Martinrea International Inc. Releases First Quarter Results and Announces Dividend
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E-mailTORONTO, ONTARIO -- (Marketwired) -- 05/05/15 -- Martinrea International Inc. (TSX: MRE), a leader in the production of quality metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector, announced today the release of its financial results for the first quarter ended March 31, 2015 and a quarterly dividend.
HIGHLIGHTS
-- Strong first quarter production sales -- Record net earnings -- Improving operating income and EBITDA margins -- $200 Million in incremental business awards -- Dividend of $0.03 per share announced
OVERVIEW
Pat D'Eramo, Martinrea's President and Chief Executive Officer stated: "We are pleased to report that our first quarter was strong in terms of sales and a record quarter in terms of profits. Our team is very focused on operations and making improvements, and that is translating to the bottom line. We are working hard on doing great work for our customers every day, and that has resulted in some nice incremental business awarded to us in the past several weeks. We have two aluminum based awards to announce. First, as noted on our last investor call, Jaguar Land Rover awarded us a new program for knuckle and control arms across various vehicle platforms approximating $100 million annually when fully launched in 2019. These products will be produced in our facilities in Spain and China, which are already being built, so management teams and facilities are already being put in place. Second, we have been awarded an engine block program from Ford for its 2.0L engine block, to be produced in our facilities in Spain and Germany, approximating $100 million annually when fully launched in 2020. These programs have a slow ramp up to peak volumes, so product sales help to defray the cost of ramping up, and they are across various vehicle platforms with generally longer production lives. Both these awards will see us producing parts for our customers into the late part of the next decade. These awards, together with the awards announced earlier this year, give us a total of approximately $400 million in incremental business awards in the past six months, a sign of customer confidence and our ability to deliver."
Fred Di Tosto, Martinrea's Chief Financial Officer, stated: "Sales for our first quarter, excluding tooling sales, were $887 million, in line with the previously announced sales guidance. In the first quarter, our net earnings per share, on a basic and diluted basis, was $0.36, above our quarterly guidance, as a result of stronger than expected performance in the month of March and some foreign exchange gains during the quarter. First quarter operating income and EBITDA margins improved nicely year over year and quarter over quarter, despite pre-operating costs at new plants currently preparing for upcoming launches. We continue to expect operating income margins to improve to over 6% by 2017, with steady improvement over the next three years. We were particularly pleased to see strengthening of our operating income margins in North America, as many U.S. Metallic plants showed improvement. Our European results were weaker year over year, as anticipated, given the pre-operating and launch costs in Spain and Slovakia, as these plants ramp up, and anticipated reduction in volumes of some programs in Germany. Our EBITDA for the quarter was $74.9 million, or 8.2% of sales, representing a 12% year-over-year increase, and a quarterly record for us."
Rob Wildeboer, Martinrea's Executive Chairman, stated: "Our company is as strong today as it has ever been, and we are bullish about our future as we continue to grow our business and our profits over time. We have a terrific group of people at Martinrea, dedicated to fulfilling our vision, and we thank them for their continuing efforts. This company has positive momentum that we believe will continue in the present automotive environment, even if there is a flattening of volumes in the industry. We are working hard to serve our customers well, not just in existing business and new product awards, but we have been assisting in some takeover work situations also, to help our customers keep up with their robust production schedules. For our upcoming quarter, we expect to generate sales for the quarter, excluding tooling sales, in the range of $920-960 million, and generate net earnings per share in the range of 37 to 41 cents per share. Both would be record financial results. We thank our stakeholders for their support, and we believe that support will be rewarded over time as we continue to strengthen our company."
RESULTS OF OPERATIONS
Results of operations include certain unusual and other items which have been separately disclosed, where appropriate, in order to provide a clear assessment of the underlying Company results. In addition to IFRS measures, management uses non-IFRS measures in the Company's disclosures that it believes provides the most appropriate basis on which to evaluate the Company's results.
OVERALL RESULTS
The following table sets out certain highlights of the Company's performance for the three months ended March 31, 2015 and 2014. Refer to the Company's interim condensed consolidated financial statements for the three months ended March 31, 2015 for a detailed account of the Company's performance for both periods presented in the table below. 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.
