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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Martinrea International Inc. Reports First Quarter Results and Declares Dividend

May 2, 2019

TORONTO, May 02, 2019 (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 the release of its financial results for the first quarter ended March 31, 2019 and that it has declared a quarterly cash dividend of $0.045 per share.

HIGHLIGHTS

-- Total sales of $1.023 billion; production sales of $927 million -- Record quarterly diluted net earnings per share of $0.66 -- Record quarterly adjusted diluted net earnings per share(1) of $0.67 -- Quarterly adjusted operating income(1) margin of 8.2% -- Record first quarter adjusted EBITDA(1) -- New business awards of approximately $55 million in annualized sales at peak volumes -- Quarterly cash dividend of $0.045 per share declared -- $26 million in share repurchases in the quarter; normal course issuer bid completed

OVERVIEW

Pat D’Eramo, President and Chief Executive Officer, stated: “Our first quarter was a very strong one for Martinrea and our people, with quarterly sales over a billion dollars including tooling, and record earnings per share. In a year when the overall market is seeing some volume headwinds, and a number of suppliers have seen reduced margins and earnings, our margins and earnings have remained very solid. We are in the midst of a very heavy launch cycle, but launches are proceeding well. We continue to see heavy quoting activity, and in the past few weeks we have won approximately $55 million in annualized sales at peak volumes, including $40 million in a combination of lightweight structures and propulsion systems work on Ford’s new small pick-up truck to be assembled in Hermosillo, Mexico, approximately $10 million in additional product wins for the new Jeep Grand Cherokee, and some additional work from Toyota and Nissan. Our people are performing well, and we thank them for their efforts.”

Fred Di Tosto, Chief Financial Officer, stated: “Sales for the first quarter, excluding tooling sales of $96 million, were $927 million, in the mid range of our previously announced sales guidance. In the quarter, our adjusted net earnings per share, on a basic and diluted basis, was $0.67 per share, also in the mid range of our quarterly guidance and a record quarter. Adjusted operating income margin for the quarter was 8.2%, a good start to the year. Our balance sheet remains strong, as we look to maintain a leverage ratio of about 1.5:1 net debt:adjusted EBITDA excluding the impacts of IFRS 16, even while paying increased dividends, repurchasing a significant number of shares under our normal course issuer bid, making a strategic investment in NanoXplore, and investing in our operations to fund our future. The year 2019 is off to a solid start and we expect second quarter sales, excluding tooling sales, to be in the range of $870 million to $910 million, and adjusted net earnings per share in the range of $0.64 to $0.68 per share.”

1 The Company prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”). However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Company. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating the Company’s performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures include “Adjusted Net Income”, “Adjusted Net Earnings per Share (on a basic and diluted basis)”, “Adjusted Operating Income” and “Adjusted EBITDA”.

Rob Wildeboer, Executive Chairman, stated: “It is great to see 2019 off to a great start of what we believe will be another record year for Martinrea. We believe that our story in 2019 and 2020 will be a very good one, on both an absolute and relative basis. We are seeing some softness in automotive markets, and are doing well overall despite the headwinds. Our North American segment has done extremely well year to date despite some reduction in overall market volumes. The North American economy continues to perform positively, and the trade and tariff issues that we still face in our industry have had some negative effect, but limited in scope and severity. Our European segment saw steady sales and operating income year over year during the quarter, but there has been softness there in overall volumes and in the volumes of some key customers, whether caused by the Brexit uncertainty or the uncertain regulatory environment. We do see some continuing softness there. Our Rest of the World segment, while a very small part of our business, has had some major volume challenges, some regional and some with the volumes of our customers in the regions, being China and Brazil, resulting in reduced sales and losses for the segment. Our fluids plant in China and our aluminum Brazilian operations, in particular, have been negatively impacted by these volume headwinds. As such, we are currently contemplating downsizing these facilities to keep costs in line with sales and, ultimately, improving our competitiveness in these sometimes difficult markets. We are also seeing some supplier stress in the overall market, making some assets available. I am pleased to report that we recently acquired a small plant in Mississippi from Variform at a very attractive price, along with the related work for Nissan. We will buy assets when the values are compelling.”

