Martinrea International Inc. Releases Q1 2013 Results and Announces Dividend Policy

TORONTO, ONTARIO--(Marketwired - May 2, 2013) - Martinrea International Inc. (TSX:MRE), a leader in the production of quality metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector, announced today the release of its financial results for the first quarter ended March 31, 2013.

Martinrea currently employs over 12,000 skilled and motivated people in 37 plants in Canada, the United States, Mexico, Brazil, Europe, and China. All amounts in this press release are in Canadian dollars, unless otherwise stated; and all tabular amounts are in thousands of Canadian dollars, except earnings per share and number of shares.

Additional information about the Company, including the Company's Management Discussion and Analysis of Operating Results and Financial Position for the first quarter ended March 31, 2013 ("Press Release") dated as of May 2, 2013, the Company's unaudited consolidated financial statements for the first quarter ended March 31, 2013 (the "unaudited consolidated financial statements") and the Company's Annual Information Form for the financial year ended December 31, 2012, can be found at www.sedar.com.

Non-IFRS Measures

The Company prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS"). However, the Company has included certain non-IFRS financial measures and ratios in this Press Release that the Company believes will provide useful information in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to the other financial measures determined in accordance with IFRS. Non-IFRS measures referred to in the analysis include "adjusted net earnings" and "adjusted earnings per share on a basic and diluted basis", and are defined in Tables A and B under "Adjustments to Net Income" of this Press Release.

REVENUE

First Quarter 2013 to First Quarter 2012 comparison
		Three months ended March 31, 2013		Three months ended March 31, 2012	Change		% Change
North America	$	610,531	$	568,366	42,165		7.4	%
Europe		141,811		153,281	(11,470	)	(7.5	%)
Rest of World		16,780		14,007	2,773		19.8	%
Revenue	$	769,122	$	735,654	33,468		4.5	%

The Company's consolidated revenues for the first quarter of 2013 increased by $33.5 million or 4.5% to $769.1 million as compared to $735.7 million for the first quarter of 2012. The total overall increase in revenues was driven by increases in the Company's North America and Rest of World operating segments partially offset by a decrease in revenue in Europe.

Revenues for the first quarter of 2013 in the Company's North America operating segment increased by $42.2 million or 7.4% to $610.5 million from $568.4 million during the first quarter of 2012. The increase was generally due to the launch of new programs during or subsequent to the second quarter of 2012, including the Ford Escape and Fusion programs, among others. The increase was partially offset by a $9.4 million decline in tooling revenues, which is typically dependent on the timing of tooling construction and final inspection and acceptance by the customer, and the impact of foreign exchange on the translation of U.S. dollar denominated revenue, which had a negative impact on revenue for the first quarter of 2013 of $6.2 million in comparison to the first quarter of 2012.

Revenues for the first quarter of 2013 in the Company's Europe operating segment, comprised predominantly of the European operations of Martinrea Honsel, decreased by $11.5 million or 7.5% to $141.8 million from $153.3 million during the first quarter of 2012. The decrease in revenues in Europe was primarily due to a year-over-year decline in overall OEM light and medium-heavy vehicle production in Europe and the impact of foreign exchange on the translation of Euro denominated revenue, which had a negative impact on revenue for the first quarter of 2013 of $0.5 million in comparison to the first quarter of 2012, partially offset by a year-over-year increase in tooling revenues of $6.0 million.

Revenues for the first quarter of 2013 in the Company's Rest of World operating segment, currently comprised of the Brazilian operations of Martinrea Honsel and a start-up facility in China in its early stages, increased by $2.8 million or 19.8% to $16.8 million as compared to $14.0 million for the first quarter of 2012. The increase can be attributed to an increase in OEM light and medium-heavy vehicle production in Brazil and a year-over-year increase in tooling revenues of $2.2 million. The increase in revenues in the Rest of World operating segment would have been higher had it not been for the translation of Brazilian Real denominated revenue which had a negative impact on revenue for the first quarter of 2013 of $2.3 million as compared to the first quarter of 2012.

Overall tooling revenues remained relatively comparable year-over-year decreasing slightly by $1.2 million from $51.9 million for the first quarter of 2012 to $50.7 million for the first quarter of 2013.