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Three months Three months
ended March ended March
31, 2015 31, 2014 $ Change % Change
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Sales $ 917,531 $ 864,493 53,038 6.1%
Gross Margin 95,639 87,479 8,160 9.3%
Operating Income 43,710 37,559 6,151 16.4%
Net Income for the period 30,508 26,659 3,849 14.4%
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Net Income Attributable to
Equity Holders of the Company $ 30,419 $ 16,691 13,728 82.2%
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Net Income per Share - Basic
and Diluted $ 0.36 $ 0.20 0.16 80.0%
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Non-IFRS Measures(i)
Adjusted Operating Income $ 43,710 $ 38,712 4,998 12.9%
as a % of Sales 4.8% 4.5%
Adjusted EBITDA 74,923 66,894 8,029 12.0%
as a % of Sales 8.2% 7.7%
Adjusted Net Earnings
Attributable to Equity Holders 30,419 17,556 12,863 73.3%
of the Company
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Adjusted Net Earnings per share
- Basic and Diluted $ 0.36 $ 0.21 0.15 71.4%
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(i)Non-IFRS Measures
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 financial 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 Income per Share (on a basic and diluted basis)", "Adjusted Operating Income" and "Adjusted EBITDA". Unusual and other items are explained in the "Adjustments to Net Income" section of the Company's Management Discussion and Analysis of Operating Results and Financial Position for the Quarter Ended March 31, 2015 ("MD&A").
The following tables provide a reconciliation of IFRS "Net Income Attributable to Equity Holders of the Company" to Non-IFRS "Adjusted Net Income Attributable to Equity Holders of the Company", "Adjusted Operating Income" and "Adjusted EBITDA":
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Three months Three months
ended March 31, ended March 31,
2015 2014
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Net Income Attributable to Equity Holders of
the Company $ 30,419 $ 16,691
Unusual and Other Items (after-tax)(i) - 865
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Adjusted Net Income Attributable to Equity
Holders of the Company $ 30,419 $ 17,556
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(i)Unusual and other items are explained in the "Adjustments to Net Income"
section of this Press Release.
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Three months Three months
ended March 31, ended March 31,
2015 2014
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Net Earnings Attributable to Equity Holders
of the Company $ 30,419 $ 16,691
Non-controlling interest 89 9,968
Income tax expense 9,249 5,499
Other finance income (2,602) 222
Finance costs 6,555 5,179
Unusual and Other Items (before-tax)(i) - 1,153
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Adjusted Operating Income $ 43,710 $ 38,712
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Depreciation of property, plant and
equipment 28,582 25,595
Amortization of intangible assets 3,201 2,447
Loss/(gain) on disposal of property, plant
and equipment (570) 140
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Adjusted EBITDA $ 74,923 $ 66,894
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(i)Unusual and other items are explained in the "Adjustments to Net Income"
section of this Press Release.
The year-over-year changes in significant accounts and financial highlights
are discussed in detail in the sections below.
SALES
Three months ended March 31, 2015 to three months ended March 31, 2014
comparison
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Three months Three months
ended March 31, ended March 31,
2015 2014 $ Change % Change
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North America $ 713,119 $ 663,664 49,455 7.5%
Europe 187,401 183,653 3,748 2.0%
Rest of the World 17,011 17,176 (165) (1.0%)
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Total Sales $ 917,531 $ 864,493 53,038 6.1%
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The Company's consolidated sales for the first quarter of 2015 increased by $53.0 million or 6.1% to $917.5 million as compared to $864.5 million for the first quarter of 2014. The total overall increase in sales was driven by increases in the Company's North America and Europe operating segments, partially offset by a slight year-over-year decrease in sales in the Rest of the World.
Sales for the first quarter of 2015 in the Company's North America operating segment increased by $49.5 million or 7.5% to $713.1 million from $663.7 million for the first quarter of 2014. The increase was due to the launch of new programs during or subsequent to the first quarter of 2014, including the new Chrysler 200 and Ford Edge; a $1.6 million increase in tooling sales, 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 positive impact on overall sales for the first quarter of 2015 of $58.0 million as compared to the first quarter of 2014. These positive factors were offset by lower year-over-year OEM production volumes on certain OEM light-vehicle platforms including the Chrysler Minivan platform, which is scheduled to be down for thirteen weeks in 2015 for re-tooling, the Ford Fusion and other light-vehicle platforms late in their life cycle.