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 first quarter ended March 31, 2019 (“MD&A”), the Company’s interim condensed consolidated financial statements for the first quarter ended March 31, 2019 (the “interim consolidated financial statements”) and the Company’s Annual Information Form for the year ended December 31, 2018, can be found at www.sedar.com.

Results of operations may include certain unusual and other items which have been separately disclosed, where appropriate, in order to provide a clear assessment of the underlying Company results. In addition to IFRS measures, management uses non-IFRS measures in the Company’s disclosures that it believes provide the most appropriate basis on which to evaluate the Company’s results.

OVERALL RESULTS

The following table sets out certain key financial metrics underlying the Company’s performance for the three months ended March 31, 2019 and 2018. Refer to the Company’s financial statements for the three months ended March 31, 2019 for a detailed account of the Company’s performance for the periods presented in the table below.

Three Three months months % ended ended $ Change Change March 31, March 31, 2019 2018 --------------------------------------------------- - ----------- - --------- -------- ------- Sales $ 1,023,161 $ 963,900 59,261 6.1 % Gross Margin 157,501 144,429 13,072 9.1 % Operating Income 83,463 78,441 5,022 6.4 % Net Income for the period $ 55,268 55,959 (691 ) (1.2 %) --------------------------------------------------- - --------- - - ------- - ------ - ---- -- Net Earnings per Share - Basic $ 0.66 $ 0.65 0.01 1.5 % --------------------------------------------------- - --------- - - ------- - ------ - ---- -- Net Earnings per Share - Diluted $ 0.66 $ 0.64 0.02 3.1 % --------------------------------------------------- - --------- - - ------- - ------ - ---- -- Non-IFRS Measures* Adjusted Operating Income $ 83,463 $ 78,441 5,022 6.4 % % of Sales 8.2 % 8.1 % Adjusted EBITDA 133,911 119,962 13,949 11.6 % % of Sales 13.1 % 12.4 % Adjusted Net Income 55,776 56,630 (854 ) (1.5 %) --------------------------------------------------- - --------- - - ------- - ------ - ---- -- Adjusted Net Earnings per Share - Basic and Diluted $ 0.67 $ 0.65 0.02 3.1 % --------------------------------------------------- - --------- - - ------- - ------ - ---- --

*Non-IFRS Measures

The Company prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”). However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and 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” and “Free Cash Flow”.

Impact of the Adoption of IFRS 16, Leases

Effective January 1, 2019, the Company adopted the new accounting standard, IFRS 16, Leases (“IFRS 16”). In adopting the new standard, the Company used the modified retrospective approach which involves recognizing transitional adjustments in opening retained earnings, if any, on the date of initial application without restating comparative prior periods. As such, 2018 prior year comparatives have not been restated.

The adoption of the new standard resulted in the recognition of lease liabilities of $228.6 million and right-of-use assets of $223.8 million, net of accrued liabilities related to the leases of $4.8 million, recognized as at January 1, 2019 in the interim condensed consolidated balance sheet. From an earnings perspective, while timing differences may exist, the new standard results in a decrease in operating rent expense essentially replaced by increases in finance and depreciation expenses as recognized in the interim condensed consolidated statement of operations. As such, the adoption of IFRS 16 did not have a significant impact on the Company’s operating results and the financial metrics for the quarter ended March 31, 2019 outlined above other than “Adjusted EBITDA”. The adoption of IFRS 16 contributed approximately 7% of the year-over-year growth in Adjusted EBITDA due to the recognition of depreciation expense on right-of-use assets, in lieu of operating rent expense, as required by the new standard. The adoption of the new standard is further explained in “Recently adopted and applicable accounting standards and policies” in the MD&A and note 1(d)(i) of the financial statements for the three months ended March 31, 2019.

The following tables provide a reconciliation of IFRS “Net Income” to Non-IFRS “Adjusted Net Income”, “Adjusted Operating Income” and “Adjusted EBITDA”.

