Martinrea International Inc.
TSX : MRE

Martinrea International Inc.

November 07, 2013 17:31 ET

Martinrea International Inc. Releases Q3 2013 Results and Announces Dividend

TORONTO, ONTARIO--(Marketwired - Nov. 7, 2013) - 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 third quarter ended September 30, 2013.

Martinrea currently employs over 12,000 skilled and motivated people in 38 plants in Canada, the United States, Mexico, Brazil, Europe, and China. 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 third quarter ended September 30, 2013 ("MDA") dated as of November 7, 2013, the Company's unaudited interim condensed consolidated financial statements for the third quarter ended September 30, 2013 (the "unaudited consolidated financial statements") and the Company's Annual Information Form for the financial year ended December 31, 2012, can be found at www.sedar.com.

Highlights


--  Revenue increased by $70 million, or 10 per cent, for the third quarter
    of 2013, compared to the same period in 2012. Total revenue of $768
    million was a record for a third quarter. 

--  Net earnings of $21 million for the third quarter of 2013, or $0.25 per
    share, was a record for a third quarter, and an increase from the
    adjusted earnings per share of $0.17 for the third quarter of 2012. 

--  Martinrea Honsel operations continue to show improvement. 

--  Gross margin of 10.9% for the third quarter of 2013 is a significant
    improvement from the third quarter of 2012, and almost the same as for
    the second quarter of 2013 despite seasonal shutdowns. 

--  Positive outlook for future years as recently updated company budgets
    show annual revenues, profits, cash flow and earnings increasing. 

--  Awarded new incremental business since our last quarterly release,
    totalling $45 million in annualized business. 

Non-IFRS Measures

The Company prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS"). However, the Company has included certain non-IFRS financial measures and ratios in this press release that the Company believes will provide useful information in measuring the financial performance and financial condition of the Company. These measures 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 the other financial measures determined in accordance with IFRS. Non-IFRS measures referred to in the analysis include "adjusted net earnings", and "adjusted net earnings per share on a basic and diluted basis" and are defined in Tables A and B under "Adjustments to Net Income" of this press release.

REVENUE

Three months ended September 30, 2013 to three months ended June 30, 2013 comparison


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                     Three months      Three months                         
                  ended September    ended June 30,                         
                         30, 2013              2013   $ Change    % Change  
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North America    $        590,827  $        651,799    (60,972)       (9.4%)
Europe                    155,994           159,959     (3,965)       (2.5%)
Rest of World              21,040            14,516      6,524        44.9% 
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Revenue          $        767,861  $        826,274    (58,413)       (7.1%)
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The Company's consolidated revenues for the third quarter of 2013 decreased by $58.4 million or 7.1% to $767.9 million as compared to $826.3 million for the second quarter of 2013. The total overall decrease in revenues was driven by decreases in the Company's North America and Europe operating segments, partially offset by a quarter-over-quarter increase in revenues in the Rest of the World.

Revenues for the third quarter of 2013 in the Company's North America operating segment decreased by $61.0 million or 9.4% to $590.8 million from $651.8 million for the second quarter of 2013. The decrease was predominantly due to the seasonal softness in production volumes in North American light vehicle platforms and a $9.3 million decrease in tooling revenues, which are typically dependent on the timing of tooling construction and final inspection and acceptance by the customer, partially offset by a $6.7 million quarter-over-quarter benefit from the impact of foreign exchange on the translation of U.S. dollar denominated production revenue. OEM light vehicle production volumes are typically lower during the third quarter of any given year due to the summer shutdowns common to the automotive industry.

Revenues for the third quarter of 2013 in the Company's Europe operating segment, comprised predominantly of the European operations of Martinrea Honsel, decreased by $4.0 million or 2.5% to $156.0 million from $160.0 million during the second quarter of 2013. The decrease was mainly due to the seasonal softness in production volumes in European light vehicle platforms from the customer summer shutdowns common to the automotive industry and a decrease in tooling revenues of approximately $4.3 million, partially offset by a $4.6 million quarter-over-quarter benefit from the impact of foreign exchange on the translation of Euro denominated production revenue. Quarter-over-quarter production volumes in the Company's operating facilities in Germany and Spain exceeded the overall trend in OEM light vehicle production in Europe, which decreased sequentially by 16.9%, as a result of the Company's high concentration of business in Europe geared to the luxury vehicle segment reliant on export outside the Euro zone.

Revenues for the third quarter of 2013 in the Company's Rest of World operating segment, currently comprised of the Brazilian operations of Martinrea Honsel and a new facility in China in its early stages, increased by $6.5 million or 44.9% to $21.0 million from $14.5 million in the second quarter of 2013. The increase can be attributed to an increase in production volumes in Brazil, the launch of the Company's first product in China for the Ford CD4 program, which began to ramp up at the end of the second quarter, and a quarter-over-quarter increase in tooling revenues of $4.1 million. The increase in revenues in the Rest of World operating segment would have been higher had it not been for the translation of Brazilian Real denominated production revenue which had a negative impact on revenue for the quarter of $1.3 million as compared to the second quarter of 2013.

Overall tooling revenues decreased by $9.5 million from $44.5 million for the second quarter of 2013 to $35.0 million for the third quarter of 2013.

Three months ended September 30, 2013 to three months ended September 30, 2012 comparison


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                   Three months      Three months                           
                ended September   ended September                           
                       30, 2013          30, 2012     $ Change     % Change 
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North America  $        590,827  $        560,060       30,767          5.5%
Europe                  155,994           121,568       34,426         28.3%
Rest of World            21,040            15,570        5,470         35.1%
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Revenue        $        767,861  $        697,198       70,663         10.1%
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The Company's consolidated revenues for the third quarter of 2013 increased by $70.7 million or 10.1% to $767.9 million as compared to $697.2 million for the third quarter of 2012. Revenues across all operating segments increased year-over-year.

Revenues for the third quarter of 2013 in the Company's North America operating segment increased by $30.8 million or 5.5% to $590.8 million from $560.1 million for the third quarter of 2012. Revenues for North America for the third quarter were negatively impacted by an $18.5 million year-over-year decrease in tooling revenues, which are typically dependent on the timing of tooling construction and final inspection and acceptance by the customer. Excluding tooling revenues, revenues in the North America operating segment increased by $49.3 million or 9.4%. The increase was generally due to overall improved North American OEM light vehicle production, the launch of new programs during or subsequent to the third quarter of 2012, including the new GM pick-up (K2XX) and Ford Fusion (CD4) programs, among others, and an $11.6 million year-over-year benefit from the impact of foreign exchange on the translation of U.S. dollar denominated production revenue.