First Quarter 2013 to Fourth Quarter 2012 comparison

		Three months ended March 31, 2013		Three months ended December 31, 2012	Change	% Change
North America	$	610,531	$	566,200	44,331	7.8	%
Europe		141,811		127,246	14,565	11.4	%
Rest of World		16,780		12,154	4,626	38.1	%
Revenue	$	769,122	$	705,600	63,522	9.0	%

The Company's consolidated revenues for the first quarter of 2013 increased by $63.5 million or 9.0% to $769.1 million as compared to $705.6 million for the fourth quarter of 2012. Revenue increased quarter-over-quarter in all operating segments.

Revenues for the first quarter of 2013 in the Company's North America operating segment increased by $44.3 million or 7.8% to $610.5 million from $566.2 million during the fourth quarter of 2012. Revenues for North America for the first quarter of 2013 were positively impacted by an $18.6 million increase in tooling revenues, which is typically dependent on the timing of tooling construction and final inspection and acceptance by the customer, and a $4.4 million benefit from the impact of foreign exchange on the translation of U.S. dollar denominated revenue. Excluding these items, revenues for the North America operating segment increased by $21.3 million or 3.8%, comparing favourably with overall North American light vehicle production for the first quarter of 2013, which increased sequentially by approximately 1.8%. The quarter-over-quarter increase in revenues in the Company's North America operating segment deviated favourably from the overall increase in North American OEM light vehicle production due generally to a favourable sales mix, including the continued ramp up of the new Ford Fusion program, which launched in Mexico during the second half of 2012 but did not reach full production volumes until the first quarter of 2013, and higher volume on GM's Equinox program.

Revenues for the first quarter of 2013 in the Company's Europe operating segment, comprised predominantly of the European operations of Martinrea Honsel, increased by $14.6 million or 11.4% to $141.8 million from $127.2 million during the fourth quarter of 2012. The increase was due to the launch of new incremental aluminum business with Jaguar Landrover, a $5.3 million benefit from the impact of foreign exchange on the translation of Euro denominated revenue, and generally higher quarter-over-quarter production volumes in Germany and Spain, which deviated favourably from the overall trend in OEM light vehicle and engine production in Europe due to the Company's high concentration of business in Europe geared to the luxury vehicle segment reliant on export outside the Euro zone. The increase in quarter-over-quarter revenues in Europe would have been higher had it not been for a $6.3 million decrease in tooling revenues, which is dependent on the timing of tooling construction and final inspection and acceptance by the customer.

Revenues for the first quarter of 2013 in the Company's Rest of World operating segment, currently comprised of the Brazilian operations of Martinrea Honsel and a start-up facility in China in its early stages, increased by $4.6 million or 38.1% to $16.8 million as compared to $12.2 million for the fourth quarter of 2012. The increase can generally be attributed to an overall increase in OEM light and medium-heavy vehicle production in Brazil and a quarter-over-quarter increase in tooling revenue of $1.8 million.

Overall tooling revenues increased by $14.1 million from $36.6 million for the fourth quarter of 2012 to $50.7 million for the first quarter of 2013.

GROSS MARGIN

First Quarter 2013 to First Quarter 2012 comparison
		Three months ended March 31, 2013			Three months ended March 31, 2012		Change		% Change
Gross margin	$	75,715		$	80,309		(4,594	)	(5.7	%)
% of revenue		9.8	%		10.9	%

The gross margin percentage for the first quarter of 2013 of 9.8% decreased as a percentage of revenue by 1.1% as compared to the gross margin percentage for the first quarter of 2012 of 10.9%.

The gross margin percentage for the first quarter of 2013 as compared to the first quarter of 2012 was negatively impacted by an increase in integrator or assembly work which typically generates lower margins, as further explained below, and lower capacity utilization from a year-over-year decrease in production volumes in Europe, the impact of which was partially mitigated by the workforce reductions in Germany completed during 2012. The Company continues to focus on improving the productivity and efficiency of the German operations to make it cost competitive for future growth. Further, launch costs and other launch-related operational expenses at the Company's operating facilities in Shelbyville, Kentucky and Hopkinsville, Kentucky, stemming predominantly from the Ford Escape launch during the second half of 2012, continued to impact the gross margin for the quarter, however, much progress has been made in improving efficiencies at these two facilities. Shelbyville was profitable for the Company during the first quarter of 2013 and continues to improve. Hopkinsville was not profitable during the quarter but costs at this facility continue to subside as operational improvements are made. Both plants are focused on cost reduction and improving cycle times with the objective of further expanding margin.