Sales for the first quarter of 2015 in the Company's Europe operating segment increased by $3.7 million or 2.0% to $187.4 million from $183.7 million for the first quarter of 2014. The increase can be attributed to new incremental aluminum business with Jaguar Land Rover and a $1.3 million increase in tooling sales, which are typically dependent on the timing of tooling construction and final acceptance by the customer; 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 2015 of $8.5 million as compared to the first quarter of 2014, and lower overall production volumes in the Company's Martinrea Honsel German operations.
Sales for the first quarter of 2015 in the Company's Rest of the World operating segment decreased by $0.2 million or 1.0% to $17.0 million from $17.2 million in the first quarter of 2014. The slight decrease can be attributed to a year-over-year decrease in overall OEM light and medium heavy vehicle production in Brazil, partially offset by a $0.7 million increase in tooling sales and an increase in production sales in the Company's new fluids systems plant in China, which began operations in 2013 and continues to ramp up its backlog of business.
Overall tooling sales increased by $3.6 million to $30.5 million for the first quarter of 2015 from $26.9 million for the first quarter of 2014.
GROSS MARGIN
Three months ended March 31, 2015 to three months ended March 31, 2014
comparison
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Three months Three months
ended March 31, ended March 31,
2015 2014 $ Change % Change
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Gross margin $ 95,639 $ 87,479 8,160 9.3%
% of sales 10.4% 10.1%
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The gross margin percentage for the first quarter of 2015 of 10.4% increased as a percentage of sales by 0.3% as compared to the gross margin percentage for the first quarter of 2014 of 10.1%. The increase in gross margin as a percentage of sales was generally due to productivity and efficiency improvements at certain operating facilities, in particular in the Company's U.S. Metallic operations, partially offset by the following:
-- increased pre-operating and launch costs, in particular at new operating
facilities in Spain, Mexico, China and Riverside, Missouri as these new
plants prepare for upcoming new program launches;
-- operational inefficiencies and other costs at certain other facilities;
-- lower production volumes in the Company's Martinrea Honsel German
operations; and
-- the positive resolution of commercial disputes in the Company's European
operations which positively impacted the first quarter of 2014 as
compared to the first quarter of 2015.
ADJUSTMENTS TO NET INCOME
(ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)
Adjusted net income excludes certain unusual and other 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
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For the three For the three
months ended months ended
March 31, 2015 March 31, 2014 (a)-(b)
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(a) (b) Change
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NET INCOME (A) $30,419 $16,691 $13,728
Add back - Unusual and Other Items:
External legal and forensic
accounting costs related to
litigation (1) - 1,153 (1,153)
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TOTAL UNUSUAL AND OTHER ITEMS BEFORE
TAX - $1,153 $(1,153)
Tax impact of above item - (288) 288
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TOTAL UNUSUAL AND OTHER ITEMS AFTER
TAX (B) - $865 $(865)
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ADJUSTED NET INCOME (A + B) $30,419 $17,556 $12,863
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Number of Shares Outstanding - Basic
('000) 85,080 84,480
Adjusted Basic Net Income Per Share $0.36 $0.21
Number of Shares Outstanding -
Diluted ('000) 85,685 85,044
Adjusted Diluted Net Income Per
Share $0.36 $0.21
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(1) External Legal and Forensic Accounting Costs Related to Litigation
The costs added back for adjusted net income purposes for the first quarter of 2014 reflects the legal and forensic accounting costs not covered by insurance (recorded as SG&A expense) incurred by the Company in relation to specific litigation matters out of the ordinary course of business as outlined in the Company's Annual Information Form for the year ended December 31, 2014.
NET INCOME
(ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)
Three months ended March 31, 2015 to three months ended March 31, 2014
comparison
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Three months Three months
ended March 31, ended March 31,
2015 2014 $ Change % Change
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Net Income $ 30,419 $ 16,691 13,728 82.2%
Adjusted Net Income $ 30,419 $ 17,556 12,863 73.3%
Net Income per Share
Basic $ 0.36 $ 0.20
Diluted $ 0.36 $ 0.20
Adjusted Net Income per
Share
Basic $ 0.36 $ 0.21
Diluted $ 0.36 $ 0.21
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Net income, before adjustments, for the first quarter of 2015 increased by $13.7 million to $30.4 million from $16.7 million for the first quarter of 2014. Excluding the unusual and other item incurred during the first quarter of 2014 as explained in Table A under "Adjustments to Net Income", net income for the first quarter of 2015 increased to $30.4 million or $0.36 per share, on a basic and diluted basis, from $17.6 million or $0.21 per share, on a basic and diluted basis, for the first quarter of 2014.
