Martinrea International Inc. (TSX : MRE), a diversified and global
automotive supplier engaged in the design, development and
manufacturing of highly engineered, value-added Lightweight
Structures and Propulsion Systems, today announced the release of
its financial results for the third quarter ended September 30,
2024, and declared a quarterly cash dividend of $0.05 per share.
HIGHLIGHTS
- Third quarter total sales of
$1,237.5 million, production sales of $1,167.3 million.
- Third quarter Adjusted EBITDA(1) of
$154.1 million, 12.5% of total sales.
- Third quarter Operating Income
Margin of 5.3%; Adjusted Operating Income Margin(1) was 5.9% for
the nine months ended September 30, 2024.
- Third quarter Free Cash Flow(1)
(excluding principal payments of IFRS-16 lease liabilities) was
$57.0 million; Free Cash Flow(1) was $107.4 million for the nine
months ended September 30, 2024, a notable improvement over $75.5
million generated in the nine months ended September 30, 2023.
- Third quarter diluted net earnings
per share of $0.19 or $0.44 per share at a normalized effective tax
rate after adjusting for unusual foreign exchange movements between
the Mexican Peso against the U.S. dollar. These foreign exchange
movements are non-cash in nature, do not impact cash taxes and tend
to balance out over time (refer to “Overall Results” section for
further details).
- Net Debt-to-Adjusted EBITDA(1)
ratio, excluding the impact of IFRS 16, ended the third quarter at
1.46x.
- New business awards of
approximately $35 million in annualized sales at mature
volumes.
- Quarterly cash dividend of $0.05
per share declared.
OVERVIEW
Pat D’Eramo, Chief Executive Officer, stated:
“Our third quarter financial results were solid, and met our
internal expectations based on the lower level of industry
production volumes in the quarter. Our Free Cash Flow(1) was
strong, and our Adjusted EBITDA(1) was solid, with Adjusted EBITDA
Margin(1) up year over year. Operationally, we are executing well.
We continue to drive efficiency gains and cost savings through our
Martinrea Operating System. In addition, we continue to make good
progress in commercial negotiations with our customers, obtaining
compensation for volume shortfalls on electric vehicle programs and
lingering inflationary costs. We are experiencing some further
production volume shortfalls in the fourth quarter as OEMs adjust
inventories on a number of platforms, some of which are big
programs for us. We have been impacted by OEM production shutdowns,
often with little to no advance warning, which makes it challenging
to properly flex costs. The impact is being felt across all
powertrain types, not just electric vehicles. While this will
impact our financial performance in the fourth quarter, we expect
production volumes to improve beginning in the first quarter of
2025, as inventories adjust. Interest rates, which are coming down
in both the U.S. and Canada, with further cuts expected, should
help to improve vehicle affordability, which in turn, should lead
to higher sales for suppliers.”
He continued: “I am pleased to announce that we
have been awarded new business representing $35 million in
annualized sales at mature volumes, consisting of $30 million in
Lightweight Structures with multiple customers including
International Motors (formerly Navistar), BMW, and Nissan, and $5
million in Propulsion Systems, with Audi.”
Peter Cirulis, Chief Financial Officer, stated:
“We are pleased with our financial performance in the third
quarter. We are driving a healthy level of Free Cash Flow(1) from
the business, and our balance sheet is in great shape. Sales for
the third quarter, excluding tooling sales of $70.2 million, were
$1,167.3 million. Third quarter Adjusted EBITDA was $154.1 million,
and Adjusted EBITDA Margin of 12.5% was up 60 basis points year
over year. Free Cash Flow(1) (excluding principal payments of
IFRS-16 lease liabilities) was $57.0 million in the third quarter,
and $107.4 million on a year-to-date basis, a big improvement over
the $75.5 million generated in the comparable 2023 period, driven
in part by lower capex. On a full year basis, we project that we
will come in at the high end of our 2024 Free Cash Flow(1) outlook
range of $100 million to $150 million, excluding lease payments,
and potentially even better.”
He continued: “Net Debt(1) (excluding IFRS-16
lease liabilities) declined by approximately $32 million quarter
over quarter, to $820.1 million, reflecting the Free Cash Flow(1)
profile for the quarter. Approximately $9.5 million was spent
during the quarter, repurchasing approximately 826,000 shares
through our normal course issuer bid. Our-Net-Debt-to-Adjusted
EBITDA(1) ratio (excluding the impact of IFRS 16) ended the quarter
at 1.46x, in line with our target leverage ratio of 1.5x or
better.”
Rob Wildeboer, Executive Chairman, stated: “We
are executing well operationally and financially, and allocating
capital with a view to maximizing returns for our stakeholders. We
have previously mentioned that capital allocation would be balanced
between share buybacks and debt reduction. Both are important
priorities for us, and we have demonstrated disciplined execution
on both fronts, including during the third quarter. In the past
year and a half, since our net debt hit an all-time high of $956
million, we have paid down $136 million in debt, repurchased 6.5
million common shares, equal to 8% of shares outstanding, and
reduced our Net-Debt-to-Adjusted EBITDA(1) ratio from 1.90x to
1.46x. We believe consistent Free Cash Flow(1) generation is the
path to a higher valuation. On behalf of the executive management
team, we would like to thank our people for their hard work in
delivering a solid quarterly performance, as well as our
shareholders and other stakeholders for their continued
support.”
RESULTS OF OPERATIONS
All amounts in this press release are in
Canadian dollars, unless otherwise stated; and all tabular amounts
are in thousands of Canadian dollars, except earnings per share and
number of shares.
Additional information about the Company,
including the Company’s Management Discussion and Analysis of
Operating Results and Financial Position for the three and nine
months ended September 30, 2024 (“MD&A”), the Company’s interim
condensed consolidated financial statements for the three and nine
months ended September 30, 2024 (the “interim financial
statements”) and the Company’s Annual Information Form for the year
ended December 31, 2023 can be found at www.sedarplus.ca.
OVERALL RESULTS
Results of operations may include certain items
which have been separately disclosed, where appropriate, in order
to provide a clear assessment of the underlying Company results. In
addition to IFRS measures, management uses non-IFRS measures in the
Company’s disclosures that it believes provide the most appropriate
basis on which to evaluate the Company’s results.
The following tables set out certain highlights
of the Company’s performance for the three and nine months ended
September 30, 2024 and 2023. Refer to the Company’s interim
financial statements for the three and nine months ended September
30, 2024 for a detailed account of the Company’s performance for
the periods presented in the tables below.