Revenues for the third quarter of 2013 in the Company's Europe operating segment, comprised predominantly of the European operations of Martinrea Honsel, increased by $34.4 million or 28.3% to $156.0 million from $121.6 million for the third quarter of 2012. Revenues for Europe for the third quarter were positively impacted by a $6.1 million year-over-year increase in tooling revenues, which are typically dependent on the timing of tooling construction and final inspection and acceptance by the customer. Excluding tooling revenues, revenues in the Europe operating segment increased by $28.3 million or 24.7%. The increase was due to the launch of new incremental aluminum business with Jaguar LandRover at the end of 2012, a $14.1 million benefit from the impact of foreign exchange on the translation of Euro denominated revenue, and generally higher year-over-year production volumes in Germany and Spain, which exceeded the overall trend in OEM light vehicle and engine production in Europe due to the Company's high concentration of business in Europe geared to the luxury vehicle segment reliant on export outside of the Euro zone.

Revenues for the third quarter of 2013 in the Company's Rest of World operating segment, currently comprised of the Brazilian operations of Martinrea Honsel and a start-up facility in China in its early stages, increased by $5.5 million to $21.0 million from $15.6 million in the third quarter of 2012. The increase can be attributed to the launch of the Company's first product in China for the Ford CD4 program, which began to ramp up at the end of the second quarter, and a year-over-year increase in tooling revenues of $4.0 million. The increase in revenues in the Rest of World operating segment would have been higher had it not been for the translation of Brazilian Real denominated production revenue which had a negative impact on revenue for the third quarter of $0.9 million as compared to the third quarter of 2012.

Overall tooling revenues decreased by $8.4 million from $43.4 million for the third quarter of 2012 to $35.0 million for the third quarter of 2013.

Nine months ended September 30, 2013 to nine months ended September 30, 2012 comparison


----------------------------------------------------------------------------
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                      Nine months       Nine months                         
                  ended September   ended September                         
                         30, 2013          30, 2012    $ Change    % Change 
----------------------------------------------------------------------------
North America    $      1,853,157  $      1,731,618     121,539         7.0%
Europe                    457,764           420,043      37,721         9.0%
Rest of World              52,336            43,744       8,592        19.6%
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Revenue          $      2,363,257  $      2,195,405     167,852         7.6%
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The Company's revenues for the nine months ended September 30, 2013 increased by $167.9 million or 7.6% to $2,363.3 million as compared to $2,195.4 million for the nine months ended September 30, 2012. Revenues increased year-over-year across all operating segments.

Revenues for the nine months ended September 30, 2013 in the Company's North America operating segment increased by $121.5 million or 7.0% to $1,853.2 million from $1,731.6 million for the nine months ended September 30, 2012. Revenues in North America for the nine months ended September 30, 2013 were negatively impacted by a $56.1 million year-over-year decrease in tooling revenues, which are typically dependent on the timing of tooling construction and final inspection and acceptance by the customer. Excluding tooling revenues, revenues in the North America operating segment increased by $177.6 million or 11.1%. The increase was generally due to overall improved OEM North American light vehicle production, the launch of new programs during or subsequent to 2012, including the Ford Escape and Fusion programs, among others, and a $15.6 million year-over-year benefit from the impact of foreign exchange on the translation of U.S. dollar denominated production revenue.

Revenues for the nine months ended September 30, 2013 in the Company's Europe operating segment, comprised predominately of the European operations of Martinrea Honsel, increased by $37.7 million or 9.0% to $457.8 million from $420.0 million for the nine months ended September 30, 2012. Revenues for Europe for the nine months ended September 30, 2013 were positively impacted by a $21.0 million year-over-year increase in tooling revenues, which are typically dependent on the timing of tooling construction and final inspection and acceptance by the customer. Excluding tooling revenues, revenues in the Europe operating segment increased by $16.7 million or 4.2%. The increase was generally due to a $14.1 million benefit from the impact of foreign exchange on the translation of Euro denominated production revenue, the launch of new incremental aluminum business with Jaguar LandRover at the end of 2012 and year-over-year increased production revenues in the Company's plant in Slovakia, which continues to ramp up and launch its backlog of business, partially offset by a year-over-year decline in overall OEM light and medium-heavy vehicle production in Europe.

Revenues for the nine months ended September 30, 2013 in the Company's Rest of World operating segment increased by $8.6 million or 19.6% to $52.3 million from $43.7 million for the nine months ended September 30, 2012. The increase can be attributed to an increase in production volumes in Brazil, the launch of the Company's first product in China for the Ford CD4 program, which began to ramp up at the end of the second quarter of 2013, and a year-over-year increase in tooling revenues of $6.4 million. The increase in revenues in the Rest of World operating segment would have been higher had it not been for the translation of Brazilian Real denominated production revenue which had a negative impact on revenue for the nine months ended September 30, 2013 of $3.4 million as compared to the nine months ended September 30, 2012.

Overall tooling revenues decreased by $28.7 million from $158.8 million for the nine months ended September 30, 2012 to $130.1 million for the nine months ended September 30, 2013.

GROSS MARGIN

Three months ended September 30, 2013 to three months ended June 30, 2013 comparison


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                    Three months      Three months                          
                 ended September    ended June 30,                          
                        30, 2013              2013    $ Change    % Change  
----------------------------------------------------------------------------
Gross margin    $         83,663   $        91,183      (7,520)       (8.2%)
% of revenue                10.9%             11.0%                         
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Gross margin percentage for the third quarter of 2013 remained relatively consistent quarter-over-quarter at 10.9% for the third quarter of 2013, compared to 11.0% for the second quarter of 2013. OEM light vehicle production volumes are typically lower during the summer months due to the July and August shutdowns common to the automotive industry generally resulting in lower absorption of overhead costs and corresponding margins during the third quarter of any given year. The impact of the lower production volumes on the Company's 2013 third quarter gross margin percentage was offset by ongoing productivity and efficiency improvements at various facilities across all of the Company's operating segments. Operational inefficiencies and program specific launch costs (related to certain upcoming new programs set to launch and ramp up over the next few months including the BMW X5, Ford Transit, Ford 2.3L aluminum engine block, Chrysler 200, the Lincoln version of the Ford Escape, GM CTS and changes to the GM Malibu platform) impacted the gross margin for the quarter; and will do so for the remainder of 2013; however, they are expected to subside over time. Progress continues to be made in improving efficiencies and in the reduction of manufacturing costs.

The Company's gross margin percentage for the third quarter of 2013 also continued to be positively impacted by new program launches, including the recently launched new GM pick-up (K2XX) program. Gross margin is expected to continue to be positively impacted by incremental new business as the Company continues to work through the launch of a significant backlog of business over the next 36 months including the following awarded programs in addition to the programs referred to above: the next wave of Ford CD4 in Europe and North America, GM Omega aluminum engine cradle, GM 31XX (small pick-up), GM E2XX (Malibu) Jaguar LandRover aluminum swivel bearing, Nissan aluminum I4 engine block, Daimler aluminum transmission casing, incremental machining business on Chrysler's Pentastar aluminum engine block and engine cradle for the VW Golf.