Adjusted net income for the first quarter of 2015, as compared to the first quarter of 2014, was positively impacted by the following:
-- productivity and efficiency improvements at certain operating facilities
in particular in the Company's U.S. Metallic operations;
-- the inclusion of 100% of the net earnings from Martinrea Honsel after
the Company purchased the 45% non-controlling interest of the group on
August 7, 2014 (see "Acquisition" section of the MD&A for further
details on the transaction); and
-- a net foreign exchange gain of $2.6 million for the first quarter of
2015 compared to a net foreign exchange loss of $0.3 million for the
first quarter of 2014.
These factors were partially offset by the following:
-- increased pre-operating and launch costs, in particular at new operating
facilities in Spain, Mexico, China, and Riverside, Missouri as these new
plants prepare for upcoming new program launches;
-- operational inefficiencies and other costs at certain other facilities;
-- lower production volumes in the Company's Martinrea Honsel German
operations;
-- the positive resolution of commercial disputes in the Company's European
operations which positively impacted the first quarter of 2014 as
compared to the first quarter of 2015;
-- a higher effective tax rate on adjusted earnings due generally to the
mix of earnings (23.3% for the first quarter of 2015 compared to 17.4%
for the first quarter of 2014); and
-- year-over-year increases in SG&A expense as previously discussed,
research and development expenses, due mainly to increased amortization
of development costs, and finance expense related to increased levels of
debt primarily used to sustain the increased level of capital
expenditures related to new program launches and fund the purchase of
the 45% non-controlling interest of Martinrea Honsel on August 7, 2014
(see "Acquisition" section of the MD&A for further details on the
transaction).
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
Three months ended March 31, 2015 to three months ended March 31, 2014
comparison
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Three months Three months
ended March 31, ended March 31,
2015 2014 $ Change % Change
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Additions to Property,
Plant and Equipment $ 47,337 $ 37,051 10,286 27.8%
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Additions to property, plant and equipment increased by $10.3 million to $47.3 million in the first quarter of 2015 from $37.0 million in the first quarter of 2014. Additions as a percentage of sales increased year-over-year to 5.2% for the first quarter of 2015 compared to 4.3% for the first quarter of 2014. While capital expenditures are made to refurbish or replace assets consumed in the normal course of business and for productivity improvements, a large portion of the investment in the first quarter of 2015 continued to be for manufacturing equipment and multiple expansions for programs that recently launched or will be launching over the next 24 months.
DIVIDEND
A cash dividend of $0.03 per share has been declared by the Board of Directors payable to shareholders of record on June 30, 2015 on or about July 15, 2015.
ABOUT MARTINREA
Martinrea currently employs over 14,000 skilled and motivated people in 44 operating divisions in Canada, the United States, Mexico, Brazil, Germany, Slovakia, Spain and China.
Martinrea's vision for the future is to be the best, preferred and most valued automotive parts supplier in the world in the products and services we provide our customers. The Company's mission is to deliver: outstanding quality products and services to our customers; meaningful opportunity, job satisfaction and job security to our people through competitiveness and prudent growth; superior long term investment returns to our stakeholders; and positive contributions to our communities as good corporate citizens.
CONFERENCE CALL DETAILS
A conference call to discuss the financial results will be held on Wednesday, May 6, 2015 at 8:00 a.m. (Toronto time) which can be accessed by dialing 416-340-8410 or toll free 866-225-2055. Please call 10 minutes prior to the start of the conference call.
If you have any teleconferencing questions, please call Andre La Rosa at (416) 749-0314.
There will also be a rebroadcast of the call available by dialing (905) 694-9451 or toll free (800) 408-3053 (conference id - 9207366#). The rebroadcast will be available until May 20, 2015.