|
Three months ended September 30,
2024 |
|
Three months ended September 30,
2023 |
|
$ Change |
|
% Change |
Sales |
$ |
1,237,493 |
|
|
$ |
1,378,938 |
|
|
(141,445 |
) |
|
(10.3 |
%) |
Gross Margin |
|
163,350 |
|
|
|
181,194 |
|
|
(17,844 |
) |
|
(9.8 |
%) |
Operating Income |
|
65,879 |
|
|
|
83,015 |
|
|
(17,136 |
) |
|
(20.6 |
%) |
Net
Income for the period |
|
14,157 |
|
|
|
53,744 |
|
|
(39,587 |
) |
|
(73.7 |
%) |
Net Earnings per Share - Basic and Diluted |
$ |
0.19 |
|
|
$ |
0.68 |
|
|
(0.49 |
) |
|
(72.1 |
%) |
Non-IFRS Measures** |
|
|
|
|
|
|
|
Adjusted Operating Income |
$ |
65,879 |
|
|
$ |
83,015 |
|
|
(17,136 |
) |
|
(20.6 |
%) |
% of Sales |
|
5.3 |
% |
|
|
6.0 |
% |
|
|
|
|
Adjusted EBITDA |
|
154,129 |
|
|
|
163,482 |
|
|
(9,353 |
) |
|
(5.7 |
%) |
% of Sales |
|
12.5 |
% |
|
|
11.9 |
% |
|
|
|
|
Adjusted Net Income* |
|
14,157 |
|
|
|
53,744 |
|
|
(39,587 |
) |
|
(73.7 |
%) |
Adjusted Net Earnings per Share - Basic and Diluted* |
$ |
0.19 |
|
|
$ |
0.68 |
|
|
(0.49 |
) |
|
(72.1 |
%) |
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
|
$ Change |
|
% Change |
Sales |
$ |
3,863,199 |
|
|
$ |
4,043,882 |
|
|
(180,683 |
) |
|
(4.5 |
%) |
Gross Margin |
|
519,517 |
|
|
|
522,169 |
|
|
(2,652 |
) |
|
(0.5 |
%) |
Operating Income |
|
215,019 |
|
|
|
240,628 |
|
|
(25,609 |
) |
|
(10.6 |
%) |
Net
Income for the period |
|
98,786 |
|
|
|
151,815 |
|
|
(53,029 |
) |
|
(34.9 |
%) |
Net Earnings per Share - Basic and Diluted |
$ |
1.30 |
|
|
$ |
1.90 |
|
|
(0.60 |
) |
|
(31.6 |
%) |
Non-IFRS Measures** |
|
|
|
|
|
|
|
Adjusted Operating Income |
$ |
226,629 |
|
|
$ |
240,628 |
|
|
(13,999 |
) |
|
(5.8 |
%) |
% of Sales |
|
5.9 |
% |
|
|
6.0 |
% |
|
|
|
|
Adjusted EBITDA |
|
483,098 |
|
|
|
476,598 |
|
|
6,500 |
|
|
1.4 |
% |
% of Sales |
|
12.5 |
% |
|
|
11.8 |
% |
|
|
|
|
Adjusted Net Income* |
|
106,637 |
|
|
|
147,241 |
|
|
(40,604 |
) |
|
(27.6 |
%) |
Adjusted Net Earnings per Share - Basic and Diluted* |
$ |
1.40 |
|
|
$ |
1.84 |
|
|
(0.44 |
) |
|
(23.9 |
%) |
*Adjusted Net Income and Adjusted Net Earnings
per Share for the three and nine months ended September 30, 2024
were negatively impacted by an unusually high effective tax rate.
This was driven primarily by the magnitude and pace of the
depreciation of the Mexican Peso against the U.S. dollar, which is
the functional currency of the Company’s Mexican operations. In
situations where the local and functional currencies differ, IFRS,
contrary to US GAAP, requires the tax value of assets and
liabilities denominated in local currency to be revalued to the
operations' functional currency at the reporting date, with the
related foreign exchange movements impacting the tax expense for
the period. These foreign exchange movements are non-cash in
nature, do not impact cash taxes and tend to balance out over time.
Including this, and other foreign exchange related items, the
effective tax rate for the nine months ended September 30, 2024 was
38.8%. Excluding these foreign exchange items, the effective tax
rate would have been 31.0%, which is more reflective of a typical
tax rate for the Company. Using a tax rate of 31.0%, Adjusted Net
Earnings per Share would have been $0.44 for the three months ended
September 30, 2024, and $1.47 for the nine months ended September
30, 2024.
**Non-IFRS Measures
The Company prepares its interim financial
statements in accordance with IFRS. However, the Company considers
certain non-IFRS financial measures as useful additional
information in measuring the financial performance and condition of
the Company. These measures, which the Company believes are widely
used by investors, securities analysts and other interested parties
in evaluating the Company’s performance, do not have a standardized
meaning prescribed by IFRS and therefore may not be comparable to
similarly titled measures presented by other publicly traded
companies, nor should they be construed as an alternative to
financial measures determined in accordance with IFRS. Non-IFRS
measures include “Adjusted Net Income”, “Adjusted Net Earnings per
Share (on a basic and diluted basis)”, “Adjusted Operating Income”,
"Adjusted EBITDA”, “Free Cash Flow”, "Free Cash Flow (after IFRS 16
lease payments)", and “Net Debt”.
The following tables provide a reconciliation of
IFRS “Net Income” to Non-IFRS “Adjusted Net Income”, “Adjusted
Operating Income” and “Adjusted EBITDA”:
|
Three months endedSeptember 30,
2024 |
|
Three months endedSeptember 30,
2023 |
Net Income |
$ |
14,157 |
|
$ |
53,744 |
Adjustments, after tax* |
|
- |
|
|
- |
Adjusted Net Income |
$ |
14,157 |
|
$ |
53,744 |
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
Net Income |
$ |
98,786 |
|
$ |
151,815 |
|
Adjustments, after tax* |
|
7,851 |
|
|
(4,574 |
) |
Adjusted Net Income |
$ |
106,637 |
|
$ |
147,241 |
|
*Adjustments are explained in the "Adjustments
to Net Income" section of this Press Release
|
Three months endedSeptember 30,
2024 |
|
Three months endedSeptember 30,
2023 |
Net Income |
$ |
14,157 |
|
|
$ |
53,744 |
|
Income tax expense |
|
33,276 |
|
|
|
14,713 |
|
Other finance income |
|
(1,084 |
) |
|
|
(7,418 |
) |
Share of loss of equity
investments |
|
690 |
|
|
|
600 |
|
Finance expense |
|
18,840 |
|
|
|
21,376 |
|
Adjustments, before tax* |
|
- |
|
|
|
- |
|
Adjusted Operating Income |
$ |
65,879 |
|
|
$ |
83,015 |
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
84,904 |
|
|
|
77,837 |
|
Amortization of development
costs |
|
3,084 |
|
|
|
2,488 |
|
Loss on
disposal of property, plant and equipment |
|
262 |
|
|
|
142 |
|
Adjusted EBITDA |
$ |
154,129 |
|
|
$ |
163,482 |
|
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
Net Income |
$ |
98,786 |
|
|
$ |
151,815 |
|
Income tax expense |
|
63,725 |
|
|
|
38,422 |
|
Other finance income |
|
(8,140 |
) |
|
|
(7,074 |
) |
Share of loss of equity
investments |
|
2,147 |
|
|
|
2,630 |
|
Finance expense |
|
58,501 |
|
|
|
60,108 |
|
Adjustments, before tax* |
|
11,610 |
|
|
|
(5,273 |
) |
Adjusted Operating Income |
$ |
226,629 |
|
|
$ |
240,628 |
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
246,808 |
|
|
|
228,041 |
|
Amortization of development
costs |
|
8,172 |
|
|
|
7,771 |
|
Loss on
disposal of property, plant and equipment |
|
1,489 |
|
|
|
158 |
|
Adjusted EBITDA |
$ |
483,098 |
|
|
$ |
476,598 |
|
*Adjustments are explained in the "Adjustments
to Net Income" section of this Press Release
SALES
Three months ended September 30, 2024 to
three months ended September 30, 2023 comparison
|
Three months endedSeptember 30,
2024 |
|
Three months endedSeptember 30,
2023 |
|
$ Change |
|
% Change |
North America |
$ |
960,256 |
|
|
$ |
1,042,218 |
|
|
(81,962 |
) |
|
(7.9 |
%) |
Europe |
|
250,499 |
|
|
|
302,145 |
|
|
(51,646 |
) |
|
(17.1 |
%) |
Rest of the World |
|
33,638 |
|
|
|
42,644 |
|
|
(9,006 |
) |
|
(21.1 |
%) |
Eliminations |
|
(6,900 |
) |
|
|
(8,069 |
) |
|
1,169 |
|
|
14.5 |
% |
Total Sales |
$ |
1,237,493 |
|
|
$ |
1,378,938 |
|
|
(141,445 |
) |
|
(10.3 |
%) |
The Company’s consolidated sales for the third
quarter of 2024 decreased by $141.4 million or 10.3% to $1,237.5
million as compared to $1,378.9 million for the third quarter of
2023. The total decrease in sales was driven by year-over-year
decreases across all operating segments.
