TORONTO, June 24, 2020 (GLOBE NEWSWIRE) — 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 that it has declared a quarterly cash dividend of $0.05 per share payable to shareholders of record on July 15, 2020, on or about July 25, 2020.
In addition, the Company announced that it had amended its lending agreements with its banking syndicate to provide enhanced financial covenant flexibility on a present and go forward basis.  The amendments in essence provide that the Company’s calculations of its most basic financial covenant, the Net Debt:LTM EBITDA ratio, for the next four quarterly calculations, would exclude EBITDA from the second quarter of 2020 and instead will be based on the annualized total of the remaining three quarters (i.e., the sum of the three quarters divided by three fourths).  Simply stated, the impact of the COVID-19 related shutdown of the industry, and most of the Company’s operations, occurring during the second quarter of 2020, would be ignored for the purpose of financial covenant calculations under the Company’s lending arrangements.Rob Wildeboer, Martinrea’s Executive Chairman, stated:  “The declaration of our dividend underscores our confidence in the future of the company, the restart of our operations and our long term view of the industry.  Our shareholders have been very supportive of our team at Martinrea and we thank them for their continued confidence in us.  We also want to thank our lending partners for their support, and on working with us on a very good solution to provide us with future financial flexibility, as we take advantage of opportunities to invest in and grow our business.  We have always viewed our lenders as partners of our company, and I believe that relationship has been mutual for many years, as this shows.  There will be opportunities for us to grow over time coming out of the crisis, as a financially strong industry player.  Our second quarter was, as we believe is the case for most participants in our industry, quite frankly, brutal—the worst quarter from a financial point of view in our history.  While the second quarter is nearly over, inclusive of the recently acquired assets from Metalsa, quarterly sales will likely be down by approximately 55% year-over-year, our decremental year-over-year adjusted operating income margin will likely approximate 30% (about 25% if we exclude the Metalsa assets) and we may have some restructuring costs and non-cash asset write-downs for the quarter in light of the significant reduction in volumes and current industry production projections.  We ultimately responded quickly and aggressively to the COVID-19 related shutdowns, but the reality is that it is impossible to make money when we are not producing and shipping parts.  However, we have started producing again in North America and Europe in the past several weeks, and production is ramping up nicely.  China is operating at normal production rates based on customer orders.  Subject to dealing with the continued COVID-19 pandemic, potential lockdown concerns, and overall industry volumes, we look forward to improving sales and profits in the second half of the year and beyond.”Pat D’Eramo, Martinrea’s President and Chief Executive Officer, stated:  “We are successfully restarting our operations globally.  The first few weeks of the restart were challenging for many in the industry, as customers, suppliers and employees worked to smooth out operations; however, we are now seeing production volumes stabilize and increase.  During the shutdown, we were very busy improving our company everywhere.  We swiftly implemented cost reduction actions, enhanced our liquidity position, and enhanced business performance through our operational excellence and lean approach.  Our lean teams were busy in many of our plants, improving processes that will benefit us going forward.  We did a deep dive into streamlining our functional and manufacturing activities.  I believe that coming out of this crisis we will be able to achieve historical levels of production while operating our business more efficiently and with fewer resources, based on restructuring actions taken at our recently acquired Metalsa assets as well as our existing offices and operating facilities.  I anticipate a total workforce reduction in the range of 7%, with increased productivity and efficiency.  We will be a stronger and more competitive supplier as a result, and that is good news for our people.  Over the long term it is critical to job security and opportunity to be as competitive as we can be.  I want to thank our people for their support today and throughout this COVID-19 crisis.  You have been great, and together we will have a great future.” ABOUT MARTINREAMartinrea 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 operates in 57 locations in Canada, the United States, Mexico, Brazil, Germany, Slovakia, Spain, China, South Africa and Japan.   Martinrea’s vision is making lives better by being the best supplier we can be in the products we make and the services we provide. The Company’s mission is to make people’s lives better by: delivering outstanding quality products and services to our customers; providing meaningful opportunity, job satisfaction, and job security for our people; providing superior long-term investment returns to our stakeholders; and being positive contributors to our communities.  For more information on Martinrea, please visit www.martinrea.com. Follow Martinrea on Twitter and Facebook.FORWARD-LOOKING INFORMATIONSpecial Note Regarding Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of applicable Canadian securities laws including statements related to the growth or expectations of, improvements in, expansion of and/or guidance or outlook as to the expected impact of or duration of the COVID-19 pandemic, or as a result of any current or future government actions, on the Company’s financial position, its business and operations, on its employees, on the automotive industry, or on the business of any OEM or suppliers, the timing of, status and the expected restart and ramp up of operations, production volumes, the Company’s current and future strategy, priorities and response related to COVID-19; the expected economic impact resulting from COVID-19, the type of factors affecting the economic impact, including expectations as to revenue, sales, profit, adjusted operating income margin, restructuring costs and non-cash asset write-downs, the potential effects or issues relating to a prolonged pandemic or lockdown(s), including the financial impact on the Company, its business or operations and global impact, the growth of the Company, the strength, productivity, effectiveness, efficiency and competitiveness of the Company, including post-COVID-19 and restructuring the Metalsa acquired assets, pursuit of its strategies (including investing in the business), the ability to grow the business and serve customers as a financially strong company, as well as other forward-looking statements.  The words “continue”, “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “views”, “intend”, “believe”, “plan”, “outlook” 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 (FX), timing of product launches and operational improvements during the period and current Board approved budgets.  Certain forward-looking financial assumptions are presented as non-IFRS information, and we do not provide reconciliation to IFRS for such assumptions.  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 most recent Management Discussion and Analysis (including the Covid-19 pandemic) and Annual Information Form and other public filings which can found at www.sedar.com:North American and global economic and political conditions and epidemics or pandemics;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 and commodities;outsourcing and insourcing trends;the risk of increased costs associated with product warranty and recalls together with the associated liability;product development and technological change;the Company’s ability to enhance operations and manufacturing techniques;dependence on key personnel;limited financial resources/uncertainty of future financing/banking;risks associated with the integration of acquisitions;risks associated with private or public investment in technology companies;the risks associated with joint ventures;costs associated with rationalization of production facilities;launch and operational costs;labour relations matters;trade restrictions;changes in governmental regulations or laws including any changes to trade;litigation and regulatory compliance and investigations;quote and pricing assumptions;currency risk;fluctuations in operating results;internal controls over financial reporting and disclosure controls and procedures;environmental regulation and climate change;the impact of climate, political, social and economic risks, natural disasters and pandemics in the countries in which we operate or sell to, or from which we source production;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 markets;potential tax exposures;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;the cost of post-employment benefits;impairment charges; cybersecurity threats;the potential volatility of the Company’s share price; anddividends.These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements.  The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol “MRE”.For further information, please contact:Fred Di Tosto
Chief Financial Officer
Martinrea International Inc.
3210 Langstaff Road
Vaughan, Ontario  L4K 5B2

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