FORWARD-LOOKING INFORMATION
Special Note Regarding Forward-Looking Statements
This Press Release contains forward-looking statements within the meaning of applicable Canadian securities laws including related to the expectations of, improvements in, expansion of and/or guidance as to revenue, gross margin and earnings per share, statements as to the growth of the Company, opening of facilities and pursuit of its strategies, the launching of new programs including expectations as to the financial impact of launches, statements as to the progress and expectations of operational and productivity improvements and efficiencies, statements as to the reduction of costs, the Company's views on the long term outlook of the automotive industry and economic recovery, the Company's ability to capitalize on opportunities in the automotive industry, and 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. 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 and other public filings which can be found at www.sedar.com:
-- North American and global economic and political conditions;
-- the highly cyclical nature of the automotive industry and the industry's
dependence on consumer spending and general economic conditions;
-- the Company's dependence on a limited number of significant customers;
-- financial viability of suppliers;
-- the Company's reliance on critical suppliers and on suppliers for
components and the risk that suppliers will not be able to supply
components on a timely basis or in sufficient quantities;
-- competition;
-- the increasing pressure on the Company to absorb costs related to
product design and development, engineering, program management,
prototypes, validation and tooling;
-- increased pricing of raw materials;
-- outsourcing and insourcing trends;
-- the risk of increased costs associated with product warranty and recalls
together with the associated liability;
-- the Company's ability to enhance operations and manufacturing
techniques;
-- dependence on key personnel;
-- limited financial resources;
-- risks associated with the integration of acquisitions;
-- costs associated with rationalization of production facilities;
-- launch costs;
-- the potential volatility of the Company's share price;
-- changes in governmental regulations or laws including any changes to the
North American Free Trade Agreement;
-- labour disputes;
-- litigation;
-- currency risk;
-- fluctuations in operating results;
-- internal controls over financial reporting and disclosure controls and
procedures;
-- environmental regulation;
-- a shift away from technologies in which the Company is investing;
-- competition with low cost countries;
-- the Company's ability to shift its manufacturing footprint to take
advantage of opportunities in emerging markets;
-- risks of conducting business in foreign countries, including China,
Brazil and other growing markets;
-- potential tax exposure;
-- a change in the Company's mix of earnings between jurisdictions with
lower tax rates and those with higher tax rates, as well as the
Company's ability to fully benefit from tax losses;
-- under-funding of pension plans; and
-- the cost of post-employment benefits.
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".
Martinrea International Inc.
Interim Condensed Consolidated Balance Sheets
(in thousands of Canadian dollars) (unaudited)
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Note March 31, 2015 December 31, 2014
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ASSETS
Cash and cash equivalents $ 20,674 $ 52,401
Trade and other receivables 3 620,431 520,844
Inventories 4 328,164 313,436
Prepaid expenses and deposits 13,474 10,039
Income taxes recoverable 9,077 8,321
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TOTAL CURRENT ASSETS 991,820 905,041
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Property, plant and equipment 5 1,053,206 984,681
Deferred income tax assets 169,656 153,367
Intangible assets 6 76,509 71,806
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TOTAL NON-CURRENT ASSETS 1,299,371 1,209,854
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TOTAL ASSETS $ 2,291,191 $ 2,114,895
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LIABILITIES
Trade and other payables 7 $ 713,612 $ 645,862
Provisions 8 4,488 5,504
Income taxes payable 25,100 31,140
Current portion of long-term
debt 9 40,476 37,526
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TOTAL CURRENT LIABILITIES 783,676 720,032
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Long-term debt 9 693,013 654,916
Pension and other post-
retirement benefits 69,381 62,557
Deferred income tax liabilities 111,140 101,644
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TOTAL NON-CURRENT LIABILITIES 873,534 819,117
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TOTAL LIABILITIES $ 1,657,210 $ 1,539,149
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EQUITY
Capital Stock 11 702,673 694,198
Contributed surplus 43,298 45,347
Accumulated other comprehensive
income 82,991 55,927
Accumulated deficit (194,824) (219,480)
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TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY 634,138 575,992
Non-controlling interest 2 (157) (246)
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TOTAL EQUITY 633,981 575,746
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TOTAL LIABILITIES AND EQUITY $ 2,291,191 $ 2,114,895
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Contingencies (note 16)
See accompanying notes to the interim condensed consolidated financial
statements.
On behalf of the Board:
Robert Wildeboer, Director
Scott Balfour, Director
Martinrea International Inc.