Sales for the third quarter of 2024 in the
Company’s North America operating segment decreased by $82.0
million or 7.9% to $960.3 million from $1,042.2 million for the
third quarter of 2023. The decrease was due to a decrease in
tooling sales of $47.5 million, which are typically dependent on
the timing of tooling construction and final acceptance by the
customer; programs that ended production during or subsequent to
the third quarter of 2023, specifically the Ford Edge, Dodge
Charger/Challenger, and Chevrolet Bolt; and lower year-over-year
OEM production volumes on certain platforms, including the Jeep
Grand Cherokee and Wagoneer, an engine block for Stellantis, and
the Ford Mustang Mach E. These negative factors were partially
offset by the launch and ramp up of new programs during or
subsequent to the third quarter of 2023, including General Motors'
new electric vehicle platforms (BEV3/BET), and the Toyota Tacoma;
higher year-over-year OEM production volumes on certain other light
vehicle platforms, including General Motors' large pick-up truck
and SUV platform, and the Ford Maverick; and the impact of foreign
exchange on the translation of U.S. denominated production sales,
which had a positive impact on overall sales for the third quarter
of 2024 of $21.1 million. Overall third quarter industry-wide OEM
light vehicle production volumes in North America decreased by
approximately 5% year-over-year.
Sales for the third quarter of 2024 in the
Company’s Europe operating segment decreased by $51.6 million or
17.1% to $250.5 million from $302.1 million for the third quarter
of 2023. The decrease was due to lower year-over-year OEM
production volumes on certain platforms, including aluminum engine
blocks for Ford and Mercedes, and the Mercedes' new electric
vehicle platform (EVA2); programs that ended production during or
subsequent to the third quarter of 2023, specifically the BMW Mini;
and a decrease in tooling sales of $8.8 million, which are
typically dependent of the timing of tooling construction and final
acceptance by the customer. These negative factors were partially
offset by higher year-over-year OEM production volumes on certain
platforms, including the Lucid Air, and an aluminum engine block
for Jaguar Land Rover; and the impact of foreign exchange on the
translation of Euro denominated production sales, which had a
positive impact on overall sales for the third quarter of 2024 of
$4.8 million. Overall third quarter industry-wide OEM light vehicle
production volumes in Europe decreased by approximately 6%
year-over-year.
Sales for the third quarter of 2024 in the
Company’s Rest of the World operating segment decreased by $9.0
million or 21.1% to $33.6 million from $42.6 million in the third
quarter of 2023. The decrease was largely driven by programs that
came with the operations acquired from Metalsa in China that ended
production during or subsequent to the third quarter of 2023, lower
year-over-year production volumes on the Cadillac CT6 vehicle
platform in China, and a decrease in tooling sales of $2.0 million;
partially offset by the launch and ramp up of new programs,
specifically the BMW 5-series in China.
Overall tooling sales decreased by $58.3 million
(including outside segment sales eliminations) to $70.2 million for
the third quarter of 2024 from $128.6 million for the third quarter
of 2023.
Nine months ended September 30, 2024 to
nine months ended September 30, 2023 comparison
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
|
$ Change |
|
% Change |
North America |
$ |
2,908,778 |
|
|
$ |
3,063,277 |
|
|
(154,499 |
) |
|
(5.0 |
%) |
Europe |
|
871,469 |
|
|
|
893,638 |
|
|
(22,169 |
) |
|
(2.5 |
%) |
Rest of the World |
|
102,600 |
|
|
|
113,092 |
|
|
(10,492 |
) |
|
(9.3 |
%) |
Eliminations |
|
(19,648 |
) |
|
|
(26,125 |
) |
|
6,477 |
|
|
24.8 |
% |
Total Sales |
$ |
3,863,199 |
|
|
$ |
4,043,882 |
|
|
(180,683 |
) |
|
(4.5 |
%) |
The Company’s consolidated sales for the nine
months ended September 30, 2024 decreased by $180.7 million or 4.5%
to $3,863.2 million as compared to $4,043.9 million for the nine
months ended September 30, 2023. The total decrease in sales was
driven by year-over-year decreases across all operating
segments.
Sales for the nine months ended September 30,
2024 in the Company’s North America operating segment decreased by
$154.5 million or 5.0% to $2,908.8 million from $3,063.3 million
for the nine months ended September 30, 2023. The decrease was due
generally to a decrease in tooling sales of $154.2 million which
are typically dependent on the timing of tooling construction and
final acceptance by the customer; programs that ended production
during or subsequent to the corresponding period of 2023,
specifically the Dodge Charger/Challenger, the Ford Edge, and
Chevrolet Bolt; and lower year-over-year OEM production volumes on
certain platforms, including an engine block for Stellantis, the
Jeep Grand Cherokee and Wagoneer, the Ford Mustang Mach E, and
Mercedes' new electric vehicle platform (EVA2). These negative
factors were partially offset by the launch and ramp up of new
programs, including General Motors' new electric vehicle platforms
(BEV3/BET), and the Toyota Tacoma; higher year-over-year production
volumes of certain light vehicle platforms including the Ford
Escape and Maverick, and General Motors' large pick-up truck and
SUV platform; and the impact of foreign exchange on the translation
of U.S. denominated production sales, which had a positive impact
on overall sales for the nine months ended September 30, 2024 of
$26.1 million.
Sales for the nine months ended September 30,
2024 in the Company’s Europe operating segment decreased by $22.2
million or 2.5% to $871.5 million from $893.6 million for the nine
months ended September 30, 2023. The decrease was due to programs
that ended production during or subsequent to the corresponding
period of 2023, specifically the BMW Mini; and lower year-over-year
production volumes of certain other light vehicle platforms,
including the Mercedes' new electric vehicle platform (EVA2) and
aluminum engine blocks for Ford and Mercedes. These negative
factors were partially offset by higher year-over-year OEM
production volumes on certain platforms, including an aluminum
engine block for Jaguar Land Rover; an increase in tooling sales of
$21.0 million, which are typically dependent on the timing of
tooling construction and final acceptance by the customer; and the
impact of foreign exchange on the translation of Euro denominated
production sales, which had a positive impact on overall sales for
the nine months ended September 30, 2024 of $9.9 million.
Sales for the nine months ended September 30,
2024 in the Company’s Rest of the World operating segment decreased
by $10.5 million or 9.3% to $102.6 million from $113.1 million for
the nine months ended September 30, 2023. The decrease was largely
driven by programs that came with the operations acquired from
Metalsa in China that ended production during or subsequent to the
nine months ended September 30, 2023, and lower year-over-year
production volumes on the Cadillac CT6 vehicle platform in China;
partially offset by the launch and ramp up of new programs,
specifically the BMW 5-series in China, and an increase in tooling
sales of $4.0 million.