Three months ended September 30, 2013 to three months ended September 30, 2012 comparison


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                   Three months       Three months                          
                ended September    ended September                          
                       30, 2013           30, 2012     $ Change    % Change 
----------------------------------------------------------------------------
Gross margin   $         83,663   $         58,883       24,780        42.1%
% of revenue               10.9%               8.4%                         
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The gross margin percentage for the third quarter of 2013 of 10.9% increased as a percentage of revenue by 2.5% as compared to the gross margin percentage for the third quarter of 2012 of 8.4%. Excluding the unusual and other items recorded as cost of sales in Table A under "Adjustments to Net Income", which included the impact of a major equipment failure at one of the Company's facilities in the U.S. in 2012, gross margin percentage for the third quarter of 2013 increased as a percentage of revenue by 1.9% to 10.9% from 9.0% for the third quarter of 2012.

The increase in gross margin as a percentage of revenue was generally due to:


--  higher capacity utilization from an overall increase in year-over-year
    production revenues including the launch of new programs during or
    subsequent to the third quarter of 2012; 
--  productivity and efficiency improvements at certain operating
    facilities, including cost savings from the workforce reductions in
    Germany completed at the end of 2012; 
--  a decrease in tooling revenues which typically earn low or no margins
    for the Company; and 
--  a decrease in launch and other launch-related operational expenses
    stemming from the significant ramp up of new program launches during the
    second half of 2012. 

These factors were partially offset by:


--  an increase in integrator or assembly work which typically generates
    lower margins as a percentage of revenue, although return on capital
    tends to be higher; 
--  operational inefficiencies at certain operating facilities; and 
--  program specific launch costs related to new programs set to launch and
    ramp up over the next few months including the BMW X5, Ford Transit,
    Ford 2.3L aluminum engine block, Chrysler 200, the Lincoln version of
    the Ford Escape, GM CTS and changes to the GM Malibu platform. 

Nine months ended September 30, 2013 to nine months ended September 30, 2012 comparison


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                      Nine months        Nine months                        
                  ended September    ended September                        
                         30, 2013           30, 2012    $ Change   % Change 
----------------------------------------------------------------------------
Gross margin     $        250,561   $        215,259      35,302       16.4%
% of revenue                 10.6%               9.8%                       
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Gross margin percentage for the nine months ended September 30, 2013 of 10.6% increased as a percentage of revenue by 0.8% as compared to 9.8% for the nine months ended September 30, 2012. Excluding the unusual and other items recorded as cost of sales during the nine months ended September 30, 2012 in Table B under "Adjustments to Net Income", which included the impact of a major equipment failure at one of the Company's facilities in the U.S. in 2012, gross margin percentage for the nine months ended September 30, 2013 increased as a percentage of revenue by 0.4% to 10.6% from 10.2% for the nine months ended September 30, 2012.

The increase in adjusted gross margin as a percentage of revenue was generally due to:


--  higher capacity utilization from an overall increase in year-over-year
    production revenues including the launch of new programs during or
    subsequent to 2012; 
--  productivity and efficiency improvements at certain operating
    facilities, including cost savings from the workforce reductions in
    Germany completed at the end of 2012; 
--  a decrease in tooling revenues which typically earn low or no margins
    for the Company; and 
--  a decrease in launch and other launch-related operational expenses
    stemming from the significant ramp up of new program launches during the
    second half of 2012. 

These factors were partially offset by:


--  an increase in integrator or assembly work which typically generates
    lower margins as a percentage of revenue, although return on capital
    tends to be higher; 
--  pre-operating costs incurred at the Company's new facility in China
    which opened during the second half of 2012; 
--  operational inefficiencies at certain operating facilities; and 
--  program specific launch costs related to new programs set to launch and
    ramp up over the next few months including the BMW X5, Ford Transit,
    Ford 2.3L aluminum engine block, Chrysler 200, the Lincoln version of
    the Ford Escape, GM CTS and changes to the GM Malibu platform. 

ADJUSTMENTS TO NET INCOME

(ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)

Adjusted net earnings excludes certain unusual and other items, as set out in the following tables and described in the notes thereto. Management uses adjusted earnings 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           
                                     September 30,  September 30,           
                                              2013           2012   (a)-(b) 
                                     -------------  --------------          
                                               (a)            (b)    Change 
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NET EARNINGS (A)                            20,973          7,980    12,993 

Add back - Unusual Items:                                                   
Employee related severance costs (1)             -          2,899    (2,899)
Other restructuring costs (1)                    -            611      (611)

Add back - Other Items:                                                     
Impact of a major equipment failure                                         
 at an operating facility in the U.S.                                       
 (recorded as Cost of Sales) (3)                 -          3,950    (3,950)

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TOTAL UNUSUAL AND OTHER ITEMS BEFORE                                        
 TAX                                             -          7,460    (7,460)
Tax impact of above items                        -           (820)      820 
Non-controlling interest on above                                           
 items, after tax                                -           (837)      837 

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TOTAL UNUSUAL AND OTHER ITEMS AFTER                                         
 TAX (B)                                         -          5,803    (5,803)

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ADJUSTED NET EARNINGS (A + B)               20,973         13,783     7,190 
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Number of Shares Outstanding - Basic                                        
 ('000)                                     84,091         82,991           
Adjusted Basic Net Earnings Per Share         0.25           0.17           
Number of Shares Outstanding -                                              
 Diluted ('000)                             85,250         83,431           
Adjusted Diluted Net Earnings Per                                           
 Share                                        0.25           0.17           

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TABLE B                                                                     

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                                      For the nine   For the nine           
                                      months ended   months ended           
                                     September 30,  September 30,           
                                              2013           2012     (a-b) 
                                     -------------  --------------          
                                               (a)            (b)    Change 
----------------------------------------------------------------------------

NET EARNINGS (A)                            68,375         45,407    22,968 

Add back - Unusual Items:                                                   
Employee related severance costs (1)             -          4,799    (4,799)
Other restructuring costs (1)                    -          3,342    (3,342)

Add back - Other Items:                                                     
Executive separation agreement                                              
 (recorded in SG&A) (2)                          -          5,177    (5,177)
Impact of a major equipment failure                                         
 at an operating facility in the U.S.                                       
 (recorded as Cost of Sales) (3)                 -          8,453    (8,453)
Transaction and integration costs                                           
 associated with the Honsel                                                 
 acquisition (recorded as SG&A) (4)              -            581      (581)

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TOTAL UNUSUAL AND OTHER ITEMS BEFORE                                        
 TAX                                             -         22,352   (22,352)
Tax impact of above items                        -         (3,715)    3,715 
Non-controlling interest in above                                           
 items, after tax                                -         (1,474)    1,474 

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TOTAL UNUSUAL AND OTHER ITEMS AFTER                                         
 TAX (B)                                         -         17,163   (17,163)
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ADJUSTED NET EARNINGS (A + B)               68,375         62,570     5,805 
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Number of Shares Outstanding - Basic                                        
 ('000)                                     83,977         82,927           
Adjusted Basic Net Earnings Per Share         0.81           0.75           
Number of Shares Outstanding -                                              
 Diluted ('000)                             84,841         83,597           
Adjusted Diluted Net Earnings Per                                           
 Share                                        0.81           0.75           

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(1) Employee related severance and other restructuring costs

As part of the acquisition of Honsel, a certain level of restructuring was planned in order to be cost competitive over the long term, in particular at the Company's German facilities in Meschede and Soest. The restructuring efforts commenced immediately after the closing of the acquisition on July 29, 2011. In connection with these restructuring activities, $2.5 million of employee related severance was recognized during the nine months ended September 30, 2012, of which $1.7 million was recognized during the third quarter of 2012. No such restructuring costs were incurred during the nine months ended September 30, 2013. However, additional employee related severance associated with the Martinrea Honsel operations may be incurred during the remainder of 2013 and 2014.

