder, Ford Mustang Mach E, and other pure electric vehicle
platforms with Lucid Motors and Tesla. These positive factors were
partially offset by a decrease in tooling sales of $22.9 million,
which are typically dependent on the timing of tooling construction
and final acceptance by the customer; 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 first quarter
of 2022 of $3.7 million as compared to the first quarter of
2021.
Sales for the first quarter of 2022 in the
Company’s Europe operating segment increased by $7.4 million or
2.9% to $261.5 million from $254.1 million for the first quarter of
2021. The increase can be attributed to the launch of new programs
during or subsequent to the first quarter of 2021, mainly with
Lucid Motors, Daimler, and Volvo; the impact of aluminum material
passthrough on customer pricing; and a $2.7 million increase in
tooling sales. 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 first quarter of 2022 of $18.6 million as compared to the first
quarter of 2021; and overall lower OEM light vehicle production
volumes, which decreased in Europe by approximately 14%
year-over-year, primarily as a result of the industry-wide shortage
of semiconductor chips and other supply chain disruptions.
Sales for the first quarter of 2022 in the
Company’s Rest of the World operating segment decreased by $6.8
million or 14.5% to $39.8 million from $46.5 million in the first
quarter of 2021. The decrease was largely driven by lower
year-over-year production volumes, including a program that came
with the operations acquired from Metalsa that ended production
during or subsequent to the first quarter of 2021; and a $0.3
million decrease in tooling sales. These negative factors were
partially offset by the launch of new programs during or subsequent
to the first quarter of 2021, namely with Geely; and a $0.1 million
positive foreign exchange impact from the translation of foreign
denominated production sales as compared to the first quarter of
2021.
Overall tooling sales decreased by $20.5 million
to $52.6 million for the first quarter of 2022 from $73.1 million
for the first quarter of 2021.
GROSS MARGIN
Three months ended March 31, 2022 to
three months ended March 31, 2021 comparison
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
|
$ Change |
|
% Change |
Gross margin |
$ |
122,436 |
|
|
$ |
120,857 |
|
|
1,579 |
|
1.3 |
% |
% of
Sales |
|
10.6 |
% |
|
|
12.1 |
% |
|
|
|
|
The gross margin percentage for the first
quarter of 2022 of 10.6% decreased as a percentage of sales by 1.5%
as compared to the gross margin percentage for the first quarter of
2021 of 12.1%. The decrease in gross margin as a percentage of
sales was generally due to:
- higher labour, material and energy
costs;
- operational inefficiencies at
certain operating facilities including launch related costs and
upfront costs incurred in preparation of upcoming new
programs;
- production inefficiencies related
to the semiconductor chip shortage driven by the unpredictability
of customer production schedules; and
- a decrease in COVID-related
government subsidies.
These factors were partially offset by:
- overall higher production sales
volume and corresponding higher utilization of assets;
- favourable commercial
settlements;
- productivity and efficiency
improvements at certain operating facilities; and
- a decrease in tooling sales which
typically earn low margins for the Company.
ADJUSTMENTS TO INCOME
Adjusted Net Income excludes certain items as
set out in the following table and described in the notes thereto.
Management uses Adjusted Net Income 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 March 31, 2022 to
three months ended March 31, 2021 comparison
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
|
$ Change |
NET INCOME |
$ |
25,208 |
|
|
$ |
38,701 |
|
|
$ |
(13,493 |
) |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Restructuring costs (1) |
|
4,237 |
|
|
|
1,029 |
|
|
|
3,208 |
|
Gain on dilution of equity
investments (2) |
|
(4,050 |
) |
|
|
(7,800 |
) |
|
|
3,750 |
|
ADJUSTMENTS, BEFORE TAX |
$ |
187 |
|
|
$ |
(6,771 |
) |
|
$ |
6,958 |
|
|
|
|
|
|
|
Tax
impact of above items |
|
(553 |
) |
|
|
701 |
|
|
|
(1,254 |
) |
ADJUSTMENTS, AFTER TAX |
$ |
(366 |
) |
|
$ |
(6,070 |
) |
|
$ |
5,704 |
|
|
|
|
|
|
|
ADJUSTED NET INCOME |
$ |
24,842 |
|
|
$ |
32,631 |
|
|
$ |
(7,789 |
) |
|
|
|
|
|
|
Number of Shares Outstanding –
Basic (‘000) |
|
80,367 |
|
|
|
80,296 |
|
|
|
Adjusted Basic Net Earnings
Per Share |
$ |
0.31 |
|
|
$ |
0.41 |
|
|
|
Number of Shares Outstanding –
Diluted (‘000) |
|
80,370 |
|
|
|
80,533 |
|
|
|
Adjusted Diluted Net Earnings Per Share |
$ |
0.31 |
|
|
$ |
0.41 |
|
|
|
(1) Restructuring
costs
Additions to the restructuring provision during
the first quarter of 2022 totaled $4.2 million and represent
employee-related severance resulting from the rightsizing of
operations in Canada related to the cancellation of an OEM light
vehicle platform well before the end of its expected life
cycle.