Overall tooling sales decreased by $128.1
million (including outside segment sales eliminations) to $174.7
million for the nine months ended September 30, 2024 from $302.8
million for the nine months ended September 30, 2023.
GROSS MARGIN
Three months ended September 30, 2024 to
three months ended September 30, 2023 comparison
|
Three months endedSeptember 30,
2024 |
|
Three months endedSeptember 30,
2023 |
|
$ Change |
|
% Change |
Gross margin |
$ |
163,350 |
|
|
$ |
181,194 |
|
|
(17,844 |
) |
|
(9.8 |
%) |
% of
Sales |
|
13.2 |
% |
|
|
13.1 |
% |
|
|
|
|
The gross margin percentage for the third
quarter of 2024 of 13.2% increased slightly as a percentage of
sales as compared to the gross margin percentage for the third
quarter of 2023 of 13.1% due to:
- productivity and
efficiency improvements at certain operating facilities and other
improvements; and
- a decrease in tooling sales which
typically earn low margin for the Company.
These factors were essentially offset by:
- overall lower
production sales volume and corresponding contribution;
- operational
inefficiencies at certain operating facilities; and
- a negative sales mix, including
additional depreciation expense from recent new program
investments.
Overall market related inflationary pressures on
labour, material and energy costs, along with offsetting commercial
settlements, were generally stable for the quarter on a
year-over-year basis.
Nine months ended September 30, 2024 to
nine months ended September 30, 2023 comparison
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
|
$ Change |
|
% Change |
Gross margin |
$ |
519,517 |
|
|
$ |
522,169 |
|
|
(2,652 |
) |
|
(0.5 |
%) |
% of
Sales |
|
13.4 |
% |
|
|
12.9 |
% |
|
|
|
|
The gross margin percentage for the nine months
ended September 30, 2024 of 13.4% increased as a percentage of
sales by 0.5% as compared to the gross margin percentage for the
nine months ended September 30, 2023 of 12.9%. The increase in
gross margin as a percentage of sales was generally due to:
- productivity and
efficiency improvements at certain operating facilities and other
improvements; and
- a decrease in tooling sales which
typically earn low margin for the Company.
These factors were partially offset by:
- operational
inefficiencies at certain other operating facilities;
- overall lower
production sales volume and corresponding contribution;
- an unfavourable
impact from a year-over-year change in foreign exchange rates in
Mexico; and
- a negative sales mix, including
additional depreciation expense from recent new program
investments.
Overall market related inflationary pressures on
labour, material and energy costs, along with offsetting commercial
settlements, were generally stable year-over-year.
ADJUSTMENTS TO NET INCOME
Adjusted Net Income excludes certain items as
set out in the following tables and described in the notes thereto.
Management uses Adjusted Net Income as a measurement of operating
performance of the Company and believes that, in conjunction with
IFRS measures, it provides useful information about the financial
performance and condition of the Company.
TABLE A
Three months ended September 30, 2024 to
three months ended September 30, 2023 comparison
No adjustments were noted during the three
months ended September 30, 2024 and 2023.
TABLE B
Nine months ended September 30, 2024 to
nine months ended September 30, 2023 comparison
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
|
$ Change |
NET INCOME |
$ |
98,786 |
|
|
$ |
151,815 |
|
|
$ |
(53,029 |
) |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Restructuring costs (1) |
|
11,610 |
|
|
|
- |
|
|
|
11,610 |
|
Net gain on disposal of equity
investments (2) |
|
- |
|
|
|
(5,273 |
) |
|
|
5,273 |
|
ADJUSTMENTS, BEFORE TAX |
$ |
11,610 |
|
|
$ |
(5,273 |
) |
|
$ |
16,883 |
|
|
|
|
|
|
|
Tax impact of adjustments |
|
(3,759 |
) |
|
|
699 |
|
|
|
(4,458 |
) |
ADJUSTMENTS, AFTER TAX |
$ |
7,851 |
|
|
$ |
(4,574 |
) |
|
$ |
12,425 |
|
|
|
|
|
|
|
ADJUSTED NET INCOME |
$ |
106,637 |
|
|
$ |
147,241 |
|
|
$ |
(40,604 |
) |
|
|
|
|
|
|
Number of Shares Outstanding –
Basic (‘000) |
|
76,191 |
|
|
|
79,933 |
|
|
|
Adjusted Basic Net Earnings
Per Share |
$ |
1.40 |
|
|
$ |
1.84 |
|
|
|
Number of Shares Outstanding –
Diluted (‘000) |
|
76,194 |
|
|
|
79,989 |
|
|
|
Adjusted Diluted Net Earnings Per Share |
$ |
1.40 |
|
|
$ |
1.84 |
|
|
|
(1) Restructuring
costs
Additions to the restructuring provision during
the nine months ended September 30, 2024 totaled $11.6 million and
represent employee-related severance resulting from the rightsizing
of certain operations in Germany, Mexico, Canada, and the United
States.
(2) Net gain on
disposal of equity investments
On March 24, 2023, Martinrea sold its equity
interest in VoltaXplore Inc. ("VoltaXplore) to NanoXplore Inc.
("NanoXplore") for 3,420,406 common shares of NanoXplore at $2.92
per share representing an aggregate consideration of $10.0 million.
The sale transaction resulted in a gain on disposal of equity
investments during the first quarter of 2023 as follows:
Gross gain (Total consideration of $10.0 million less book value of
investment) |
$ |
6,821 |
|
Less:
gain attributable to indirect retained interest |
|
(1,548 |
) |
Net gain on disposal of equity investments |
$ |
5,273 |
|
Subsequent to this transaction, the Company no
longer holds a direct equity interest in VoltaXplore while its
equity ownership interest in NanoXplore increased from 21.1% to
22.7%.
NET INCOME
Three months ended September 30, 2024 to
three months ended September 30, 2023 comparison
|
Three months ended September 30,
2024 |
|
Three months ended September 30,
2023 |
|
$ Change |
|
% Change |
Net Income |
$ |
14,157 |
|
$ |
53,744 |
|
(39,587 |
) |
|
(73.7 |
%) |
Net Earnings per Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
0.19 |
|
$ |
0.68 |
|
|
|
|
Net Income for the third quarter of 2024
decreased by $39.6 million to $14.2 million or $0.19 per share, on
a basic and diluted basis, from Net Income of $53.7 million or
$0.68 per share, on a basic and diluted basis, for the third
quarter of 2023.
Net Income for the third quarter of 2024, as
compared to the third quarter of 2023, was negatively impacted by
the following:
- lower gross
margin from lower year-over-year sales volume;
- a net foreign
exchange gain of $1.3 million for the third quarter of 2024
compared to a gain of $7.1 million for the third quarter of 2023;
and
- a higher effective tax rate (70.2%
for the third quarter of 2024 compared to 21.5% for the third
quarter of 2023) driven primarily by the IFRS accounting treatment
of the rapid depreciation of the Mexican Peso against the U.S.
dollar that does not impact cash.
These factors were partially offset by the
following:
- a year-over-year
decrease in SG&A expense, as previously explained; and
- a $2.5 million year-over-year
decrease in finance expense as a result of lower borrowing rates on
the Company's revolving bank debt.