Three months ended Three months ended March 31, 2019 March 31, 2018 ------------------------------------ - ------------------ - ------------------ Net Income $ 55,268 $ 55,959 Unusual and Other Items (after-tax)* 508 671 ------------------------------------ - ------------------ - ------------------ Adjusted Net Income $ 55,776 $ 56,630 ------------------------------------ - ------------------ - ------------------ *Unusual and other items are explained in the “Adjustments to Net Income” section of this Press Release

Three Three months months ended ended March 31, March 31, 2019 2018 --------------------------------------------------------------------- - --------- - --------- Net Income $ 55,268 $ 55,959 Income tax expense 18,385 17,953 Other finance income - excluding Unusual and Other Items* (567 ) (2,739 ) Finance expense 9,796 6,501 Unusual and Other Items (before-tax)* 581 767 --------------------------------------------------------------------- - ------- - - ------- - Adjusted Operating Income $ 83,463 $ 78,441 --------------------------------------------------------------------- - ------- - - ------- - Depreciation of property, plant and equipment and right-of-use assets 46,894 38,058 Amortization of intangible assets 3,665 3,477 Gain on disposal of property, plant and equipment (111 ) (14 ) --------------------------------------------------------------------- - ------- - - ------- - Adjusted EBITDA $ 133,911 $ 119,962 --------------------------------------------------------------------- - ------- - - ------- -

*Unusual and other items are explained in the “Adjustments to Net Income” section of this Press Release

SALES Three months ended March 31, 2019 to three months ended March 31, 2018 comparison ----------------- - ----------- - --------- --------- -------- Three Three months months ended ended $ Change % Change March 31, March 31, 2019 2018 ----------------- - ----------- - --------- --------- -------- North America $ 811,137 $ 741,155 69,982 9.4 % Europe 190,395 185,723 4,672 2.5 % Rest of the World 23,332 40,381 (17,049 ) (42.2 %) Eliminations (1,703 ) (3,359 ) 1,656 49.3 % ----------------- - --------- - - ------- - ------- - ----- -- Total Sales $ 1,023,161 $ 963,900 59,261 6.1 % ----------------- - --------- - - ------- - ------- - ----- --

The Company’s consolidated sales for the first quarter of 2019 increased by $59.3 million or 6.1% to $1,023.2 million as compared to $963.9 million for the first quarter of 2018. The total increase in sales was driven by year-over-year increases in the North America and Europe operating segments, partially offset by a decrease in the Rest of the World.

Sales for the first quarter of 2019 in the Company’s North America operating segment increased by $70.0 million or 9.4% to $811.1 million from $741.2 million for the first quarter of 2018. The increase was due to the launch of new programs during or subsequent to the first quarter of 2018 including the next generation GM Silverado/Sierra, RAM pick-up trucks, and the new Chevrolet Blazer; the impact of foreign exchange on the translation of U.S. denominated production sales, which had a positive impact on overall sales for the first quarter of 2019 of approximately $35.0 million as compared to the first quarter of 2018; and an increase in tooling sales of $20.7 million, which are typically dependant on the timing of tooling construction and final acceptance by the customer. These positive factors were partially offset by lower year-over-year production volumes on certain light-vehicle platforms including the Ford Escape and Jeep Wrangler, and programs that ended production during or subsequent to the first quarter of 2018.

Sales for the first quarter of 2019 in the Company’s Europe operating segment increased by $4.7 million or 2.5% to $190.4 million from $185.7 million for the first quarter of 2018. The increase can be attributed to the launch of new programs during or subsequent to the first quarter of 2018, including a 2.0L aluminum engine block for Ford, and a $9.4 million increase in tooling sales. These positive factors were partially offset by lower year-over-year production volumes on certain Jaguar Land Rover platforms, and a $1.3 million negative foreign exchange impact from the translation of Euro denominated production sales as compared to the first quarter of 2018.

Sales for the first quarter of 2019 in the Company’s Rest of the World operating segment decreased by $17.0 million or 42.2% to $23.3 million from $40.4 million in the first quarter of 2018. The decrease was due to a lower year-over-year production volumes on the Ford Mondeo and Cadillac CT6 vehicle platforms in China; lower year-over-year production sales in the Company’s facility in Brazil; a $5.4 million decrease in tooling sales; and a $1.0 million negative foreign exchange impact from the translation of foreign denominated production sales as compared to the first quarter of 2018. These negative factors were partially offset by the ramp up of new aluminum structural components work for Jaguar Land Rover in China, which began to ramp up in the first quarter of 2018 but at significantly lower-than-expected volumes.