Additions to the restructuring provision during
the first quarter of 2021 totaled $1.0 million and represent
employee-related severance resulting from the rightsizing of an
operating facility in Germany.
(2) Gain on dilution of
equity investments
As at December 31, 2021, the Company held
35,045,954 common shares of NanoXplore Inc. (“NanoXplore”)
representing a 22.2% equity interest in NanoXplore (on a
non-diluted basis). On February 24, 2022, NanoXplore closed a
bought deal public offering of 6,522,000 common shares from
treasury at a price of $4.60 per common share for aggregate gross
proceeds of $30.0 million. Upon finalization of the transaction,
the Company’s net ownership interest decreased to 21.2% from 22.2%.
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 $4.1 million during the first quarter of 2022.
As at December 31, 2020, the Company held
34,045,954 common shares of 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 during the first
quarter of 2021.
NET INCOME
Three months ended March 31, 2022 to three months ended
March 31, 2021 comparison
|
Three months ended March 31, 2022 |
|
Three months ended March 31, 2021 |
|
$ Change |
|
% Change |
Net Income |
$ |
25,208 |
|
$ |
38,701 |
|
(13,493 |
) |
|
(34.9 |
%) |
Adjusted Net Income |
|
24,842 |
|
$ |
32,631 |
|
(7,789 |
) |
|
(23.9 |
%) |
Net Earnings per Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
0.31 |
|
$ |
0.48 |
|
|
|
|
Adjusted Net Earnings per
Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
0.31 |
|
$ |
0.41 |
|
|
|
|
Net Income, before adjustments, for the first
quarter of 2022 decreased by $13.5 million to $25.2 million or
$0.31 per share, on a basic and diluted basis, from a Net Income of
$38.7 million or $0.48 per share, on a basic and diluted basis, for
the first quarter of 2021. Excluding the adjustments explained in
Table A under “Adjustments to Net Income”, Adjusted Net Income for
the first quarter of 2022 decreased by $7.8 million to $24.8
million or $0.31 per share, on a basic and diluted basis, from
$32.6 million or $0.41 per share, on a basic and diluted basis, for
the first quarter of 2021.
Adjusted Net Income for the first quarter of
2022, as compared to the first quarter of 2021, was negatively
impacted by the following:
- a net foreign
exchange loss of $0.3 million for the first quarter of 2022
compared to a gain of $5.3 million for the first quarter of
2021;
- a year-over-year increase in
SG&A expense, as previously discussed; and
- a year-over-year increase in
research and development costs.
These factors were partially offset by a
slightly higher gross margin on higher year-over-year sales volume,
as previously explained.
DIVIDEND
A cash dividend of $0.05 per share has been
declared by the Board of Directors payable to shareholders of
record on June 30, 2022, on or about July 15, 2022.
ABOUT MARTINREA INTERNATIONAL
INC.
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, May 5, 2022 at 5:30 p.m. Eastern
Time. To participate, please dial 416-641-6104 (Toronto area) or
800-952-5114 (toll free Canada and US) and enter participant code
8174433#. Please call 10 minutes prior to the start of the
conference call.
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 – 8602412#). The rebroadcast will be available until
June 5, 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 (including
for 2022 and 2023) as to future results, revenue, sales, margin,
gross margin, earnings, and earnings per share, adjusted earnings
per share, free cash flow, volumes, adjusted net earnings per
share, operating income margins, operating margins, adjusted
operating income margins; the expected impact of or duration of the
COVID-19 pandemic (including the related global semi-conductor chip
shortage, and supply chain issues), the growth of the Company and
pursuit of, and belief in, its strategies, its long-term potential
growth and continued improvement in results; the strength, recovery
and growth of the automotive industry and continuing challenges
(including supply chain, energy, inflation, erratic production
schedules), and the payment of dividends 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
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”, “Adjusted Net
Earnings per Share (on a basic and diluted basis)”, “Adjusted
Operating Income”, "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 three months ended March
31, 2022 and in this press release.