In addition, during the fourth quarter of 2011, the Company began the process of closing one of its small operating facilities in Mexico. The existing business and equipment of this facility was moved to other Company facilities in Mexico including a new facility the Company opened in Silao, Mexico in 2011. Restructuring costs relating to this closure amounted to $3.5 million for the nine months ended September 30, 2012, of which $0.6 million was incurred in the third quarter of 2012, consisting primarily of employee related severance and the dismantling and transporting of PP&E between Company facilities. The closure of this facility was completed during the fourth quarter of 2012. As such, no further costs related to this closure are expected to be incurred.

Costs associated with other restructuring activities incurred during the nine months ended September 30, 2012 totaled $2.1 million, of which $1.2 million was incurred in the third quarter of 2012, consisting of employee related severance relating to the right sizing of certain other manufacturing facilities.

(2) Executive separation agreement

On June 29, 2012, the Company announced that Nat Rea stepped down as Vice Chairman and Director of Martinrea, as of such date, to pursue other opportunities. As part of the separation agreement and based on the terms of his employment contract, the Company paid Mr. Rea $5.2 million which was expensed during the second quarter of 2012 and included in SG&A expense.

(3) Impact of a major equipment failure at an operating facility in the U.S.

During the month of June 2012, a press in one of the Company's U.S. operating facilities experienced a significant failure and was not operational for approximately 23 days. As a consequence and due to the lack of press capacity at the facility, approximately thirty dies were outsourced to external stamping companies which resulted in the following incremental costs:


--  external stamping fees; 
--  transportation costs to move the dies to the external stamping companies
    and stamped parts back to the Martinrea operating facility for assembly;
--  additional manpower to ensure the quality of parts stamped by external
    suppliers; 
--  sorting and rework costs; and 
--  dedicated external contractor support to get the press operational
    again. 

These incremental costs, which totaled $4.5 million for the second quarter of 2012 and $4.0 million for the third quarter of 2012, were non-recurring in nature and had a significant impact on the performance of the facility during the months of June, July and part of August 2012.

(4) Transaction costs associated with the acquisition of Honsel

On July 29, 2011, the Company closed the purchase of the operations of Honsel to form the Martinrea Honsel Group. Martinrea joined with Anchorage in the transaction and, consequently, owns 55% of the Martinrea Honsel Group with Anchorage owning the remaining 45%. The Company expensed $0.6 million in transaction and integration costs related to the acquisition during the first quarter of 2012.

NET EARNINGS

(ATTIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)

Three months ended September 30, 2013 to three months ended June 30, 2013 comparison


----------------------------------------------------------------------------
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                      Three months       Three months                       
                   ended September     ended June 30,                       
                          30, 2013               2013  $ Change   % Change  
----------------------------------------------------------------------------
Net earnings      $         20,973   $         27,514    (6,541)     (23.8%)
Adjusted net                                                                
 earnings         $         20,973   $         27,514    (6,541)     (23.8%)
Earnings per                                                                
 common share                                                               
  Basic           $           0.25   $           0.33                       
  Diluted         $           0.25   $           0.33                       
Adjusted earnings                                                           
 per common share                                                           
  Basic           $           0.25   $           0.33                       
  Diluted         $           0.25   $           0.33                       
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----------------------------------------------------------------------------

Net earnings for the third quarter of 2013 decreased to $21.0 million or $0.25 per share, on a basic and diluted basis, from $27.5 million or $0.33 per share, on a basic and diluted basis, for the second quarter of 2013. There were no unusual or other items incurred during the first nine months of 2013.

The quarter-over-quarter decrease in net earnings was predominantly attributed to the seasonal softness in OEM light vehicle production volumes during the summer months. Overall OEM light vehicle production volumes are typically lower during the third quarter of any given year due to July and August shutdowns common to the automotive industry. The impact of the lower production volumes on the Company's third quarter earnings was offset by ongoing productivity and efficiency improvements at various facilities across all of the Company's operating segments, including Martinrea Honsel. The contribution of Martinrea Honsel to net earnings increased from $0.06 per share in the second quarter of 2013 to $0.07 per share in the third quarter of 2013. The Company continues to focus on improving the productivity and efficiency of the Martinrea Honsel German operations to make it cost competitive for future growth.

Operational inefficiencies and program specific launch costs (related to certain upcoming new programs set to launch and ramp up over the next few months including the BMW X5, Ford Transit, Ford 2.3L aluminum engine block, Chrysler 200, the Lincoln version of the Ford Escape, GM CTS and changes to the GM Malibu platform) impacted the earnings for the quarter; and will do so for the remainder of 2013; however, they are expected to subside over time. Progress continues to be made in improving efficiencies and in the reduction of manufacturing costs.

Three months ended September 30, 2013 to three months ended September 30, 2012 comparison



----------------------------------------------------------------------------
----------------------------------------------------------------------------
                       Three months       Three months                      
                    ended September    ended September                      
                           30, 2013           30, 2012   $ Change  % Change 
----------------------------------------------------------------------------
Net earnings       $         20,973   $          7,980     12,993     162.8%
Adjusted net                                                                
 earnings          $         20,973   $         13,783      7,190      52.2%
Earnings per                                                                
 common share                                                               
 Basic             $           0.25   $           0.10                      
 Diluted           $           0.25   $           0.10                      
Adjusted                                                                    
 earnings per                                                               
 common share                                                               
 Basic             $           0.25   $           0.17                      
 Diluted           $           0.25   $           0.17                      
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----------------------------------------------------------------------------

Net earnings for the third quarter of 2013 of $21.0 million increased by $13.0 million from $8.0 million for the third quarter of 2012, before adjustments. Excluding unusual and other items incurred during the third quarter of 2012 as explained in Table A under "Adjustments to Net Income", the net earnings for the third quarter of 2013 increased to $21.0 million or $0.25 per share, on a basic and diluted basis, in comparison to adjusted net earnings of $13.8 million or $0.17 per share, on a basic and diluted basis, for the third quarter of 2012.