Overall tooling sales increased by $24.7 million or 34.7% to $95.9 million for the first quarter of 2019 from $71.2 million for the first quarter of 2018.

GROSS MARGIN Three months ended March 31, 2019 to three months ended March 31, 2018 comparison ------------ - --------- - --------- -------- ----- Three Three months months % ended ended $ Change Change March 31, March 31, 2019 2018 ------------ - --------- - --------- -------- ----- Gross margin $ 157,501 $ 144,429 13,072 9.1 % % of Sales 15.4 % 15.0 % ------------ - ------- - - ------- - -------- -----

The gross margin percentage for the first quarter of 2019 of 15.4% increased as a percentage of sales by 0.4% as compared to the gross margin percentage for the first quarter of 2018 of 15.0%. The increase in gross margin as a percentage of sales was generally due to:

-- productivity and efficiency improvements at certain operating facilities; and -- general sales mix including new and replacement programs that launched, and old programs that ended production, during or subsequent to the first quarter of 2018.

These positive factors were partially offset by operational inefficiencies and other costs at certain other facilities including upfront costs incurred in preparation of upcoming new programs and related to new business in the process of being launched, and an increase in tooling sales which typically earn low margins for the Company.

ADJUSTMENTS TO NET INCOME

Adjusted Net Income excludes certain unusual and other items, as set out in the following table and described in the notes thereto. Management uses Adjusted Net Income as a measurement of operating performance of the Company and believes that, in conjunction with IFRS measures, it provides useful information about the financial performance and condition of the Company.

TABLE A Three months ended March 31, 2019 to three months ended March 31, 2018 comparison --------------------------------------------- --------- --------- ------- For the For the three three months months ended ended March 31, March 31, (a)-(b) 2019 2018 --------- --------- (a) (b) Change --------------------------------------------- --------- --------- ------- NET INCOME (A) $55,268 $55,959 ($691 ) Add Back - Unusual and Other Items: Unrealized loss on warrants (1) 581 767 (186 ) --------------------------------------------- --------- --------- ------- TOTAL UNUSUAL AND OTHER ITEMS BEFORE TAX $581 $767 ($186 ) Tax impact of above items (73 ) (96 ) 23 --------------------------------------------- --------- --------- ------- TOTAL UNUSUAL AND OTHER ITEMS-AFTER TAX (B) $508 $671 ($163 ) --------------------------------------------- --------- --------- ------- ADJUSTED NET INCOME (A + B) $55,776 $56,630 ($854 ) --------------------------------------------- ------- - ------- - ----- - Number of Shares Outstanding – Basic (’000) 83,364 86,746 Adjusted Basic Net Earnings Per Share $0.67 $0.65 Number of Shares Outstanding – Diluted (’000) 83,586 87,352 Adjusted Diluted Net Earnings Per Share $0.67 $0.65 --------------------------------------------- --------- --------- -------

1. Unrealized loss on warrants As further described in note 7 of the financial statements and later on in the MD&A under “Investments”, Martinrea holds 2,955,900 warrants in NanoXplore Inc., a publicly listed graphene company on the TSX Venture Exchange under the ticker symbol GRA. The warrants represent derivative instruments and are fair valued at the end of each reporting period using the Black-Scholes-Merton valuation model, with the change in fair value recorded through profit or loss. As at March 31, 2019, the warrants had a fair value of $1.6 million. Based on the fair value of the warrants as at March 31, 2019, an unrealized loss of $0.6 million was recognized for the three months ended March 31, 2019 (2018 - $0.8 million), in other finance income (expense) in the interim condensed consolidated statement of operations. This unrealized loss has been added back for Adjusted Net Income purposes.