Martinrea International Inc.Interim Condensed
Consolidated Balance Sheets(in thousands of Canadian dollars)
(unaudited)
|
Note |
March 31, 2022 |
December 31, 2021 |
ASSETS |
|
|
|
Cash and cash equivalents |
|
$ |
96,336 |
$ |
153,291 |
Trade and other
receivables |
2 |
|
815,378 |
|
634,184 |
Inventories |
3 |
|
604,879 |
|
590,784 |
Prepaid expenses and
deposits |
|
|
27,296 |
|
23,892 |
Income
taxes recoverable |
|
|
7,585 |
|
18,609 |
TOTAL CURRENT ASSETS |
|
|
1,551,474 |
|
1,420,760 |
Property, plant and equipment |
4 |
|
1,713,920 |
|
1,727,914 |
Right-of-use assets |
5 |
|
230,468 |
|
222,934 |
Deferred tax assets |
|
|
140,217 |
|
138,612 |
Intangible assets |
6 |
|
45,772 |
|
47,809 |
Investments |
7 |
|
59,270 |
|
55,215 |
TOTAL NON-CURRENT ASSETS |
|
|
2,189,647 |
|
2,192,484 |
TOTAL ASSETS |
|
$ |
3,741,121 |
$ |
3,613,244 |
|
|
|
|
LIABILITIES |
|
|
|
Trade and other payables |
|
$ |
1,224,016 |
$ |
1,110,350 |
Provisions |
8 |
|
9,619 |
|
6,272 |
Income taxes payable |
|
|
12,854 |
|
11,955 |
Current portion of long-term
debt |
9 |
|
18,510 |
|
20,173 |
Current
portion of lease liabilities |
10 |
|
39,172 |
|
39,322 |
TOTAL CURRENT LIABILITIES |
|
|
1,304,171 |
|
1,188,072 |
Long-term debt |
9 |
|
999,880 |
|
990,817 |
Lease liabilities |
10 |
|
209,691 |
|
200,455 |
Pension and other
post-retirement benefits |
|
|
39,386 |
|
49,530 |
Deferred tax liabilities |
|
|
15,185 |
|
14,595 |
TOTAL NON-CURRENT LIABILITIES |
|
|
1,264,142 |
|
1,255,397 |
TOTAL LIABILITIES |
|
|
2,568,313 |
|
2,443,469 |
|
|
|
|
EQUITY |
|
|
|
Capital stock |
12 |
|
663,415 |
|
663,415 |
Contributed surplus |
|
|
45,041 |
|
44,845 |
Accumulated other
comprehensive income |
|
|
23,748 |
|
51,207 |
Retained earnings |
|
|
440,604 |
|
410,308 |
TOTAL EQUITY |
|
|
1,172,808 |
|
1,169,775 |
TOTAL LIABILITIES AND EQUITY |
|
$ |
3,741,121 |
$ |
3,613,244 |
Contingencies (note 18)
See accompanying notes to the interim condensed consolidated
financial statements.
On behalf of the Board:
"Robert Wildeboer" |
Director |
|
"Terry Lyons" |
Director |
|
Martinrea International Inc.Interim Condensed
Consolidated Statements of Operations(in thousands of Canadian
dollars, except per share amounts) (unaudited)
|
Note |
Three months endedMarch 31,
2022 |
Three months endedMarch 31,
2021 |
|
|
|
|
SALES |
|
$ |
1,155,038 |
|
$ |
997,150 |
|
|
|
|
|
Cost of sales (excluding
depreciation of property, plant and equipment and right-of-use
assets) |
|
|
(970,945 |
) |
|
(822,074 |
) |
Depreciation of property, plant and equipment and right-of-use
assets (production) |
|
|
(61,657 |
) |
|
(54,219 |
) |
Total cost of sales |
|
|
(1,032,602 |
) |
|
(876,293 |
) |
GROSS MARGIN |
|
|
122,436 |
|
|
120,857 |
|
|
|
|
|
Research and development
costs |
|
|
(9,112 |
) |
|
(7,809 |
) |
Selling, general and
administrative |
|
|
(65,323 |
) |
|
(60,750 |
) |
Depreciation of property,
plant and equipment and right-of-use assets (non-production) |
|
|
(3,715 |
) |
|
(3,839 |
) |
Restructuring costs |
8 |
|
(4,237 |
) |
|
(1,029 |
) |
OPERATING INCOME |
|
|
40,049 |
|
|
47,430 |
|
|
|
|
|
Share of loss of equity
investments |
7 |
|
(1,101 |
) |
|
(926 |
) |
Gain on dilution of equity
investments |
7 |
|
4,050 |
|
|
7,800 |
|
Finance expense |
14 |
|
(9,254 |
) |
|
(8,411 |
) |
Other
finance income (expense) |
14 |
|
(316 |
) |
|
5,762 |
|
INCOME BEFORE INCOME TAXES |
|
|
33,428 |
|
|
51,655 |
|
|
|
|
|
Income
tax expense |
11 |
|
(8,220 |
) |
|
(12,954 |
) |
NET INCOME FOR THE PERIOD |