Net earnings for the third quarter of 2013, as compared to adjusted net earnings for the third quarter of 2012, were positively impacted by the following:


--  an overall increase in year-over-year production revenues including the
    launch of new programs during or subsequent to the third quarter of
    2012; 
--  productivity and efficiency improvements at certain operating
    facilities, including cost savings from the workforce reductions in
    Germany completed at the end of 2012; and 
--  a decrease in launch and other launch-related operational expenses
    stemming from the significant ramp up of new program launches during the
    second half of 2012. 

These factors were partially offset by:


--  operational inefficiencies at certain operating facilities; 
--  program specific launch costs (related to certain upcoming new programs
    set to launch and ramp up over the next few months); and 
--  year-over-year increases in SG&A and depreciation expense. 

The contribution of Martinrea Honsel to net earnings for the third quarter of 2013 increased to $0.07 per share from $0.02 per share in the third quarter of 2012 due mainly to the addition of new incremental aluminum business with Jaguar LandRover, generally higher production volumes in Europe and ongoing productivity and efficiency improvements at certain facilities, in particular in Germany.

Nine months ended September 30, 2013 to nine months ended September 30, 2012 comparison


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                        Nine months       Nine months                       
                    ended September   ended September                       
                           30, 2013          30, 2012   $ Change   % Change 
----------------------------------------------------------------------------
Net Earnings       $         68,375  $         45,407     22,968       50.6%
Adjusted net                                                                
 earnings          $         68,375  $         62,570      5,805        9.3%
Earnings per                                                                
 common share                                                               
  Basic            $           0.81  $           0.55                       
  Diluted          $           0.81  $           0.54                       
Adjusted earnings                                                           
 per common share                                                           
  Basic            $           0.81  $           0.75                       
  Diluted          $           0.81  $           0.75                       
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net earnings for the nine months ended September 30, 2013 of $68.4 million increased by $23.0 million from $45.4 million for the nine months ended September 30, 2012, before adjustments. Excluding unusual and other items incurred during 2012 as explained in Table B under "Adjustments to Net Income", the net earnings for the nine months ended September 30, 2013 increased to $68.4 million or $0.81 per share, on a basic basis and diluted basis, in comparison to adjusted net earnings of $62.6 million or $0.75 per share, on a basic basis and diluted basis, for the nine months ended September 30, 2012.

Net earnings for the nine months ended September 30, 2013, as compared to adjusted net earnings for the nine months ended September 30, 2012, were positively impacted by the following:


--  an overall increase in year-over-year production revenues including the
    launch of new programs during or subsequent to 2012; 
--  productivity and efficiency improvements at certain operating
    facilities, including cost savings from the workforce reductions in
    Germany completed at the end of 2012; and 
--  a decrease in launch and other launch-related operational expenses
    stemming from the significant ramp up of new program launches during the
    second half of 2012. 

These factors were partially offset by:


--  operational inefficiencies at certain operating facilities; 
--  program specific launch costs (related to certain upcoming new programs
    set to launch and ramp up over the next few months); 
--  pre-operating costs incurred at the Company's new facility in China
    which opened during the second half of 2012; and 
--  year-over-year increases in SG&A expense, depreciation expense and
    interest expense on higher debt levels. 

The contribution of Martinrea Honsel to net earnings for the nine months ended September 30, 2013 increased to $0.17 per share from $0.07 per share for the nine months ended September 30, 2012 due mainly to the addition of new incremental aluminum business with Jaguar LandRover, generally higher production volumes and ongoing productivity and efficiency improvements at certain facilities, in particular in Germany.

CAPITAL EXPENDITURES

Three months ended September 30, 2013 to three months ended June 30, 2013 comparison


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                      Three months       Three months                       
                   ended September     ended June 30,                       
                          30, 2013               2013   $ Change   % Change 
----------------------------------------------------------------------------
Capital                                                                     
 Expenditures     $         46,023   $         39,791      6,232       15.7%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Capital expenditures increased by $6.2 million to $46.0 million in the third quarter of 2013 from $39.8 million in the second quarter of 2013. Capital expenditures incurred in the third quarter of 2013 relate mainly to the purchase of new program equipment for newly awarded business currently ramping up and scheduled to launch over the next 24 months.

Three months ended September 30, 2013 to three months ended September 30, 2012 comparison


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                      Three months       Three months                       
                   ended September    ended September                       
                          30, 2013           30, 2012  $ Change   % Change  
----------------------------------------------------------------------------
Capital                                                                     
 Expenditures     $         46,023   $         54,504    (8,481)     (15.6%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Capital expenditures decreased by $8.5 million to $46.0 million in the third quarter of 2013 from $54.5 million in the third quarter of 2012. 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 third quarter of 2013 was for manufacturing equipment for programs launching over the next 24 months.

Nine months ended September 30, 2013 to nine months ended September 30, 2012 comparison


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                       Nine months        Nine months                       
                   ended September    ended September                       
                          30, 2013           30, 2012   $ Change   % Change 
----------------------------------------------------------------------------
Capital                                                                     
 Expenditures     $        142,519   $        141,802        717        0.5%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Capital expenditures remained relatively consistent year-over-year at $142.5 million for the nine months ended September 30, 2013, compared to $141.8 million for the nine months ended September 30, 2012.

Nick Orlando, Martinrea's President and Chief Executive Officer, stated: "We are pleased with the third quarter results. Our third quarter showed record revenues and earnings for the quarter, which are an indication of the continuing improvements in our operations in North America and elsewhere. Both Martinrea Classic and Martinrea Honsel operations posted better results than last year. The results from Europe are encouraging despite the economic slowdown in Europe, as our cost cutting efforts and increasing efficiencies continue to take hold. We continue to focus on operational improvements at all of our plants, everywhere, not just those that experienced significant launch activity in the last year, and that continued focus is working for us. We now have 38 plants, including our first plant in China, and we aim to make each one better over time. We continue to quote new and replacement business. We have won some new incremental business since our last quarterly release, totalling $30 million in annualized business, as follows: $10 million in fuel filler business from GM on its K2XX platform launching in 2014, $10 million of fluid management product for GM on its Alpha platform launching in 2015 and another $10 million in fluid management product on GM's 6.6L DMAX engine launching in 2016. Since quarter end, Chrysler has awarded us additional machining business on the Pentastar engine block commencing in late 2015, resulting in approximately $15 million in incremental annual revenues."

Fred Di Tosto, Martinrea's Chief Financial Officer, stated: "Revenues for our third quarter, excluding $35 million in tooling revenues, were approximately $733 million, within our quarterly sales guidance previously provided, and record third quarter revenues for us. In the third quarter of 2013, our earnings per share on a basic and diluted basis was $0.25, within our quarterly earnings guidance, and a nice improvement from the $0.17 in adjusted earnings per share generated in the third quarter of 2012. We are again pleased to announce that we did not have any unusual or other items to report in the third quarter. Our Martinrea Honsel operations contributed $0.07 per share to our third quarter earnings, an increase over the second quarter of 2013, where the operations generated $0.06 in earnings per share, and third quarter of 2012, where the operations generated $0.02 in earnings per share, and this despite the continuing softness in overall European volumes. A number of the efficiencies we have made in Europe, especially in workforce adjustments and cost cutting measures in Germany, continue to take hold. We saw gross margin for the third quarter as a percentage of revenue of 10.9%, much improved from last year and almost the same as in the second quarter, despite the July and August shutdowns common to the automotive industry. We expect gross margin to continue to improve over time as we improve efficiencies and reduce manufacturing costs."