The Ford Escape business consists of approximately $150 million annually in value added internally produced components (some of which are or will be manufactured by other Martinrea facilities) and $125 million annually in components purchased from other suppliers that will be integrated with internally produced components to produce finished welded assemblies. The gross margins on components purchased from other suppliers are typically lower than for value added work, although return on capital is higher. With the launch of the Ford Escape program, approximately 25% of Martinrea's business excluding Martinrea Honsel involves integrator or assembly work.

First Quarter 2013 to Fourth Quarter 2012 comparison

		Three months ended March 31, 2013			Three months ended December 31, 2012		Change	% Change
Gross margin	$	75,715		$	61,834		13,881	22.4	%
% of revenue		9.8	%		8.8	%

Gross margin percentage for the first quarter of 2013 of 9.8% increased as a percentage of revenue by 1.0% as compared to the gross margin percentage for the fourth quarter of 2012 of 8.8%.

The gross margin percentage for the first quarter of 2013 was positively impacted by new program launches, including the Ford Fusion program which successfully launched in Mexico during the second half of 2012 and is a positive contributor to the Company's gross margin and net earnings. Gross margin will continue to be positively impacted by new program launches as the Company works through the launch of a significant backlog of business over the next thirty months which includes the following programs: the next wave of Ford CD4 in China, Europe and North America, Ford Transit, Ford 2.3L aluminum engine block, GM K2XX (pick-ups and SUVs), GM Omega aluminum engine cradle, GM 31XX (small pick-ups), Chrysler 200, Jaguar Landrover aluminum swivel bearing, Nissan aluminum I4 engine block, and the engine cradles for the VW Golf and BMW X5.

The quarter-over-quarter increase in gross margin percentage can also be attributed to higher capacity utilization from increased quarter-over-quarter production volumes in all operating segments and ongoing productivity and efficiency improvements at certain North American and European operating facilities, including cost savings from the workforce reductions in Germany completed at the end of 2012 and a reduction in launch costs and other launch-related operational expenses in Shelbyville and Hopkinsville stemming from the significant ramp up of new program launches during the second half of 2012, as discussed above. The continued elimination of the these launch costs and other launch-related operational expenses is expected to result in further margin expansion as the Shelbyville and Hopkinsville plants continue to focus on cost reduction and improving cycle times. The increase in Martinrea's gross margin percentage for the first quarter of 2013 compared to the fourth quarter of 2012 would have been higher if not for a $14.1 million increase in tooling revenues, which typically earns low or no margins for the Company.

ADJUSTMENTS TO NET INCOME

(ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)

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

TABLE A - First Quarter 2013 to First Quarter 2012 comparison
	Three months ended		Three months ended
	March 31, 2013		March 31, 2012
	(a)		(b)		(a)-(b) Change
NET EARNINGS (A)	19,888		23,055		(3,167	)
Add back - Unusual Items:
Employee Related Severance Costs (1)	-		846		(846	)
Other Restructuring Costs (1)	-		1,318		(1,318	)
Add back - Other Items:
Transaction costs associated with the Honsel acquisition recorded as SG&A (3)	-		581		(581	)
TOTAL UNUSUAL AND OTHER ITEMS BEFORE TAX	-		2,745		(2,745	)
Tax impact of above items	-		(528	)	528
Non-controlling interest on above items, after tax	-		(535	)	535
TOTAL UNUSUAL AND OTHER ITEMS AFTER TAX (B)	-		1,682		(1,682	)
ADJUSTED NET EARNINGS (A + B)	19,888		24,737		(4,849	)
Number of Shares Outstanding - Basic ('000)	83,757		82,907
Adjusted Basic Earnings Per Share	0.24		0.30
Number of Shares Outstanding - Diluted ('000)	84,364		83,591
Adjusted Diluted Earnings Per Share	0.24		0.30