Interim Condensed Consolidated Statements of Operations
(in thousands of Canadian dollars, except per share amounts) (unaudited)
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Three months ended Three months ended
Note March 31, 2015 March 31, 2014
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SALES $ 917,531 $ 864,493
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Cost of sales (excluding
depreciation of property,
plant and equipment) (794,997) (752,883)
Depreciation of property,
plant and equipment
(production) (26,895) (24,131)
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Total cost of sales (821,892) (777,014)
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GROSS MARGIN 95,639 87,479
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Research and development costs (5,596) (4,642)
Selling, general and
administrative (44,677) (43,331)
Depreciation of property,
plant and equipment (non-
production) (1,687) (1,464)
Amortization of customer
contracts and relationships (539) (343)
Gain/(loss) on disposal of
property, plant and equipment 570 (140)
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OPERATING INCOME 43,710 37,559
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Finance expense (6,555) (5,179)
Other finance income (expense) 13 2,602 (222)
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INCOME BEFORE INCOME TAXES 39,757 32,158
Income tax expense 10 (9,249) (5,499)
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NET INCOME FOR THE PERIOD $ 30,508 $ 26,659
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Non-controlling interest 2 (89) (9,968)
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NET INCOME ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY $ 30,419 $ 16,691
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Basic earnings per share 12 $ 0.36 $ 0.20
Diluted earnings per share 12 $ 0.36 $ 0.20
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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)
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Three months ended Three months ended
March 31, 2015 March 31, 2014
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NET INCOME FOR THE PERIOD $ 30,508 $ 26,659
Other comprehensive income, net of
tax:
Items that may be reclassified to
net income
Foreign currency translation
differences for foreign
operations 27,064 30,853
Items that will not be
reclassified to net income
Actuarial losses from the
remeasurement of defined benefit
plans (3,190) (3,195)
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Other comprehensive income, net of
tax 23,874 27,658
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TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD $ 54,382 $ 54,317
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Attributable to:
Equity holders of the Company 54,293 39,863
Non-controlling interest 89 14,454
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TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD $ 54,382 $ 54,317
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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)
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Equity attributable to equity holders of the
Company
---------------------------------------------
Cumulative
Capital Contributed Other translation
stock surplus equity account
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Balance at December 31, 2013 $689,975 $44,853 $(154,239) $26,085
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Net income for the period - - - -
Compensation expense related
to stock options - 110 - -
Change in fair value of put
option granted to non-
controlling interest - - (31,425) -
Dividends ($0.03 per share)
Other comprehensive income,
net of tax
Actuarial losses from the
remeasurement of defined
benefit plans - - - -
Foreign currency translation
differences - - - 26,367
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Balance at March 31, 2014 689,975 44,963 (185,664) 52,452
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Net income for the period - - - -
Compensation expense related
to stock options - 1,589 - -
Change in fair value of put
option granted to non-
controlling interest - - (50,003) -
Purchase of non-controlling
interest (note 2) - - 235,667 -
Dividends ($0.09 per share) - - - -
Exercise of employee stock
options 4,223 (1,205) - -
Other comprehensive loss, net
of tax
Actuarial losses from the
remeasurement of defined
benefit plans - - - -
Foreign currency translation
differences - - - 3,475
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Balance at December 31, 2014 694,198 45,347 - 55,927
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Net income for the period - - - -
Compensation expense related
to stock options - 199 - -
Dividends ($0.03 per share) - - - -
Exercise of employee stock
options 8,475 (2,248) - -
Other comprehensive income,
net of tax
Actuarial losses from the
remeasurement of defined
benefit plans - - - -
Foreign currency translation
differences - - - 27,064
----------------------------------------------------------------------------
Balance at March 31, 2015 $702,673 $43,298 $- $82,991
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Equity attributable to
equity holders of the
Company
----------------------