Rob Wildeboer, Martinrea's Executive Chairman, stated: "The 2013 financial year has been very good so far, and we believe it will be a record year for revenues and earnings for us. Our fourth quarter is expected to generate revenues for the quarter (excluding tooling revenues) in the range of $720 to $770 million, and we believe our earnings per share will be in the range of 23 to 28 cents per share, likely a record fourth quarter for us from an earnings perspective. The ranges we are using are slightly broader than normal as there is some uncertainty about December volumes because of customer plant closure schedules as customers adjust inventories and plan for the holiday season. As a company we remain focused on growing shareholder value over time, by making good decisions to grow our business profitably and prudently over the long term. We have just completed our three-year budget review process for Martinrea Honsel and Martinrea Classic, and our budgets for the next three years have been approved by our board, and will be provided to our lenders as always. These budgets are of course not completely definitive and are subject to market forces as well as the type of issues any automotive supplier faces. But they do illustrate for us what the future looks like. It is clear to us that, based on our budget assumptions, we believe that the trendline on revenues, profits, cash flow and earnings per share continues to be positive. Just as 2012 was a record year for us, and as we have stated 2013 will be a record year, we believe the same will occur going forward. Specifically, 2014 should be a record year, and 2015 should be better than that. And, while 2016 is still some years away and we still have the opportunity to add work there, that should be a record year too."

Dividend

A cash dividend of $0.03 per share has been declared by the board of directors payable to shareholders of record on December 31, 2013 on or about January 15, 2014.

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 Company's expectations as to revenue, gross margin percentage and earnings per share and earnings and revenue guidance, including for the fourth quarter, 2013 and the years 2014, 2015 and 2016, the expectation as to absence of unusual items, statements as to the growth of the Company, the pursuit of its strategies and the opportunity to increase volumes and sales, statements as to the payment of dividends, the launching of new metal forming and fluid systems programs including expectations as to the financial impact of launches and new business awards, statements as to the progress of operational improvements and the continuation of operational efficiencies, statements regarding the continuation of monitoring, managing and rationalization of expenses and reduction of costs, the Company's views on the long term outlook of the automotive industry, statements as to 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.

A conference call to discuss those results will be held on Friday, November 8, 2013 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 - 4555837#). The rebroadcast will be available until November 22, 2013.

The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol "MRE".


Martinrea International Inc.                                                
Condensed Consolidated Balance Sheets                                       
(in thousands of Canadian dollars) (unaudited)                              


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                               September 30,   December 31, 
                                         Note           2013           2012 
----------------------------------------------------------------------------
ASSETS                                                                      
Cash and cash equivalents                     $       16,632 $       29,422 
Trade and other receivables                 4        562,024        438,091 
Inventories                                 5        344,439        299,179 
Prepaid expenses and deposits                         12,945         12,951 
Income taxes recoverable                               3,349          4,203 
Current portion of promissory note                     2,469          2,378 
----------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                 941,858        786,224 
----------------------------------------------------------------------------
Property, plant and equipment               6        815,034        727,250 
Deferred income tax assets                           102,727         96,801 
Intangible assets                           7         61,977         56,244 
----------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS                             979,738        880,295 
----------------------------------------------------------------------------
TOTAL ASSETS                                  $    1,921,596 $    1,666,519 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES                                                                 
Trade and other payables                    8 $      594,589 $      496,110 
Provisions                                  9         11,752         28,130 
Income taxes payable                                  17,466         10,185 
Current portion of long-term debt          10         29,005         26,389 
----------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                            652,812        560,814 
----------------------------------------------------------------------------
Long-term debt                             10        412,243        357,775 
Pension and other post-retirement                                           
 benefits                                             45,841         64,779 
Deferred income tax liabilities                       65,966         57,642 
Provisions                                  9            318            849 
Other financial liability                   3        132,181         87,100 
----------------------------------------------------------------------------
TOTAL NON-CURRENT LIABILITIES                        656,549        568,145 
----------------------------------------------------------------------------
TOTAL LIABILITIES                             $    1,309,361 $    1,128,959 
----------------------------------------------------------------------------

EQUITY                                                                      
Capital stock                              12        689,345        675,606 
Contributed surplus                                   44,672         46,897 
Other equity                                3       (132,181)       (87,100)
Accumulated other comprehensive income                                      
 (loss)                                                5,734        (22,001)
Accumulated deficit                                  (70,811)      (142,082)
----------------------------------------------------------------------------
TOTAL EQUITY ATTRIBUTABLE TO EQUITY                                         
 HOLDERS OF THE COMPANY                              536,759        471,320 
Non-controlling interest                              75,476         66,240 
----------------------------------------------------------------------------
TOTAL EQUITY                                         612,235        537,560 
----------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY                  $    1,921,596 $    1,666,519 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the interim condensed consolidated financial      
 statements.                                                                

On behalf of the Board:

"Robert Wildeboer" Director

"Suleiman Rashid" Director


Martinrea International Inc.                                                
Condensed Consolidated Statements of Operations                             
(in thousands of Canadian dollars, except per share amounts) (unaudited)    


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                  Three       Three        Nine        Nine 
                                 months      months      months      months 
                                  ended       ended       ended       ended 
                              September   September   September   September 
                       Note    30, 2013    30, 2012    30, 2013    30, 2012 
----------------------------------------------------------------------------

----------------------------------------------------------------------------
SALES                       $   767,861 $   697,198 $ 2,363,257 $ 2,195,405 
----------------------------------------------------------------------------

Cost of sales                                                               
 (excluding                                                                 
 depreciation of                                                            
 property, plant and                                                        
 equipment)                    (661,222)   (622,159) (2,045,903) (1,933,023)
Depreciation of                                                             
 property, plant and                                                        
 equipment (production)         (22,976)    (16,156)    (66,793)    (47,123)
----------------------------------------------------------------------------
Total cost of sales            (684,198)   (638,315) (2,112,696) (1,980,146)
----------------------------------------------------------------------------
GROSS MARGIN                     83,663      58,883     250,561     215,259 
----------------------------------------------------------------------------