|
$ |
25,208 |
|
$ |
38,701 |
|
|
|
|
|
Basic earnings per share |
13 |
$ |
0.31 |
|
$ |
0.48 |
|
Diluted
earnings per share |
13 |
$ |
0.31 |
|
$ |
0.48 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Comprehensive Income(in thousands of
Canadian dollars) (unaudited)
|
Three months endedMarch 31,
2022 |
Three months endedMarch 31,
2021 |
|
|
|
NET INCOME FOR THE PERIOD |
$ |
25,208 |
|
$ |
38,701 |
|
Other comprehensive
income (loss), net of tax: |
|
|
Items that may be reclassified to net income |
|
|
Foreign currency translation differences for foreign
operations |
|
(27,438 |
) |
|
(36,357 |
) |
Cash flow hedging derivative and non-derivative financial
instruments: |
|
|
Unrealized gain in fair value of financial instruments |
|
— |
|
|
892 |
|
Reclassification of gain to net income |
|
— |
|
|
(269 |
) |
Items that will not be reclassified to net
income |
|
|
Share of other comprehensive income (loss) of equity investments
(note 7) |
|
(21 |
) |
|
8 |
|
Remeasurement of defined benefit plans |
|
9,106 |
|
|
8,556 |
|
Other comprehensive loss, net of tax |
|
(18,353 |
) |
|
(27,170 |
) |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
$ |
6,855 |
|
$ |
11,531 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Changes in Equity(in thousands of
Canadian dollars) (unaudited)
|
Capital stock |
Contributed surplus |
Accumulated other comprehensive income |
Retained earnings |
Total equity |
BALANCE AT DECEMBER 31, 2020 |
$ |
662,427 |
$ |
43,860 |
|
$ |
96,645 |
|
$ |
372,792 |
|
$ |
1,175,724 |
|
Net income for the period |
|
— |
|
— |
|
|
— |
|
|
38,701 |
|
|
38,701 |
|
Compensation expense related
to stock options |
|
— |
|
340 |
|
|
— |
|
|
— |
|
|
340 |
|
Dividends ($0.05 per
share) |
|
— |
|
— |
|
|
— |
|
|
(4,015 |
) |
|
(4,015 |
) |
Exercise of employee stock
options |
|
103 |
|
(29 |
) |
|
— |
|
|
— |
|
|
74 |
|
Other comprehensive income
(loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
— |
|
— |
|
|
— |
|
|
8,556 |
|
|
8,556 |
|
Foreign currency translation differences |
|
— |
|
— |
|
|
(36,357 |
) |
|
— |
|
|
(36,357 |
) |
Share of other comprehensive income of equity investments |
|
— |
|
— |
|
|
8 |
|
|
— |
|
|
8 |
|
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 |
|
— |
|
— |
|
|
(269 |
) |
|
— |
|
|
(269 |
) |
BALANCE AT MARCH 31, 2021 |
|
662,530 |
|
44,171 |
|
|
60,919 |
|
|
416,034 |
|
|
1,183,654 |
|
Net loss for the period |
|
— |
|
— |
|
|
— |
|
|
(2,821 |
) |
|
(2,821 |
) |
Compensation expense related
to stock options |
|
— |
|
884 |
|
|
— |
|
|
— |
|
|
884 |
|
Dividends ($0.15 per
share) |
|
— |
|
— |
|
|
— |
|
|
(12,055 |
) |
|
(12,055 |
) |
Exercise of employee stock
options |
|
885 |
|
(210 |
) |
|
— |
|
|
— |
|
|
675 |
|
Other comprehensive income
(loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
— |
|
— |
|
|
— |
|
|
9,150 |
|
|
9,150 |
|
Foreign currency translation differences |
|
— |
|
— |
|
|
(6,163 |
) |
|
— |
|
|
(6,163 |
) |
Share of other comprehensive income of equity investments |
|
— |
|
— |
|
|
196 |
|
|
— |
|
|
196 |
|
Cash flow hedging derivative and non-derivative financial
instruments: |
|
|
|
|
|
Reclassification of gain to net loss |
|
— |
|
— |
|
|
(3,745 |
) |
|
— |
|
|
(3,745 |
) |
BALANCE AT DECEMBER 31, 2021 |
|
663,415 |
|
44,845 |
|
|
51,207 |
|
|
410,308 |
|
|
1,169,775 |
|
Net income for the period |
|
— |
|
— |
|
|
— |
|
|
25,208 |
|
|
25,208 |
|
Compensation expense related
to stock options |
|
— |
|
196 |
|
|
— |
|
|
— |
|
|
196 |
|
Dividends ($0.05 per