Non-
Accumulated controlling Total
deficit Total interest equity
----------------------------------------------------------------------------
Balance at December 31, 2013 $(142,376) $464,298 $89,713 $554,011
----------------------------------------------------------------------------
Net income for the period 16,691 16,691 9,968 26,659
Compensation expense related
to stock options - 110 - 110
Change in fair value of put
option granted to non-
controlling interest - (31,425) - (31,425)
Dividends ($0.03 per share) (2,535) (2,535) (2,535)
Other comprehensive income,
net of tax
Actuarial losses from the
remeasurement of defined
benefit plans (3,195) (3,195) - (3,195)
Foreign currency translation
differences - 26,367 4,486 30,853
----------------------------------------------------------------------------
Balance at March 31, 2014 (131,415) 470,311 104,167 574,478
----------------------------------------------------------------------------
Net income for the period 54,613 54,613 8,144 62,757
Compensation expense related
to stock options - 1,589 - 1,589
Change in fair value of put
option granted to non-
controlling interest - (50,003) - (50,003)
Purchase of non-controlling
interest (note 2) (127,198) 108,469 (108,469) -
Dividends ($0.09 per share) (7,624) (7,624) - (7,624)
Exercise of employee stock
options - 3,018 - 3,018
Other comprehensive loss, net
of tax
Actuarial losses from the
remeasurement of defined
benefit plans (7,856) (7,856) - (7,856)
Foreign currency translation
differences - 3,475 (4,088) (613)
----------------------------------------------------------------------------
Balance at December 31, 2014 (219,480) 575,992 (246) 575,746
----------------------------------------------------------------------------
Net income for the period 30,419 30,419 89 30,508
Compensation expense related
to stock options - 199 - 199
Dividends ($0.03 per share) (2,573) (2,573) - (2,573)
Exercise of employee stock
options - 6,227 - 6,227
Other comprehensive income,
net of tax
Actuarial losses from the
remeasurement of defined
benefit plans (3,190) (3,190) - (3,190)
Foreign currency translation
differences - 27,064 - 27,064
----------------------------------------------------------------------------
Balance at March 31, 2015 $(194,824) $634,138 $(157) $633,981
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 ended Three months ended
March 31, 2015 March 31, 2014
----------------------------------------------------------------------------
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net Income for the period $ 30,508 $ 26,659
Adjustments for:
Depreciation of property, plant
and equipment 28,582 25,595
Amortization of customer contracts
and relationships 539 343
Amortization of development costs 2,662 2,104
Unrealized losses on foreign
exchange forward contracts 1,000 2,535
Finance costs 6,555 5,179
Income tax expense 9,249 5,499
(Gain) Loss on disposal of
property, plant and equipment (570) 140
Stock based compensation 199 110
Pension and other post-retirement
benefits expense 1,097 1,167
Contributions made to pension and
other post-retirement benefits (1,468) (1,028)
----------------------------------------------------------------------------
78,353 68,303
Changes in non-cash working capital
items:
Trade and other receivables (75,420) (95,491)
Inventories 425 (16,423)
Prepaid expenses and deposits (2,945) (1,111)
Trade, other payables and
provisions 31,276 69,431
----------------------------------------------------------------------------
31,689 24,709
Interest paid (excluding
capitalized interest) (5,188) (4,712)
Income taxes paid (22,428) (12,242)
----------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 4,073 $ 7,755
----------------------------------------------------------------------------
FINANCING ACTIVITIES:
Increase in long-term debt 19,029 36,953
Repayment of long-term debt (9,597) (10,191)
Dividends paid (2,548) (2,535)
Exercise of employee stock options 6,227 -
----------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES $ 13,111 $ 24,227
----------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of property, plant and
equipment(i) (46,501) (42,823)
Capitalized development costs (4,022) (3,411)
Proceeds on disposal of property,
plant and equipment 1,845 593
----------------------------------------------------------------------------
NET CASH USED IN INVESTING
ACTIVITIES $ (48,678) $ (45,641)
----------------------------------------------------------------------------
Effect of foreign exchange rate
changes on cash and cash
equivalents (233) 620
----------------------------------------------------------------------------
DECREASE IN CASH AND CASH
EQUIVALENTS (31,727) (13,039)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 52,401 56,224
----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 20,674 $ 43,185
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i)As at March 31, 2015, $14,208 (December 31, 2014 - $13,372) of purchases
of property, plant and equipment remain unpaid.
See accompanying notes to the interim condensed consolidated financial
statements.
Contacts: Martinrea International Inc. Fred Di Tosto Chief Financial Officer 3210 Langstaff Road, Vaughan, Ontario L4K 5B2 (289) 982-3001 (FAX) (416) 749-0314
Source: Martinrea International Inc.
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