TABLE B - First Quarter 2013 to Fourth Quarter 2012 comparison
	Three months ended		Three months ended
	March 31, 2013		December 31, 2012
	(a)		(b)			(a-b) Change
NET EARNINGS (A)	19,888		(6,625	)		26,513
Add back - Unusual Items:
Employee Related severance Costs (1)	-		24,122			(24,122	)
Other Restructuring Costs (1)	-		3,622			(3,622	)
Add back - Other Items:
Settlement of customer chargebacks recorded as SG&A(2)	-		4,901			(4,901	)
TOTAL UNUSUAL AND OTHER ITEMS BEFORE TAX	-		32,645			(32,645	)
Tax impact of above items	-		(1,683	)		1,683
Non-controlling interest in above items, net of tax	-		(11,708	)		11,708
TOTAL UNUSUAL AND OTHER ITEMS AFTER TAX (B)	-		19,254			(19,254	)
ADJUSTED NET EARNINGS (A + B)	19,888		12,629			7,259
Number of Shares Outstanding - Basic ('000)	83,757		82,995
Adjusted Basic Earnings Per Share	0.24		0.15
Number of Shares Outstanding - Diluted ('000)	84,364		83,285
Adjusted Diluted Earnings Per Share	0.24		0.15

(1) Employee related severance and other restructuring costs

As part of the acquisition of Honsel, a certain level of restructuring was planned in order to be cost competitive over the long term, in particular at the Company's German facilities in Meschede and Soest. The restructuring efforts commenced immediately after the closing of the acquisition on July 29, 2011. In connection with these restructuring activities, $0.6 million of primarily employee related severance was recognized during the first quarter of 2012 and $26.0 million during the fourth quarter of 2012. No such costs were incurred during the first quarter of 2013. However, additional employee related severance associated with the Martinrea Honsel operations may be incurred during the remainder of 2013.

In addition, during the fourth quarter of 2011, the Company began the process of closing one of its small operating facilities in Mexico. The existing business and equipment of this facility was moved to other Company facilities in Mexico including a new facility the Company opened in Silao, Mexico in 2011. Restructuring costs relating to this closure amounted to $1.6 million for the first quarter 2012 and $1.5 million for the fourth quarter of 2012, consisting primarily of employee related severance and the dismantling and transporting of PP&E between Company facilities. The closure of this facility was completed during the fourth quarter of 2012. As such, no further costs related to this closure are expected to be incurred.

Costs associated with other restructuring activities totaled $0.3 million during the first quarter of 2012, relating to the right sizing of certain other manufacturing facilities.

(2) Settlement of Customer Chargebacks

In conjunction with the surge in customer volume requirements related to the significant launch activity in the U.S during the second half of 2012 as previously discussed, the Company incurred $4.9 million in customer chargebacks relating mainly to customer production downtime and premium freight costs paid by the customer. The charges were settled with the corresponding customers and expensed during the fourth quarter of 2012.

(3) Transaction and integration costs associated with the acquisition of Honsel

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

NET EARNINGS
(ATTIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)
First Quarter 2013 to First Quarter 2012 comparison
			Three months ended March 31, 2013			Three months ended March 31, 2012	Change			% Change
Net Earnings		$	19,888		$	23,055	(3,167	)		(13.7	%)
Adjusted net earnings		$	19,888		$	24,737	(4,849	)		(19.6	%)
Earnings per common share
	Basic	$	0.24		$	0.28
	Diluted	$	0.24		$	0.28
Adjusted earnings per common share
	Basic	$	0.24		$	0.30
	Diluted	$	0.24		$	0.30

Net earnings for the first quarter of 2013 of $19.9 million decreased by $3.2 million from $23.1 million for the first quarter of 2012, before adjustments. Excluding unusual and other items incurred during the first quarter of 2012 as explained in Table A under "Adjustments to Net Income", the net earnings for the first quarter of 2013 decreased to $19.9 million or $0.24 per share, on a basic and diluted basis, from $24.7 million or $0.30 per share, on a basic and diluted basis, for the first quarter of 2012.

The adjusted net earnings for the first quarter of 2013, as compared to the first quarter of 2012, were positively impacted by the launch of new programs in North America during or subsequent to the first quarter of 2012, which included the Ford Fusion program. The positive impact was more than offset by launch costs and other launch-related operational expenses at the Company's operating facilities in Shelbyville and Hopkinsville, as previously discussed, and year-over-year increases in depreciation and amortization expense, SG&A expense and interest expense on higher debt levels. Further, the contribution of Martinrea Honsel to net earnings decreased from $0.06 per share in the first quarter of 2012 to $0.04 per share in the first quarter of 2013, due mainly to the year-over-year decrease in OEM light and medium-heavy vehicle production volumes in Europe, the impact of which was partially mitigated by cost savings from the workforce reductions in Germany completed during 2012. The Company continues to focus on improving the productivity and efficiency of the German operations to make it cost competitive for future growth.