NET INCOME Three months ended March 31, 2019 to three months ended March 31, 2018 comparison ----------------- - ------------------ - ------------------ ------ ------- Three months ended Three months ended $ % March 31, 2019 March 31, 2018 Change Change ----------------- - ------------------ - ------------------ ------ ------- Net Income $ 55,268 $ 55,959 (691 ) (1.2 %) Adjusted Net $ 55,776 $ 56,630 (854 ) (1.5 %) Income Net Earnings per Share Basic $ 0.66 $ 0.65 Diluted $ 0.66 $ 0.64 Adjusted Net Earnings per Share Basic and Diluted $ 0.67 $ 0.65 ----------------- - ------------------ - ------------------ ------ -------

Net income, before adjustments, for the first quarter of 2019 decreased by $0.7 million to $55.3 million from $56.0 million for the first quarter of 2018. Excluding the unusual and other items recognized during the first quarters of 2019 and 2018 as explained in Table A under “Adjustments to Net Income”, net income for the first quarter of 2019 decreased by $0.9 million to $55.8 million or $0.67 per share, on a basic and diluted basis, from $56.6 million or $0.65 per share, on a basic and diluted basis, for the first quarter of 2018. Despite the year-over-year decrease in Adjusted Net Income, Adjusted Net Earnings per share is up year-over-year due to the lower outstanding Martinrea share count as a result of the recent share repurchases the Company completed under a normal course issuer bid, as further explained in note 12 of the financial statements and later on in the MD&A under “Disclosure of Outstanding Share Data”.

Adjusted Net Income for the first quarter of 2019, as compared to the first quarter of 2018, was negatively impacted by the following:

-- operational inefficiencies and other costs at certain other facilities including upfront costs incurred in preparation of upcoming new programs and related to new business in the process of being launched; -- a year-over-year increase in research and development costs due to increased new product and process research and development activity; -- a year-over-year increase in SG&A expense; -- a year-over-year increase in depreciation expense, due to the adoption of IFRS 16; -- a year-over-year increase in finance expense on the Company’s revolving bank debt and equipment loans as a result of increased debt levels and borrowing rates, and interest on lease liabilities as a result of the adoption of IFRS 16; -- a net unrealized foreign exchange gain of $0.5 million for the first quarter of 2019 compared to a net unrealized foreign exchange gain of $2.7 million for the first quarter of 2018; and -- a higher effective tax rate on adjusted income due generally to the mix of earnings (24.9% for the first quarter of 2019 compared to 24.2% for the first quarter of 2018).

These factors were partially offset by the following:

-- higher gross profit on increased year-over-year sales as previously explained; -- productivity and efficiency improvements at certain operating facilities; -- general sales mix including new and replacement programs that launched, and old programs that ended production, during or subsequent to the first quarter of 2018; and -- lower operating rent expense due to the adoption of IFRS 16, generally replaced by increases in finance and depreciation expenses.

DIVIDEND

A cash dividend of $0.045 per share has been declared by the Board of Directors payable to shareholders of record on June 30, 2019, on or about July 15, 2019.

ABOUT MARTINREA

Martinrea International Inc. (TSX : MRE) 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 employs approximately 15,000 talented and motivated people in 47 operating divisions in Canada, the United States, Mexico, Brazil, Germany, Slovakia, Spain and China. Martinrea’s vision is to make 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.

CONFERENCE CALL DETAILS

A conference call to discuss the financial results will be held on Friday, May 3, 2019 at 8:00 a.m. (Toronto time) which can be accessed by dialing 416-340-2218 (international: 001-416-340-2218) or toll free 800-377-0758. Please call 10 minutes prior to the start of the conference call.

If you have any teleconferencing questions, please call Ganesh Iyer at 416-749-0314.

There will also be a rebroadcast of the call available by dialing 905-694-9451 (international: 001-905-694-9451) or toll free 800-408-3053 (conference id – 7108120#). The rebroadcast will be available until May 21, 2019.

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 statements related to the growth or expectations of, improvements or belief in, expansion of and/or guidance or outlook as to future revenue, sales, gross margin, earnings, and earnings per share (including as adjusted), operating income margins, a record 2019 and 2020 performance, strength of the Company, debt ratio, the intention to maintain a strong balance sheet , program wins, expected volumes, the ramping up and launching of new programs and the financial impact of launches, pursuit of its strategies, the payment of dividends, statements regarding softness in volumes, potential downsizing or restructuring in China and Brazil, the impact of trade issues and any uncertain regulatory environment, the acquisition of assets, 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 Annual Information Form and other public filings which can 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; -- 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 under-funding of pensions plans; -- the cost of post-employment benefits; -- impairment charges; -- cybersecurity threats; -- the potential volatility of the Company’s share price; and -- dividends.

These factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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

For further information, please contact:

Fred Di TostoChief Financial OfficerMartinrea International Inc.3210 Langstaff RoadVaughan, Ontario L4K 5B2

Tel: 416-749-0314Fax: 289-982-3001

Martinrea International Inc. Interim Condensed Consolidated Balance Sheets (in thousands of Canadian dollars) (unaudited) ---------------------------------------------- ---- - -------------- - ----------------- Note March 31, 2019 December 31, 2018 ---------------------------------------------- ---- - -------------- - ----------------- ASSETS Cash and cash equivalents $ 76,447 $ 70,162 Trade and other receivables 2 700,993 597,796 Inventories 3 468,452 492,759 Prepaid expenses and deposits 25,856 23,275 Income taxes recoverable 30,610 21,301 TOTAL CURRENT ASSETS 1,302,358 1,205,293 ---------------------------------------------- ---- - -------------- - ----------------- Property, plant and equipment 4 1,483,591 1,481,452 Right-of-use assets 5 216,349 - Deferred income tax assets 141,769 145,354 Intangible assets 6 68,399 70,931 Investments 7 24,313 10,781 TOTAL NON-CURRENT ASSETS 1,934,421 1,708,518 ---------------------------------------------- ---- - -------------- - ----------------- TOTAL ASSETS $ 3,236,779 $ 2,913,811 ---------------------------------------------- ---- - -------------- - ----------------- LIABILITIES Trade and other payables 8 $ 874,485 $ 862,699 Provisions 9 5,151 5,393 Income taxes payable 6,836 7,816 Current portion of long-term debt 10 16,445 16,804 Current portion of lease liabilities 11 28,581 - ---------------------------------------------- ---- - -------------- - ----------------- TOTAL CURRENT LIABILITIES 931,498 892,712 ---------------------------------------------- ---- - -------------- - ----------------- Long-term debt 10 793,107 723,913 Lease liabilities 11 193,173 - Pension and other post-retirement benefits 58,812 61,267 Deferred income tax liabilities 83,644 84,370 ---------------------------------------------- ---- - -------------- - ----------------- TOTAL NON-CURRENT LIABILITIES 1,128,736 869,550 ---------------------------------------------- ---- - -------------- - ----------------- TOTAL LIABILITIES 2,060,234 1,762,262 ---------------------------------------------- ---- - -------------- - ----------------- EQUITY Capital stock 12 681,451 680,157 Contributed surplus 41,958 42,016 Accumulated other comprehensive income 127,676 158,395 Retained earnings 325,460 270,981 ---------------------------------------------- ---- - -------------- - ----------------- TOTAL EQUITY 1,176,545 1,151,549 ---------------------------------------------- ---- - -------------- - ----------------- TOTAL LIABILITIES AND EQUITY $ 3,236,779 $ 2,913,811 ---------------------------------------------- ---- - -------------- - -----------------

Contingencies (note 18)

See accompanying notes to the interim condensed consolidated financial statements.

On behalf of the Board:

“Robert Wildeboer” Director

“Terry Lyons” Director

Martinrea International Inc. Interim Condensed Consolidated Statements of Operations (in thousands of Canadian dollars, except per share amounts) (unaudited) --------------------------------------------------------- ---- - -------------------- - -------------------- Three months ended Three months ended Note March 31, 2019 March 31, 2018 --------------------------------------------------------- ---- - ------------------ - - ------------------ - SALES $ 1,023,161 $ 963,900 --------------------------------------------------------- ---- - ------------------ - - ------------------ - Cost of sales (excluding depreciation of property, plant and equipment and right-of-use assets) (822,231 ) (783,859 ) Depreciation of property, plant and equipment and (43,429 ) (35,612 ) right-of-use assets (production) --------------------------------------------------------- ---- - ------------------ - - ------------------ - Total cost of sales (865,660 ) (819,471 ) --------------------------------------------------------- ---- - ------------------ - - ------------------ - GROSS MARGIN 157,501 144,429 --------------------------------------------------------- ---- - ------------------ - - ------------------ - Research and development costs (9,289 ) (6,684 ) Selling, general and administrative (60,858 ) (56,342 ) Depreciation of property, plant and equipment and (3,465 ) (2,446 ) right-of-use assets (non-production) Amortization of customer contracts and relationships (537 ) (530 ) Gain on disposal of property, plant and equipment 111 14 OPERATING INCOME 83,463 78,441 --------------------------------------------------------- ---- - ------------------ - - ------------------ - Finance expense (including interest on lease liabilities) 15 (9,796 ) (6,501 ) Other finance income (expense) 15 (14 ) 1,972 --------------------------------------------------------- ---- - ------------------ - - ------------------ - INCOME BEFORE INCOME TAXES 73,653 73,912 Income tax expense 13 (18,385 ) (17,953 ) --------------------------------------------------------- ---- - ------------------ - - ------------------ - NET INCOME FOR THE PERIOD $ 55,268 $ 55,959 --------------------------------------------------------- ---- - -------------------- - -------------------- Basic earnings per share 14 $ 0.66 $ 0.65 Diluted earnings per share 14 $ 0.66 $ 0.64 --------------------------------------------------------- ---- - ------------------ - - ------------------ -