share) |
|
— |
|
— |
|
|
— |
|
|
(4,018 |
) |
|
(4,018 |
) |
Other comprehensive income
(loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
— |
|
— |
|
|
— |
|
|
9,106 |
|
|
9,106 |
|
Foreign currency translation differences |
|
— |
|
— |
|
|
(27,438 |
) |
|
— |
|
|
(27,438 |
) |
Share of other comprehensive loss of equity investments |
|
— |
|
— |
|
|
(21 |
) |
|
— |
|
|
(21 |
) |
BALANCE AT MARCH 31, 2022 |
$ |
663,415 |
$ |
45,041 |
|
$ |
23,748 |
|
$ |
440,604 |
|
$ |
1,172,808 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Cash Flows(in thousands of Canadian
dollars) (unaudited)
|
Three months endedMarch 31,
2022 |
Three months endedMarch 31,
2021 |
CASH PROVIDED BY (USED IN): |
|
|
OPERATING
ACTIVITIES: |
|
|
Net income for the period |
$ |
25,208 |
|
$ |
38,701 |
|
Adjustments for: |
|
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
65,372 |
|
|
58,058 |
|
Amortization of development costs |
|
2,721 |
|
|
3,298 |
|
Unrealized gain on foreign exchange forward contracts |
|
(837 |
) |
|
(744 |
) |
Finance expense |
|
9,254 |
|
|
8,411 |
|
Income tax expense |
|
8,220 |
|
|
12,954 |
|
Deferred and restricted share units benefit |
|
(1,087 |
) |
|
(1,707 |
) |
Stock options expense |
|
196 |
|
|
340 |
|
Share of loss of equity investments |
|
1,101 |
|
|
926 |
|
Gain on dilution of equity investments |
|
(4,050 |
) |
|
(7,800 |
) |
Pension and other post-retirement benefits expense |
|
868 |
|
|
1,015 |
|
Contributions made to pension and other post-retirement
benefits |
|
(1,365 |
) |
|
(938 |
) |
|
|
105,601 |
|
|
112,514 |
|
Changes in non-cash working
capital items: |
|
|
Trade and other receivables |
|
(190,412 |
) |
|
(84,801 |
) |
Inventories |
|
(23,182 |
) |
|
(47,996 |
) |
Prepaid expenses and deposits |
|
(3,649 |
) |
|
(2,339 |
) |
Trade, other payables and provisions |
|
153,605 |
|
|
99,859 |
|
|
|
41,963 |
|
|
77,237 |
|
Interest paid |
|
(9,959 |
) |
|
(9,176 |
) |
Income taxes paid |
|
(2,011 |
) |
|
(10,646 |
) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
$ |
29,993 |
|
$ |
57,415 |
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
Increase in long-term debt (net of deferred financing fees) |
|
20,000 |
|
|
50,976 |
|
Repayment of long-term debt |
|
(5,359 |
) |
|
(4,540 |
) |
Principal payments of lease liabilities |
|
(8,494 |
) |
|
(8,593 |
) |
Dividends paid |
|
(4,018 |
) |
|
(4,015 |
) |
Exercise of employee stock options |
|
— |
|
|
74 |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
$ |
2,129 |
|
$ |
33,902 |
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
Purchase of property, plant and equipment (excluding capitalized
interest)* |
|
(87,544 |
) |
|
(90,811 |
) |
Capitalized development costs |
|
(1,339 |
) |
|
(2,557 |
) |
Equity investments (note 7) |
|
(1,000 |
) |
|
(4,000 |
) |
NET CASH USED IN INVESTING ACTIVITIES |
$ |
(89,883 |
) |
$ |
(97,368 |
) |
|
|
|
Effect
of foreign exchange rate changes on cash and cash equivalents |
|
806 |
|
|
(1,387 |
) |
|
|
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
(56,955 |
) |
|
(7,438 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD |
|
153,291 |
|
|
152,786 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
96,336 |
|
$ |
145,348 |
|
*As at March 31, 2022, $92,289 (December 31,
2021 - $113,233) of purchases of property, plant and equipment
remain unpaid and are recorded in trade and other payables.
See accompanying notes to the interim condensed 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