Research and                                                                
 development costs               (2,987)     (3,056)    (10,722)    (10,191)
Selling, general and                                                        
 administrative                 (38,976)    (33,940)   (112,550)   (108,131)
Depreciation of                                                             
 property, plant and                                                        
 equipment (non-                                                            
 production)                     (1,593)     (1,511)     (4,740)     (3,929)
Amortization of                                                             
 customer contracts and                                                     
 relationships                     (496)     (1,431)     (1,475)     (4,558)
Restructuring costs      14           -      (3,510)          -      (8,141)
Gain (loss) on disposal                                                     
 of property, plant and                                                     
 equipment                          (37)        994         115       1,065 
----------------------------------------------------------------------------
OPERATING INCOME                 39,574      16,429     121,189      81,374 
----------------------------------------------------------------------------

Finance costs                    (4,811)     (4,507)    (14,686)    (12,526)
Other finance income                                                        
 and expenses                      (220)        (44)        959         479 
----------------------------------------------------------------------------
INCOME BEFORE INCOME                                                        
 TAXES                           34,543      11,878     107,462      69,327 

Income tax expense       11      (8,156)     (2,861)    (25,459)    (17,009)
----------------------------------------------------------------------------
NET INCOME FOR THE                                                          
 PERIOD                     $    26,387 $     9,017 $    82,003 $    52,318 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Non-controlling                                                             
 interest                        (5,414)     (1,037)    (13,628)     (6,911)
----------------------------------------------------------------------------
NET INCOME ATTRIBUTABLE                                                     
 TO EQUITY HOLDERS OF                                                       
 THE COMPANY                $    20,973 $     7,980 $    68,375 $    45,407 
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic earnings per                                                          
 share                   13 $      0.25 $      0.10 $      0.81 $      0.55 
Diluted earnings per                                                        
 share                   13 $      0.25 $      0.10 $      0.81 $      0.54 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the interim condensed consolidated financial      
 statements.                                                                


Martinrea International Inc.                                                
Condensed Consolidated Statements of Comprehensive Income                   
(in thousands of Canadian dollars) (unaudited)                              


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Three       Three        Nine         Nine 
                                months      months      months       months 
                                 ended       ended       ended        ended 
                             September   September   September    September 
                              30, 2013    30, 2012    30, 2013     30, 2012 
----------------------------------------------------------------------------

NET INCOME FOR THE PERIOD  $    26,387 $     9,017 $    82,003  $    52,318 
Other comprehensive income                                                  
 (loss), net of tax:                                                        
 Items that may be                                                          
  reclassified to net                                                       
  income                                                                    
 Foreign currency                                                           
  translation differences                                                   
  for foreign operations       (11,363)    (23,058)     25,271      (25,986)
 Items that will not be                                                     
  reclassified to net                                                       
  income                                                                    
 Defined benefit plan                                                       
  actuarial gains (losses)       5,303      (1,077)     10,831       (6,083)
----------------------------------------------------------------------------
Other comprehensive income                                                  
 (loss), net of tax             (6,060)    (24,135)     36,102      (32,069)
----------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME                                                  
 FOR THE PERIOD            $    20,327 $   (15,118)$   118,105  $    20,249 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Attributable to:                                                            
 Equity holders of the                                                      
  Company                  $    16,188 $   (14,951)$   106,941  $    13,669 
 Non-controlling interest        4,139        (167)     11,164        6,580 
----------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME                                                  
 FOR THE PERIOD            $    20,327 $   (15,118)$   118,105  $    20,249 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the interim condensed consolidated financial      
 statements.                                                                


Martinrea International Inc.                                                
Condensed Consolidated Statements of Changes in Equity                      
(in thousands of Canadian dollars) (unaudited)                              
----------------------------------------------------------------------------
----------------------------------------------------------------------------
            Equity attributable to equity holders of the Company            

                                Notes                                       
                           receivable                            Cumulative 
                     Share  for share  Contributed       Other  translation 
                   capital    capital      surplus      equity      account 
----------------------------------------------------------------------------
Balance at                                                                  
 December 31,                                                               
 2011            $ 674,568 $     (602) $    44,165  $  (71,236) $    (8,330)
----------------------------------------------------------------------------

Net income for                                                              
 the period              -          -            -           -            - 
Compensation                                                                
 expense related                                                            
 to stock options        -          -        2,450           -            - 
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                -          -            -      (8,424)           - 
Repayment of                                                                
 notes receivable        -        602            -           -            - 
Exercise of                                                                 
 employee stock                                                             
 options             1,038          -         (275)          -            - 
 Actuarial losses                                                           
  from defined                                                              
  benefit plans          -          -            -           -            - 
 Foreign currency                                                           
  translation                                                               
  differences            -          -            -           -      (25,655)
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2012              675,606          -       46,340     (79,660)     (33,985)
----------------------------------------------------------------------------

Net loss for the                                                            
 period                  -          -            -           -            - 
Compensation                                                                
 expense related                                                            
 to stock options        -          -          557           -            - 
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                -          -            -      (7,440)           - 
 Actuarial losses                                                           
  from defined                                                              
  benefit plans          -          -            -           -            - 
 Foreign currency                                                           
  translation                                                               
  differences            -          -            -           -       11,984 
----------------------------------------------------------------------------
Balance at                                                                  
 December 31,                                                               
 2012              675,606          -       46,897     (87,100)     (22,001)
----------------------------------------------------------------------------

Net income for                                                              
 the period              -          -            -           -            - 
Compensation                                                                
 expense related                                                            
 to stock options        -          -        1,259           -            - 
Purchase of non-                                                            
 controlling                                                                
 interest                -          -            -           -            - 
Dividends                -          -            -           -            - 
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                -          -            -     (45,081)           - 
Exercise of                                                                 
 employee stock                                                             
 options            13,739          -       (3,484)          -            - 
 Actuarial gains                                                            
  from defined                                                              
  benefit plans          -          -            -           -            - 
 Foreign currency                                                           
  translation                                                               
  differences            -          -            -           -       27,735 
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2013            $ 689,345 $        -  $    44,672  $ (132,181) $     5,734 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
            Equity attributable to equity holders of the Company            


                                                         Non-               
                    Accumulated                   controlling         Total 
                        deficit         Total        interest        equity 
----------------------------------------------------------------------------
Balance at                                                                  
 December 31,                                                               
 2011            $     (169,006) $    469,559  $       72,639  $    542,198 
----------------------------------------------------------------------------

Net income for                                                              
 the period              45,407        45,407           6,911        52,318 
Compensation                                                                
 expense related                                                            
 to stock options             -         2,450               -         2,450 
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                     -        (8,424)              -        (8,424)
Repayment of                                                                
 notes receivable             -           602               -           602 
Exercise of                                                                 
 employee stock                                                             
 options                      -           763               -           763 
 Actuarial losses                                                           
  from defined                                                              
  benefit plans          (6,083)       (6,083)              -        (6,083)
 Foreign currency                                                           
  translation                                                               
  differences                 -       (25,655)           (331)      (25,986)
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2012                  (129,682)      478,619          79,219       557,838 
----------------------------------------------------------------------------