Nine months ended September 30, 2024 to
nine months ended September 30, 2023 comparison
|
Nine months ended September 30, 2024 |
|
Nine months ended September 30, 2023 |
|
$ Change |
|
% Change |
Net Income |
$ |
98,786 |
|
$ |
151,815 |
|
(53,029 |
) |
|
(34.9 |
%) |
Adjusted Net Income |
|
106,637 |
|
|
147,241 |
|
(40,604 |
) |
|
(27.6 |
%) |
Net Earnings per Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
1.30 |
|
$ |
1.90 |
|
|
|
|
Adjusted Net Earnings per
Share |
|
|
|
|
|
|
|
Basic and Diluted |
$ |
1.40 |
|
$ |
1.84 |
|
|
|
|
Net Income, before adjustments, for the nine
months ended September 30, 2024 decreased by $53.0 million to $98.8
million or $1.30 per share, on a basic and diluted basis, from Net
Income of $151.8 million or $1.90 per share, on a basic and diluted
basis, for the nine months ended September 30, 2023. Excluding the
adjustments explained in Table B under “Adjustments to Net Income”,
Adjusted Net Income for the nine months ended September 30, 2024
decreased by $40.6 million to $106.6 million or $1.40 per share on
a basic and diluted basis, from $147.2 million or $1.84 per share
on a basic and diluted basis, for the nine months ended September
30, 2023.
Adjusted Net Income for the nine months ended
September 30, 2024, as compared to the nine months ended September
30, 2023, was negatively impacted by the following:
- a year-over-year
increase in SG&A expense, as previously explained;
- a $3.8 million
year-over-year increase in research and development costs driven
generally by increased new product and process development
activity;
- lower gross
margin on lower year-over-year sales volume;
- a $1.5 million
loss on the disposal of property, plant and equipment for the nine
months ended September 30, 2024; and
- a higher effective tax rate (38.8%
for the nine months ended September 30, 2024 compared to 20.4% for
the nine months ended September 30, 2023) driven primarily by the
IFRS accounting treatment of the rapid depreciation of the Mexican
Peso against the U.S. dollar that does not impact cash.
These factors were partially offset by the
following:
- a net foreign
exchange gain of $8.1 million for the nine months ended September
30, 2024 compared to a gain of $6.5 million for the nine months
ended September 30, 2023; and
- a $1.6 million year-over-year
decrease in finance expense as a result of lower borrowing rates on
the Company's revolving bank debt.
Adjusted Net Income and Adjusted Net Earnings
per Share for the three and nine months ended September 30, 2024
were negatively impacted by an unusually high effective tax rate.
This was driven primarily by the magnitude and pace of the
depreciation of the Mexican Peso against the U.S. dollar, which is
the functional currency of the Company’s Mexican operations. In
situations where the local and functional currencies differ, IFRS,
contrary to US GAAP, requires the tax value of assets and
liabilities denominated in local currency to be revalued to the
operations' functional currency at the reporting date, with the
related foreign exchange movements impacting the tax expense for
the period. These foreign exchange movements are non-cash in
nature, do not impact cash taxes and tend to balance out over time.
Including this, and other foreign exchange related items, the
effective tax rate for the nine months ended September 30, 2024 was
38.8%. Excluding these foreign exchange items, the effective tax
rate would have been 31.0%, which is more reflective of a typical
tax rate for the Company. Using a tax rate of 31.0%, Adjusted Net
Earnings per Share would have been $0.44 for the three months ended
September 30, 2024, and $1.47 for the nine months ended September
30, 2024.
DIVIDEND
A cash dividend of $0.05 per share has been
declared by the Board of Directors payable to shareholders of
record on December 31, 2024, on or about January 15, 2025.
ABOUT MARTINREA
Martinrea International Inc. is a leader in the
development and production of quality metal parts, assemblies and
modules, fluid management systems, and complex aluminum products
focused primarily on the automotive sector. Martinrea currently
operates in 56 locations in Canada, the United States, Mexico,
Brazil, Germany, Slovakia, Spain, China, South Africa, and Japan.
Martinrea’s vision is making lives better by being the best
supplier we can be in the products we make and the services we
provide. For more information on Martinrea, please visit
www.martinrea.com. Follow Martinrea on X and Facebook.
CONFERENCE CALL DETAILS
A conference call to discuss the financial
results will be held on Tuesday, November 12, 2024 at 5:30 p.m.
Eastern Time. To participate, please dial 416-641-6104 (Toronto
area) or 800-952-5114 (toll free Canada and US) and enter
participant code 1624622#. Please call 10 minutes prior to the
start of the conference call.
The conference call will also be webcast live in
listen‐only mode and archived for twelve months. The webcast and
accompanying presentation can be accessed at:
https://www.martinrea.com/investor-relations/events-presentations/.
There will also be a rebroadcast of the call
available by dialing 905-694-9451 or toll free 800-408-3053
(Conference ID – 9076430#). The rebroadcast will be available until
December 14, 2024 at 5:00 p.m.
If you have any teleconferencing questions,
please call Ganesh Iyer at 416-749-0314.
FORWARD-LOOKING INFORMATION
Special Note Regarding Forward-Looking
Statements
This Press Release and the documents
incorporated by reference therein contains forward-looking
statements within the meaning of applicable Canadian securities
laws including those related to the Company’s expectations as to,
or its views or beliefs in or on, the impact of, or duration of, or
factors affecting, or expected response to or growth of,
improvements in, expansion of and/or guidance or outlook (including
for 2024) as to future results, revenue, sales, margin, gross
margin, earnings, and earnings per share, adjusted earnings per
share, free cash flow, volumes, adjusted net earnings per share,
operating income margins, operating margins, adjusted operating
income margins, leverage ratios, net debt to adjusted EBITDA(1),
debt repayment, Adjusted EBITDA(1), improvements in interest rates,
tax rates, supply constraints, inflation and labour, the growth of
the Company and pursuit of, and belief in, its strategies, the
strength, recovery and growth of the automotive industry and
continuing challenges, capital allocation strategies, contemplated
purchases under the NCIB, as well as other forward-looking
statements. The words “continue”, “expect”, “anticipate”,
“estimate”, “may”, “will”, “should”, “views”, “intend”, “believe”,
“plan” and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are based on
estimates and assumptions made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors that the Company believes are appropriate in the
circumstances, such as expected sales and industry production
estimates, current foreign exchange rates, timing of product
launches and operational improvement during the period, and current
Board approved budgets. Many factors could cause the Company’s
actual results, performance or achievements to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation, the following factors, some of which
are discussed in detail in the Company’s AIF and MD&A for the
year ended December 31, 2023, and other public filings which can be
found at www.sedarplus.ca:
- North American and Global Economic
and Political Conditions (including war) and Consumer
Confidence
- Automotive Industry Risks
- Pandemics and Epidemics, Force
Majeure Events, Natural Disasters, Terrorist Activities, Political
and Civil Unrest or War, and Other Outbreaks
- Russia and Ukraine War and
Hamas-Israel War
- Semiconductor Chip Shortages and
Price Increases
- Inflationary Pressures
- Regional Energy Shortages
- Dependence Upon Key Customers
- Customer Consolidation and
Cooperation
- Emergence of Potentially Disruptive
EV OEMs
- Outsourcing and Insourcing
Trends
- Financial Viability of Suppliers
and Key Suppliers and Supply Disruptions
- Competition
- Customer Pricing Pressures,
Contractual Arrangements, Cost and Risk Absorption and Purchase
Orders
- Material and Commodity Prices and
Volatility
- Scrap Steel/Aluminum Price
Volatility
- Quote/Pricing Assumptions
- Launch and Operational Costs and
Cost Structure
- Fluctuations in Operating
Results
- Product Warranty,
Repair/Replacement Costs, Recall, Product Liability and Liability
Risk
- Product Development and
Technological Change
- A Shift Away from Technologies in
Which the Company is Investing
- Dependence Upon Key Personnel
- Limited Financial
Resources/Uncertainty of Future Financing/Banking
- Cybersecurity Threats
- Acquisitions
- Joint Ventures
- Private or Public Equity
Investments in Technology Companies
- Potential Tax Exposures
- Potential Rationalization Costs,
Turnaround Costs and Impairment Charges
- Labour Relations Matters
- Trade Restrictions or Disputes
- Changes in Laws and Governmental
Regulations
- Environmental Regulation and
Climate Change
- Litigation and Regulatory
Compliance and Investigations
- Risks of Conducting Business in
Foreign Countries, Including China, Brazil and Other Growing
Markets
- Currency Risk
- Internal Controls Over Financial
Reporting and Disclosure Controls and Procedures
- Loss of Use of Key Manufacturing
Facilities
- Intellectual Property
- Availability of Consumer Credit or
Cost of Borrowing
- Evolving Business Risk Profile
- Competition with Low Cost
Countries
- The Company’s Ability to Shift its
Manufacturing Footprint to Take Advantage of Opportunities in
Growing Markets
- Change in the Company’s Mix of
Earnings Between Jurisdictions with Lower Tax Rates and Those with
Higher Tax Rates
- Pension Plans and Other
Post-Employment Benefits
- Potential Volatility of Share
Prices
- Dividends
- Lease Obligations
These factors should be considered carefully,
and readers should not place undue reliance on the Company’s
forward-looking statements. The Company has no intention and
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
The common shares of Martinrea trade on The
Toronto Stock Exchange under the symbol “MRE”.