First Quarter 2013 to Fourth Quarter 2012 comparison

			Three months ended March 31, 2013			Three months ended December 31, 2012		Change		% Change
Net Earnings		$	19,888		$	(6,625	)	26,513		400.2	%
Adjusted net earnings		$	19,888		$	12,629		7,259		57.5	%
Earnings per common share
	Basic	$	0.24		$	(0.08	)
	Diluted	$	0.24		$	(0.08	)
Adjusted earnings per common share
	Basic	$	0.24		$	0.15
	Diluted	$	0.24		$	0.15

Net earnings, before adjustments, for the first quarter of 2013 of $19.9 million increased by $26.5 million from a net loss of $6.6 million for the fourth quarter of 2012. Excluding unusual and other items incurred during the fourth quarter of 2012, as explained in Table B under "Adjustments to Net Income", the net earnings for the first quarter of 2013 increased to $19.9 million or $0.24 per share, on a basic and diluted basis, in comparison to adjusted net earnings of $12.6 million or $0.15 per share, on a basic and diluted basis, for the fourth quarter of 2012.

The adjusted net earnings for the first quarter of 2013, as compared to the fourth quarter of 2012, were positively impacted by increased quarter-over-quarter production volumes in all operating segments, a decrease in quarter-over-quarter SG&A expense as previously noted, and a reduction in launch costs and other launch-related operational expenses at the Company's operating facilities in Shelbyville and Hopkinsville, as previously discussed. Further, the contribution of Martinrea Honsel to net earnings increased from $0.01 per share in the fourth quarter of 2012 to $0.04 per share in the first quarter of 2013, due mainly to increased production volumes in Europe and Brazil, and cost savings from the workforce reduction in Germany completed at the end of 2012.

CAPITAL EXPENDITURES

First Quarter 2013 to First Quarter 2012 comparison
		Three months ended March 31, 2013			Three months ended March 31, 2012	Change	% Change
Capital Expenditures	$	56,705		$	34,233	22,472	65.6	%

Capital expenditures on PP&E increased by $22.5 million to $56.7 million in the first quarter of 2013 from $34.2 million in the first quarter of 2012. While capital expenditures are made to refurbish or replace assets consumed in the normal course of business and for productivity improvements, the increase is primarily due to the purchase of new program equipment in response to newly awarded business.

First Quarter 2013 to Fourth Quarter 2012 comparison

		Three months ended March 31, 2013		Three months ended December 31, 2012	Change		% Change
Capital Expenditures	$	56,705	$	57,503	(798	)	(1.4	%)

Capital expenditures on PP&E decreased slightly by $0.8 million to $56.7 million in the first quarter of 2013 from $57.5 million in the fourth quarter of 2012. Capital expenditures incurred in both the first quarter of 2013 and fourth quarter of 2012 relate mainly to the purchase of new program equipment for newly awarded business currently ramping up and scheduled to launch over the next twelve to twenty-four months.

Martinrea also announced that as part of the Company's long-term strategy to maximize shareholder value, its board of directors has approved a policy to commence quarterly dividend payments in the amount of $0.03 per share ($0.12 on an annualized basis). It is anticipated that the first quarterly dividend of $0.03 per share will be issued to shareholders of record as of June 30, 2013, and will be paid in July, 2013.

The declaration and payment of future dividends will be subject to the Company's cash requirements as well as the satisfaction of statutory tests. In addition, the Board will assess future year's dividend payout levels, from time to time, in light of the Company's financial performance and then current and anticipated business needs at that time.

Nick Orlando, Martinrea's President and Chief Executive Officer, stated: "I am pleased with our first quarter results. We are seeing a return to better profitability in our North American operations and Martinrea Honsel showed significant improvement from the fourth quarter also. The operational improvements we have been making at our plants, especially those that experienced significant launch activity in the second half of 2012 and year to date, are having an impact quarter over quarter and we are seeing that in our financial results. Our Shelbyville plant is now profitable and we continue to see improvements in our Hopkinsville facility, which is not yet profitable. I do note that we have a number of our plants experiencing all-time highs in revenues and returns also. In 2012, which we refer to as the year of the launch for us, we launched many programs, and all those plants that launched new business are rounding into form. For example, the work related to the Ford Fusion, a very good and smooth launch for us, is now contributing positively for us in a number of plants in Mexico and elsewhere. In our Martinrea Honsel operations in Germany, we have taken many steps to rationalize the facility, and so now we are seeing better margins despite lower revenues related to the slowdown in Europe. We are a company that focuses on continuous improvement and cost reduction at all times, and we are making progress. We continue to quote new business for the future, and in addition to the $85 million in annualized revenue awards just announced on March 20, 2013, we are pleased to announce that we have also just won a new aluminum transmission housing for Daimler launching in 2015 with anticipated annual revenues of $20 million."