Net loss for the                                                            
 period                  (6,625)       (6,625)        (11,831)      (18,456)
Compensation                                                                
 expense related                                                            
 to stock options             -           557               -           557 
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                     -        (7,440)              -        (7,440)
 Actuarial losses                                                           
  from defined                                                              
  benefit plans          (5,775)       (5,775)              -        (5,775)
 Foreign currency                                                           
  translation                                                               
  differences                 -        11,984          (1,148)       10,836 
----------------------------------------------------------------------------
Balance at                                                                  
 December 31,                                                               
 2012                  (142,082)      471,320          66,240       537,560 
----------------------------------------------------------------------------

Net income for                                                              
 the period              68,375        68,375          13,628        82,003 
Compensation                                                                
 expense related                                                            
 to stock options             -         1,259               -         1,259 
Purchase of non-                                                            
 controlling                                                                
 interest                (2,880)       (2,880)         (1,928)       (4,808)
Dividends                (5,055)       (5,055)              -        (5,055)
Change in fair                                                              
 value of put                                                               
 option granted                                                             
 to non-                                                                    
 controlling                                                                
 interest                     -       (45,081)              -       (45,081)
Exercise of                                                                 
 employee stock                                                             
 options                      -        10,255               -        10,255 
 Actuarial gains                                                            
  from defined                                                              
  benefit plans          10,831        10,831               -        10,831 
 Foreign currency                                                           
  translation                                                               
  differences                 -        27,735          (2,464)       25,271 
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2013            $      (70,811) $    536,759  $       75,476  $    612,235 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the interim condensed consolidated financial statements.




Martinrea International Inc.                                                
Condensed Consolidated Statements of Cash Flows                             
(in thousands of Canadian dollars) (unaudited)                              


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                   Three months   Three months   Nine months    Nine months 
                          ended          ended         ended          ended 
                      September  September 30,     September  September 30, 
                       30, 2013           2012      30, 2013           2012 
----------------------------------------------------------------------------
CASH PROVIDED                                                               
 (USED) IN:                                                                 
OPERATING                                                                   
 ACTIVITIES:                                                                
Net Income for the                                                          
 period           $      26,387 $        9,017 $      82,003 $       52,318 
Adjustments for:                                                            
 Depreciation of                                                            
  property, plant                                                           
  and equipment          24,569         17,667        71,533         51,052 
 Amortization of                                                            
  customer                                                                  
  contracts and                                                             
  relationships             496          1,431         1,475          4,558 
 Amortization of                                                            
  development                                                               
  costs                   1,678            494         4,845          1,328 
 Accretion of                                                               
  interest on                                                               
  promissory note           (31)           (60)          (91)          (177)
 Unrealized losses                                                          
  / (gains) on                                                              
  foreign exchange                                                          
  forward                                                                   
  contracts                (602)           (11)          240             78 
 Finance costs            4,811          4,507        14,686         12,526 
 Income tax                                                                 
  expense                 8,156          2,861        25,459         17,009 
 Loss (gain) on                                                             
  disposal of                                                               
  property, plant                                                           
  and equipment              37           (994)         (115)        (1,065)
 Stock-based                                                                
  compensation              354            679         1,259          2,450 
 Pension and other                                                          
  post-retirement                                                           
  benefits expense        1,126            793         3,530          2,290 
 Contributions                                                              
  made to pension                                                           
  and other post-                                                           
  retirement                                                                
  benefits               (2,344)        (3,200)       (7,571)        (6,814)
----------------------------------------------------------------------------
                         64,637         33,184       197,253        135,553 
Changes in non-                                                             
 cash working                                                               
 capital items:                                                             
 Trade and other                                                            
  receivables            (9,236)        26,480      (104,363)      (106,442)
 Inventories            (28,348)       (19,719)      (33,409)       (42,222)
 Prepaid expenses                                                           
  and deposits           (1,068)           705             6           (406)
 Trade, other                                                               
  payables and                                                              
  provisions             15,148         (1,295)       56,137         93,577 
----------------------------------------------------------------------------
                         41,133         39,355       115,624         80,060 
 Interest paid           (6,753)        (4,240)      (14,743)       (11,864)
 Income taxes paid       (2,476)        (3,068)      (17,646)        (9,976)
----------------------------------------------------------------------------
NET CASH PROVIDED                                                           
 IN OPERATING                                                               
 ACTIVITIES       $      31,904 $       32,047 $      83,235 $       58,220 
----------------------------------------------------------------------------

FINANCING                                                                   
 ACTIVITIES:                                                                
 Increase in bank                                                           
  indebtedness                -          5,272             -         16,632 
 Dividends paid          (2,519)             -        (2,519)             - 
 Exercise of                                                                
  employee stock                                                            
  options                 2,630            171        10,255            763 
 Increase in long-                                                          
  term debt              18,077         30,845        74,495        105,471 
 Repayment of                                                               
  long-term debt         (7,520)        (5,384)      (22,353)       (18,091)
 Receipt of                                                                 
  payment on notes                                                          
  receivable for                                                            
  share capital               -              -             -            602 
----------------------------------------------------------------------------
NET CASH PROVIDED                                                           
 IN FINANCING                                                               
 ACTIVITIES       $      10,668 $       30,904 $      59,878 $      105,377 
----------------------------------------------------------------------------

INVESTING                                                                   
 ACTIVITIES:                                                                
 Purchase of                                                                
  property, plant                                                           
  and equipment         (46,023)       (54,504)     (142,519)      (141,802)
 Capitalized                                                                
  development                                                               
  costs                  (3,683)        (2,318)       (9,901)       (16,804)
 Proceeds on                                                                
  disposal of                                                               
  property, plant                                                           
  and equipment           1,548          2,603         3,193          2,898 
 Acquisition of                                                             
  non-controlling                                                           
  interest (note                                                            
  2)                          -              -        (4,808)             - 
----------------------------------------------------------------------------
NET CASH USED IN                                                            
 INVESTING                                                                  
 ACTIVITIES       $     (48,158)$      (54,219)$    (154,035)$     (155,708)
----------------------------------------------------------------------------

Effect of foreign                                                           
 exchange rate                                                              
 changes on cash                                                            
 and cash                                                                   
 equivalents             (1,298)        (4,211)       (1,868)        (3,130)
----------------------------------------------------------------------------

INCREASE                                                                    
 (DECREASE) IN                                                              
 CASH AND CASH                                                              
 EQUIVALENTS             (6,884)         4,521       (12,790)         4,759 
CASH AND CASH                                                               
 EQUIVALENTS,                                                               
 BEGINNING OF                                                               
 PERIOD                  23,516         26,743        29,422         26,505 
----------------------------------------------------------------------------
CASH AND CASH                                                               
 EQUIVALENTS, END                                                           
 OF PERIOD        $      16,632 $       31,264 $      16,632 $       31,264 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the interim condensed consolidated financial      
 statements.                                                                

Contact Information

  • Martinrea International Inc.
    Fred Di Tosto
    Chief Financial Officer
    (416) 749-0314
    (289) 982-3001 (FAX)