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, except per share amounts) (unaudited) -------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2019 March 31, 2018 --------------------------------------------------------------- - ------------------ - - ------------------ - NET INCOME FOR THE PERIOD $ 55,268 $ 55,959 Other comprehensive income (loss), net of tax: Items that may be reclassified to net income Foreign currency translation differences for foreign operations (28,038 ) 39,433 Cash flow hedging derivative and non-derivative financial instruments: Unrealized gain in fair value of financial instruments 2,038 - Reclassification of losses to net income 371 - Items that will not be reclassified to net income Change in fair value of investments (776 ) (1,005 ) Transfer of unrealized gains on investments to retained earnings on change in (4,314 ) - accounting method (note 7) Remeasurement of defined benefit plans 1,085 2,075 --------------------------------------------------------------- - ------------------ - - ------------------ - Other comprehensive income (loss), net of tax (29,634 ) 40,503 ---------------------------------------------------------------- - ------------------ - - ------------------ - TOTAL COMPREHENSIVE INCOME FOR THE PERIOD $ 25,634 $ 96,462 ---------------------------------------------------------------- - ------------------ - - ------------------ -

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)

Accumulated other Contributed comprehensive Retained Capital stock surplus income earnings Total equity -------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - BALANCE AT DECEMBER 31, 2017 $ 713,425 $ 41,981 $ 94,268 $ 108,825 $ 958,499 ---------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - Net income for the period - - - 55,959 55,959 Compensation expense related - 174 - - 174 to stock options Dividends ($0.03 per share) - - - (2,602 ) (2,602 ) Other comprehensive income (loss), net of tax Remeasurement of defined - - - 2,075 2,075 benefit plans Foreign currency - - 39,433 - 39,433 translation differences Change in fair value of - - (1,005 ) - (1,005 ) investments --------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - BALANCE AT MARCH 31, 2018 713,425 42,155 132,696 164,257 1,052,533 ---------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - Net income for the period - - - 129,924 129,924 Compensation expense related - 477 - - 477 to stock options Dividends ($0.135 per share) - - - (11,611 ) (11,611 ) Exercise of employee stock 2,523 (616 ) - - 1,907 options Repurchase of common shares (17,699 ) - - (7,814 ) (25,513 ) Estimated repurchase of common shares subsequent to year-end under an automatic share repurchase program with a broker (18,092 ) - - (5,779 ) (23,871 ) Other comprehensive income (loss) net of tax Remeasurement of defined - - - 2,004 2,004 benefit plans Foreign currency - - 33,177 - 33,177 translation differences Change in fair value of - - (1,862 ) - (1,862 ) investments Cash flow hedging derivative and non-derivative financial instruments: Unrealized loss in fair value of financial - - (6,036 ) - (6,036 ) instruments Reclassification of losses - - 420 - 420 to net income -------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - BALANCE AT DECEMBER 31, 2018 680,157 42,016 158,395 270,981 1,151,549 ---------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - Net income for the period - - - 55,268 55,268 Compensation expense related - 314 - - 314 to stock options Dividends ($0.045 per share) - - - (3,724 ) (3,724 ) Exercise of employee stock 1,294 (372 ) - - 922 options Repurchase of common shares - - - (2,464 ) (2,464 ) Other comprehensive income (loss) net of tax Remeasurement of defined - - - 1,085 1,085 benefit plans Foreign currency - - (28,038 ) - (28,038 ) translation differences Change in fair value of - - (776 ) - (776 ) investments Transfer of unrealized gains on investments to retained earnings on change in - - (4,314 ) 4,314 - accounting method Cash flow hedging derivative and non-derivative financial instruments: Unrealized gain in fair value of financial - - 2,038 - 2,038 instruments Reclassification of losses - - 371 - 371 to net income -------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ - BALANCE AT MARCH 31, 2019 $ 681,451 $ 41,958 $ 127,676 $ 325,460 $ 1,176,545 ---------------------------- - ------------- - - ----------- - - ------------- - - -------- - - ------------ -