For further information, please contact:
Peter CirulisChief Financial OfficerMartinrea
International Inc.3210 Langstaff RoadVaughan, Ontario L4K
5B2Tel: 416-749-0314Fax:
289-982-3001
1 The Company prepares its financial statements
in accordance with IFRS Accounting Standards (“IFRS”). However, the
Company considers certain non-IFRS financial measures as useful
additional information in measuring the financial performance and
condition of the Company. These measures, which the Company
believes are widely used by investors, securities analysts and
other interested parties in evaluating the Company’s performance,
do not have a standardized meaning prescribed by IFRS and therefore
may not be comparable to similarly titled measures presented by
other publicly traded companies, nor should they be construed as an
alternative to financial measures determined in accordance with
IFRS. Non-IFRS measures, included anywhere in this press release,
include “Adjusted Net Income”, “Adjusted Net Earnings per Share (on
a basic and diluted basis)”, “Adjusted Operating Income”, “Adjusted
EBITDA”, “Free Cash Flow”, “Free Cash-Flow (after IFRS 16 lease
payments)” and “Net Debt”. The relevant IFRS financial measure, as
applicable, and a reconciliation of certain non-IFRS financial
measures to measures determined in accordance with IFRS are
contained in the Company’s Management Discussion and Analysis for
the three and nine months ended September 30, 2024 and in this
press release.
Martinrea International Inc.Interim Condensed
Consolidated Balance Sheets(in thousands of Canadian dollars)
(unaudited)
|
Note |
September 30, 2024 |
December 31, 2023 |
ASSETS |
|
|
|
Cash and cash equivalents |
|
$ |
177,267 |
$ |
186,804 |
Trade and other
receivables |
2 |
|
801,012 |
|
695,819 |
Inventories |
3 |
|
564,558 |
|
568,274 |
Prepaid expenses and
deposits |
|
|
35,611 |
|
33,904 |
Income
taxes recoverable |
|
|
35,644 |
|
11,089 |
TOTAL CURRENT ASSETS |
|
|
1,614,092 |
|
1,495,890 |
Property, plant and equipment |
4 |
|
1,945,783 |
|
1,943,771 |
Right-of-use assets |
5 |
|
224,230 |
|
238,552 |
Deferred tax assets |
|
|
193,175 |
|
192,301 |
Intangible assets |
|
|
40,193 |
|
42,743 |
Investments |
6 |
|
66,124 |
|
60,170 |
Pension
assets |
|
|
17,046 |
|
16,303 |
TOTAL NON-CURRENT ASSETS |
|
|
2,486,551 |
|
2,493,840 |
TOTAL ASSETS |
|
$ |
4,100,643 |
$ |
3,989,730 |
|
|
|
|
LIABILITIES |
|
|
|
Trade and other payables |
|
$ |
1,185,482 |
$ |
1,176,579 |
Provisions |
7 |
|
8,843 |
|
29,892 |
Income taxes payable |
|
|
52,364 |
|
25,017 |
Current portion of long-term
debt |
8 |
|
11,290 |
|
12,778 |
Current
portion of lease liabilities |
9 |
|
52,177 |
|
48,507 |
TOTAL CURRENT LIABILITIES |
|
|
1,310,156 |
|
1,292,773 |
Long-term debt |
8 |
|
986,063 |
|
956,458 |
Lease liabilities |
9 |
|
192,233 |
|
210,469 |
Pension and other
post-retirement benefits |
|
|
40,055 |
|
37,261 |
Deferred tax liabilities |
|
|
26,059 |
|
27,588 |
TOTAL NON-CURRENT LIABILITIES |
|
|
1,244,410 |
|
1,231,776 |
TOTAL LIABILITIES |
|
|
2,554,566 |
|
2,524,549 |
|
|
|
|
EQUITY |
|
|
|
Capital stock |
11 |
|
611,101 |
|
645,256 |
Contributed surplus |
|
|
45,950 |
|
45,903 |
Accumulated other
comprehensive income |
|
|
139,934 |
|
95,753 |
Retained earnings |
|
|
749,092 |
|
678,269 |
TOTAL EQUITY |
|
|
1,546,077 |
|
1,465,181 |
TOTAL LIABILITIES AND EQUITY |
|
$ |
4,100,643 |
$ |
3,989,730 |
Contingencies (note 16)Subsequent event
(note 18)
See accompanying notes to the interim condensed consolidated
financial statements.
On behalf of the Board:
“Robert Wildeboer” |
Director |
“Terry
Lyons” |
Director |
Martinrea International Inc.Interim Condensed
Consolidated Statements of Operations(in thousands of Canadian
dollars, except per share amounts) (unaudited)
|
Note |
Three
monthsendedSeptember 30,2024 |
|
Three
monthsendedSeptember 30,2023 |
|
Nine monthsendedSeptember 30,2024 |
|
Nine monthsendedSeptember 30,2023 |
|
|
|
|
|
|
|
SALES |
|
$ |
1,237,493 |
|
$ |
1,378,938 |
|
$ |
3,863,199 |
|
$ |
4,043,882 |
|
|
|
|
|
|
|
Cost of sales (excluding depreciation of property, plant and
equipment and right-of-use assets) |
|
|
(993,212 |
) |
|
(1,124,326 |
) |
|
(3,109,104 |
) |
|
(3,306,836 |
) |
Depreciation of property, plant and equipment and right-of-use
assets (production) |
|
|
(80,931 |
) |
|
(73,418 |
) |
|
(234,578 |
) |
|
(214,877 |
) |
Total cost of sales |
|
|
(1,074,143 |
) |
|
(1,197,744 |
) |
|
(3,343,682 |
) |
|
(3,521,713 |
) |
GROSS MARGIN |
|
|
163,350 |
|
|
181,194 |
|
|
519,517 |
|
|
522,169 |
|
|
|
|
|
|
|
Research and development costs |
|
|
(10,852 |
) |
|
(9,628 |
) |
|
(32,037 |
) |
|
(28,257 |
) |
Selling, general and administrative |
|
|
(82,384 |
) |
|
(83,990 |
) |
|
(247,132 |
) |
|
(239,962 |
) |
Depreciation of property, plant and equipment and right-of-use
assets (non-production) |
|
|
(3,973 |
) |
|
(4,419 |
) |
|
(12,230 |
) |
|
(13,164 |
) |
Loss on disposal of property, plant and equipment |
|
|
(262 |
) |
|
(142 |
) |
|
(1,489 |
) |
|
(158 |
) |
Restructuring costs |
7 |
|
- |
|
|
- |
|
|
(11,610 |
) |
|
- |
|
OPERATING INCOME |
|
|
65,879 |
|
|
83,015 |
|
|
215,019 |
|
|
240,628 |
|
|
|
|
|
|
|
Share of loss of equity investments |
6 |
|
(690 |
) |
|
(600 |
) |
|
(2,147 |
) |
|
(2,630 |
) |
Net gain on disposal of equity investments |
|
|
- |
|
|
- |
|
|
- |
|
|
5,273 |
|
Finance expense |
13 |
|
(18,840 |
) |
|
(21,376 |
) |
|
(58,501 |
) |
|
(60,108 |
) |
Other finance income |
13 |
|
1,084 |
|
|
7,418 |
|
|
8,140 |
|
|
7,074 |
|
INCOME BEFORE INCOME TAXES |
|
|
47,433 |
|
|
68,457 |
|
|
162,511 |
|
|
190,237 |
|
|
|
|
|
|
|
Income tax expense |
10 |
|
(33,276 |
) |
|
(14,713 |
) |
|
(63,725 |
) |
|
(38,422 |
) |
NET INCOME FOR THE
PERIOD |
|
$ |
14,157 |
|
$ |
53,744 |
|
$ |
98,786 |
|
$ |
151,815 |
|
|
|
|
|
|
|
Basic earnings per share |
12 |
$ |
0.19 |
|
$ |
0.68 |
|
$ |
1.30 |
|
$ |
1.90 |
|
Diluted earnings per share |
12 |
$ |
0.19 |
|
$ |
0.68 |
|
$ |
1.30 |
|
$ |
1.90 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Comprehensive Income(in thousands of
Canadian dollars) (unaudited)
|
Three
monthsendedSeptember 30,2024 |
|
Three
monthsendedSeptember 30,2023 |
Nine monthsendedSeptember 30,2024 |
|
Nine monthsendedSeptember 30,2023 |
|
|
|
|
|
|
NET INCOME FOR THE
PERIOD |
$ |
14,157 |
|
$ |
53,744 |
$ |
98,786 |
|
$ |
151,815 |
|
Other
comprehensive income (loss), net
of tax: |
|
|
|
|
Items that may be reclassified to net
income |
|
|
|
|
Foreign currency translation differences for foreign
operations |
|
(1,472 |
) |
|
28,682 |
|
44,206 |
|
|
(2,345 |
) |
Items that will not be reclassified to net
income |
|
|
|
|
Share of other comprehensive income (loss) of equity investments
(note 6) |
|
14 |
|
|
14 |
|
(25 |
) |
|
(4 |
) |
Remeasurement of defined benefit plans |
|
322 |
|
|
3,184 |
|
(814 |
) |
|
5,630 |
|
Other comprehensive income
(loss), net of tax |
|
(1,136 |
) |
|
31,880 |
|
43,367 |
|
|
3,281 |
|
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD |
$ |
13,021 |
|
$ |
85,624 |
$ |
142,153 |
|
$ |
155,096 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Changes in Equity(in thousands of
Canadian dollars) (unaudited)
|
Capitalstock |
|
Contributedsurplus |
|
Accumulatedothercomprehensiveincome |
|
Retainedearnings |
|
Total equity |
|
BALANCE AT DECEMBER 31,
2022 |
$ |
663,646 |
|
$ |
45,558 |
|
$ |
124,065 |
|
$ |
543,636 |
|
$ |
1,376,905 |
|
Net income for the period |
|
- |
|
|
- |
|
|
- |
|
|
151,815 |
|
|
151,815 |
|
Compensation expense related to stock options |
|
- |
|
|
331 |
|
|
- |
|
|
- |
|
|
331 |
|
Dividends ($0.15 per share) |
|
- |
|
|
- |
|
|
- |
|
|
(11,939 |
) |
|
(11,939 |
) |
Exercise of employee stock options |
|
358 |
|
|
(97 |
) |
|
- |
|
|
- |
|
|
261 |
|
Repurchase of common shares (note 11) |
|
(13,370 |
) |
|
- |
|
|
- |
|
|
(7,474 |
) |
|
(20,844 |
) |
Other comprehensive income (loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
- |
|
|
- |
|
|
- |
|
|
5,630 |
|
|
5,630 |
|
Foreign currency translation differences |
|
- |
|
|
- |
|
|
(2,345 |
) |
|
- |
|
|
(2,345 |
) |
Share of other comprehensive loss of equity investments |
|
- |
|
|
- |
|
|
(4 |
) |
|
- |
|
|
(4 |
) |
BALANCE AT SEPTEMBER 30,
2023 |
|
650,634 |
|
|
45,792 |
|
|
121,716 |
|
|
681,668 |
|
|
1,499,810 |
|
Net income for the period |
|
- |
|
|
- |
|
|
- |
|
|
1,850 |
|
|
1,850 |
|
Compensation expense related to stock options |
|
- |
|
|
111 |
|
|
- |
|
|
- |
|
|
111 |
|
Dividends ($0.05 per share) |
|
- |
|
|
- |
|
|
- |
|
|
(3,907 |
) |
|
(3,907 |
) |
Repurchase of common shares (note 11) |
|
(5,378 |
) |
|
- |
|
|
- |
|
|
(2,847 |
) |
|
(8,225 |
) |
Other comprehensive income (loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
- |
|
|
- |
|
|
- |
|
|
1,505 |
|
|
1,505 |
|
Foreign currency translation differences |
|
- |
|
|
- |
|
|
(25,949 |
) |
|
- |
|
|
(25,949 |
) |
Share of other comprehensive loss of equity investments |
|
- |
|
|
- |
|
|
(14 |
) |
|
- |
|
|
(14 |
) |
BALANCE AT DECEMBER 31,
2023 |
|
645,256 |
|
|
45,903 |
|
|
95,753 |
|
|
678,269 |
|
|
1,465,181 |
|
Net income for the period |
|
- |
|
|
- |
|
|
- |
|
|
98,786 |
|
|
98,786 |
|
Compensation expense related to stock options |
|
- |
|
|
127 |
|
|
- |
|
|
- |
|
|
127 |
|
Dividends ($0.15 per share) |
|
- |
|
|
- |
|
|
- |
|
|
(11,281 |
) |
|
(11,281 |
) |
Exercise of employee stock options |
|
350 |
|
|
(80 |
) |
|
- |
|
|
- |
|
|
270 |
|
Repurchase of common shares (note 11) |
|
(34,505 |
) |
|
- |
|
|
- |
|
|
(15,868 |
) |
|
(50,373 |
) |
Other comprehensive income (loss) net of tax |
|
|
|
|
|
Remeasurement of defined benefit plans |
|
- |
|
|
- |
|
|
- |
|
|
(814 |
) |
|
(814 |
) |
Foreign currency translation differences |
|
- |
|
|
- |
|
|
44,206 |
|
|
- |
|
|
44,206 |
|
Share of other comprehensive loss of equity investments |
|
- |
|
|
- |
|
|
(25 |
) |
|
- |
|
|
(25 |
) |
BALANCE AT SEPTEMBER 30,
2024 |
$ |
611,101 |
|
$ |
45,950 |
|
$ |
139,934 |
|
$ |
749,092 |
|
$ |
1,546,077 |
|
See accompanying notes to the interim condensed consolidated
financial statements.