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, except per share amounts) (unaudited) ------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2019 March 31, 2018 ------------------------------------------------------------- - ------------------ - - ------------------ - CASH PROVIDED BY (USED IN): OPERATING ACTIVITIES: Net Income for the period $ 55,268 $ 55,959 Adjustments for: Depreciation of property, plant and equipment and right-of-use 46,894 38,058 assets Amortization of customer contracts and relationships 537 530 Amortization of development costs 3,128 2,947 Unrealized loss (gain) on foreign exchange forward contracts 583 (1,304 ) Unrealized loss on warrants (note 7) 581 767 Finance expense (including interest on lease liabilities) 9,796 6,501 Income tax expense 18,385 17,953 Gain on disposal of property, plant and equipment (111 ) (14 ) Deferred and restricted share units expense 2,132 302 Stock options expense 314 174 Pension and other post-retirement benefits expense 1,023 1,177 Contributions made to pension and other post-retirement (1,258 ) (643 ) benefits -------------------------------------------------------------- - ------------------ - - ------------------ - 137,272 122,407 Changes in non-cash working capital items: Trade and other receivables (112,987 ) (72,686 ) Inventories 16,067 (36,415 ) Prepaid expenses and deposits (2,952 ) (3,079 ) Trade, other payables and provisions 61,775 100,176 99,175 110,403 Interest paid (including interest on lease liabilities; (10,584 ) (6,933 ) excluding capitalized interest) Income taxes paid (28,465 ) (31,678 ) -------------------------------------------------------------- - ------------------ - - ------------------ - NET CASH PROVIDED BY OPERATING ACTIVITIES $ 60,126 $ 71,792 --------------------------------------------------------------- - ------------------ - - ------------------ - FINANCING ACTIVITIES: Repurchase of common shares (26,335 ) - Increase in long-term debt 81,420 19,689 Repayment of long-term debt (4,081 ) (5,279 ) Principal payments of lease liabilities (7,275 ) - Dividends paid (3,817 ) (2,602 ) Exercise of employee stock options 922 - -------------------------------------------------------------- - ------------------ - - ------------------ - NET CASH PROVIDED BY FINANCING ACTIVITIES $ 40,834 $ 11,808 --------------------------------------------------------------- - ------------------ - - ------------------ - INVESTING ACTIVITIES: Purchase of property, plant and equipment* (77,418 ) (71,453 ) Capitalized development costs (2,316 ) (2,992 ) Investment in NanoXplore Inc. (note 7) (14,999 ) (680 ) Proceeds on disposal of property, plant and equipment 483 770 NET CASH USED IN INVESTING ACTIVITIES $ (94,250 ) $ (74,355 ) --------------------------------------------------------------- - ------------------ - - ------------------ - Effect of foreign exchange rate changes on cash and cash (425 ) 957 equivalents --------------------------------------------------------------- - ------------------ - - ------------------ - INCREASE IN CASH AND CASH EQUIVALENTS 6,285 10,202 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 70,162 71,193 --------------------------------------------------------------- - ------------------ - - ------------------ - CASH AND CASH EQUIVALENTS, END OF PERIOD $ 76,447 $ 81,395 --------------------------------------------------------------- - ------------------ - - ------------------ -

*As at March 31, 2019, $36,236 (December 31, 2018 - $45,341) of purchases of property, plant and equipment remain unpaid and are recorded in trade and other payables and provisions.

See accompanying notes to the interim condensed consolidated financial statements.