Martinrea International Inc.Interim Condensed
Consolidated Statements of Cash Flows(in thousands of Canadian
dollars) (unaudited)
|
Three
monthsendedSeptember 30,2024 |
|
Three
monthsendedSeptember 30,2023 |
|
Nine monthsendedSeptember 30,2024 |
|
Nine monthsendedSeptember 30,2023 |
|
CASH PROVIDED BY (USED IN): |
|
|
|
|
OPERATING
ACTIVITIES: |
|
|
|
|
Net income for the period |
$ |
14,157 |
|
$ |
53,744 |
|
$ |
98,786 |
|
$ |
151,815 |
|
Adjustments for: |
|
|
|
|
Depreciation of property, plant and equipment and right-of-use
assets |
|
84,904 |
|
|
77,837 |
|
|
246,808 |
|
|
228,041 |
|
Amortization of development costs |
|
3,084 |
|
|
2,488 |
|
|
8,172 |
|
|
7,771 |
|
Unrealized loss (gain) on foreign exchange forward contracts |
|
(4,382 |
) |
|
298 |
|
|
(913 |
) |
|
215 |
|
Finance expense |
|
18,840 |
|
|
21,376 |
|
|
58,501 |
|
|
60,108 |
|
Income tax expense |
|
33,276 |
|
|
14,713 |
|
|
63,725 |
|
|
38,422 |
|
Loss on disposal of property, plant and equipment |
|
262 |
|
|
142 |
|
|
1,489 |
|
|
158 |
|
Deferred and restricted share units expense |
|
2,893 |
|
|
2,294 |
|
|
6,261 |
|
|
9,505 |
|
Stock options expense |
|
43 |
|
|
110 |
|
|
127 |
|
|
331 |
|
Share of loss of equity investments |
|
690 |
|
|
600 |
|
|
2,147 |
|
|
2,630 |
|
Net gain on disposal of equity investments |
|
- |
|
|
- |
|
|
- |
|
|
(5,273 |
) |
Pension and other post-retirement benefits expense |
|
571 |
|
|
693 |
|
|
1,702 |
|
|
2,087 |
|
Contributions made to pension and other post-retirement
benefits |
|
(489 |
) |
|
(666 |
) |
|
(1,657 |
) |
|
(1,886 |
) |
|
|
153,849 |
|
|
173,629 |
|
|
485,148 |
|
|
493,924 |
|
Changes in non-cash working
capital items: |
|
|
|
|
Trade and other receivables |
|
(2,739 |
) |
|
(1,108 |
) |
|
(87,575 |
) |
|
(128,104 |
) |
Inventories |
|
12,159 |
|
|
25,395 |
|
|
15,897 |
|
|
23,500 |
|
Prepaid expenses and deposits |
|
(2,163 |
) |
|
(2,854 |
) |
|
(1,226 |
) |
|
2,595 |
|
Trade, other payables and provisions |
|
(5,529 |
) |
|
(5,741 |
) |
|
(17,128 |
) |
|
73,577 |
|
|
|
155,577 |
|
|
189,321 |
|
|
395,116 |
|
|
465,492 |
|
Interest paid |
|
(21,839 |
) |
|
(25,278 |
) |
|
(65,306 |
) |
|
(73,041 |
) |
Income taxes paid |
|
(1,849 |
) |
|
(10,839 |
) |
|
(50,533 |
) |
|
(74,622 |
) |
NET CASH PROVIDED BY
OPERATING ACTIVITIES |
$ |
131,889 |
|
$ |
153,204 |
|
$ |
279,277 |
|
$ |
317,829 |
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
Increase (decrease) in long-term debt (net of deferred financing
fees) |
|
(29,094 |
) |
|
(27,011 |
) |
|
18,847 |
|
|
8,320 |
|
Equipment loan repayments |
|
(1,329 |
) |
|
(3,895 |
) |
|
(5,899 |
) |
|
(12,471 |
) |
Principal payments of lease liabilities |
|
(13,096 |
) |
|
(11,845 |
) |
|
(38,852 |
) |
|
(34,732 |
) |
Dividends paid |
|
(3,743 |
) |
|
(3,981 |
) |
|
(11,489 |
) |
|
(12,019 |
) |
Exercise of employee stock options |
|
- |
|
|
- |
|
|
270 |
|
|
261 |
|
Repurchase of common shares |
|
(9,471 |
) |
|
(10,804 |
) |
|
(49,393 |
) |
|
(20,844 |
) |
NET CASH USED IN
FINANCING ACTIVITIES |
$ |
(56,733 |
) |
$ |
(57,536 |
) |
$ |
(86,516 |
) |
$ |
(71,485 |
) |
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
Purchase of property, plant and equipment (excluding capitalized
interest)* |
|
(80,814 |
) |
|
(62,444 |
) |
|
(191,681 |
) |
|
(222,300 |
) |
Capitalized development costs |
|
(1,457 |
) |
|
(1,397 |
) |
|
(4,601 |
) |
|
(5,598 |
) |
Increase in investments (note 6) |
|
- |
|
|
- |
|
|
(8,130 |
) |
|
(1,000 |
) |
Proceeds on disposal of property, plant and equipment |
|
4,122 |
|
|
16 |
|
|
5,311 |
|
|
402 |
|
NET CASH USED IN
INVESTING ACTIVITIES |
$ |
(78,149 |
) |
$ |
(63,825 |
) |
$ |
(199,101 |
) |
$ |
(228,496 |
) |
|
|
|
|
|
Effect
of foreign exchange rate changes on cash and cash equivalents |
|
(1,178 |
) |
|
1,127 |
|
|
(3,197 |
) |
|
(778 |
) |
|
|
|
|
|
INCREASE
(DECREASE) IN CASH AND CASH
EQUIVALENTS |
|
(4,171 |
) |
|
32,970 |
|
|
(9,537 |
) |
|
17,070 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD |
|
181,438 |
|
|
145,755 |
|
|
186,804 |
|
|
161,655 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
177,267 |
|
$ |
178,725 |
|
$ |
177,267 |
|
$ |
178,725 |
|
*As at September 30, 2024, $46,104
(December 31, 2023 - $75,800) of purchases of property, plant
and equipment remain unpaid and are recorded in trade and other
payables.
See accompanying notes to the interim condensed
consolidated financial statements.
Martinrea (TSX:MRE)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024
Martinrea (TSX:MRE)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024