Fred Di Tosto, Martinrea's Chief Financial Officer, stated: "Revenues for our first quarter, excluding $51 million in tooling revenues, were approximately $718 million, within our quarterly sales guidance previously provided, and record first quarter revenues for us. In the first quarter of 2013, our earnings per share on a basic and diluted basis was $0.24, within our quarterly earnings guidance, and a nice improvement from the $0.15 in adjusted earnings per share generated in the fourth quarter of 2012. We are pleased to announce that we did not have any unusual or other items to report in the first quarter. Our Martinrea Honsel operations contributed $0.04 per share to our first quarter earnings, an increase over the fourth quarter of 2012, where the operations generated $0.01 in adjusted earnings per share, and this despite continuing softness in overall European volumes. A number of the efficiencies we have made in Europe, especially in workforce adjustments in Germany, are taking hold. Brazil continues to be a soft spot, but we believe volumes will increase over time. In addition, we saw gross margin increase as a percentage of revenue by 1% quarter-over-quarter to 9.8%. We expect gross margin to continue to improve as new programs continue to come on line and as the launch costs and other launch-related operational expenses in Shelbyville and Hopkinsville continue to subside."

Rob Wildeboer, Martinrea's Executive Chairman, stated: "The 2013 financial year is off to a solid start, and we believe it will be a record year for revenues and earnings for us. Our second quarter is expected to generate record revenues (excluding tooling revenues) in the range of $750 to $770 million, and we believe our earnings per share will be in the range of 30 to 34 cents per share, an upward trend from our first quarter and a record quarter for us from an earnings perspective. As with the first quarter, we do not expect any significant unusual or other items to report."

Mr. Wildeboer added: "As a company we remain focused on growing shareholder value over time, by making good decisions to grow our business profitably and prudently over the long term. We have made significant capital investments in our company, that we believe are paying off. We are pleased that the evolution of Martinrea has enabled us to introduce a dividend policy. This dividend policy is an important milestone because it is the first in the company's history and comes as a consequence of Martinrea's focus on shareholder returns, capital discipline and financial strength. On the basis of this strength, the board has determined that Martinrea is now in a position, not only to continue to invest in its business and growth, but also to adopt a modest dividend policy at this time that will provide an additional return to our shareholders."

Forward-Looking Information

Special Note Regarding Forward-Looking Statements

This Press Release contains forward-looking statements within the meaning of applicable Canadian securities laws including related to the Company's expectations as to revenue and gross margin percentage and earnings per share (and the expectation as to absence of unusual items, including earnings and revenue guidance), statements as to the growth of the Company and pursuit of its strategies, statements as to the payment of dividends, the launching of new metal forming and fluid systems programs including expectations as to the financial impact of launches and new business awards, and statements as to the progress of operational improvements and the continuation of operational efficiencies (including at the Shelbyville and Hopkinsville plants), the opportunity to increase volumes, sales, statements regarding the continuation of monitoring, managing and rationalization of expenses (including of Martinrea Honsel), the reduction in certain costs (including the reduction of costs due to operational improvements), the Company's expectations regarding the future amount and type of restructuring expenses to be expensed (including Martinrea Honsel), the Company's view on the financial viability of its customers, the Company's views on the long term outlook of the automotive industry, and corresponding increased volumes sales and production, statements as to the benefits of the Honsel acquisition and the Company's ability to capitalize on opportunities in the automotive industry, second quarter 2013 revenue and earnings per share estimates and as well as other forward-looking statements. The words "continue", "expect", "anticipate", "estimate", "may", "will", "should", "views", "intend", "believe", "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Many factors could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, some of which are discussed in detail in the Company's Annual Information Form and other public filings which can be found at www.sedar.com:

• North American and global economic and political conditions;
• the highly cyclical nature of the automotive industry and the industry's dependence on consumer spending and general economic conditions;
• the Company's dependence on a limited number of significant customers;
• financial viability of suppliers;
• the Company's reliance on critical suppliers and on suppliers for components and the risk that suppliers will not be able to supply components on a timely basis or in sufficient quantities;
• competition;
• the increasing pressure on the Company to absorb costs related to product design and development, engineering, program management, prototypes, validation and tooling;
• increased pricing of raw materials;
• outsourcing and insourcing trends;
• the risk of increased costs associated with product warranty and recalls together with the associated liability;
• the Company's ability to enhance operations and manufacturing techniques;
• dependence on key personnel;
• limited financial resources;
• risks associated with the integration of acquisitions;
• costs associated with rationalization of production facilities;
• launch costs;
• the potential volatility of the Company's share price;
• changes in governmental regulations or laws including any changes to the North American Free Trade Agreement;
• labour disputes;
• litigation;
• currency risk;
• fluctuations in operating results;
• internal controls over financial reporting and disclosure controls and procedures;
• environmental regulation;
• a shift away from technologies in which the Company is investing;
• competition with low cost countries;
• the Company's ability to shift its manufacturing footprint to take advantage of opportunities in emerging markets;
• risks of conducting business in foreign countries, including China, Brazil and other growing markets;
• potential tax exposure;
• a change in the Company's mix of earnings between jurisdictions with lower tax rates and those with higher tax rates, as well as the Company's ability to fully benefit from tax losses;
• under-funding of pension plans; and
• the cost of post-employment benefits.

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

A conference call to discuss these results will be held on Friday, May 3, 2013 at 8:00 a.m. (Toronto time) which can be accessed by dialing 416.340.8410 or toll free 866.225.2055. Please call 10 minutes prior to the start of the conference call.

If you have any teleconferencing questions, please call Andre La Rosa at (416) 749-0314.

There will also be a rebroadcast of the call available by dialing 905.694.9451 or 800.408.3053 (conference id 4555837#). The rebroadcast will be available until May 17, 2013.

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

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2013

Martinrea International Inc.

Condensed Consolidated Balance Sheets

(in thousands of Canadian dollars) (unaudited)

	Note	March 31, 2013		December 31, 2012
ASSETS
Cash and cash equivalents		$	21,614	$	29,422
Trade and other receivables	4		532,366		438,091
Inventories	5		299,305		299,179
Prepaid expenses and deposits			9,471		12,951
Income taxes recoverable			5,032		4,203
Current portion of promissory note			2,408		2,378
TOTAL CURRENT ASSETS			870,196		786,224
Property, plant and equipment	6		772,661		727,250
Deferred income tax assets			101,231		96,801
Intangible assets	7		58,241		56,244
TOTAL NON-CURRENT ASSETS			932,133		880,295
TOTAL ASSETS		$	1,802,329	$	1,666,519
LIABILITIES
Trade and other payables	8	$	546,126	$	496,110
Provisions	9		21,955		28,130
Income taxes payable			15,192		10,185
Current portion of long-term debt	10		29,555		26,389
TOTAL CURRENT LIABILITIES			612,828		560,814
Long-term debt	10		401,993		357,775
Pension and other post-retirement benefits			62,116		64,779
Deferred income tax liabilities			60,164		57,642
Provisions	9		858		849
Other financial liability	3		91,063		87,100
TOTAL NON-CURRENT LIABILITIES			616,194		568,145
TOTAL LIABILITIES		$	1,229,022	$	1,128,959
EQUITY
Capital stock	12		685,044		675,606
Contributed surplus	12		44,891		46,897
Other equity	3		(91,063)		(87,100)
Accumulated other comprehensive loss			(10,914)		(22,001)
Accumulated deficit			(123,963)		(142,082)
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY			503,995		471,320
Non-controlling interest			69,312		66,240
TOTAL EQUITY			573,307		537,560
TOTAL LIABILITIES AND EQUITY		$	1,802,329	$	1,666,519

See accompanying notes to the interim condensed consolidated financial statements.

On behalf of the Board:

"Robert Wildeboer" Director

"Suleiman Rashid" Director

Martinrea International Inc.

Condensed Consolidated Statements of Operations

(in thousands of Canadian dollars, except per share amounts) (unaudited)

		Three months ended			Three months ended
	Note	March 31, 2013			March 31, 2012
SALES		$	769,122		$	735,654
Cost of sales (excluding depreciation of property, plant and equipment)			(672,332	)		(639,816	)
Depreciation of property, plant and equipment (production)			(21,075	)		(15,529	)
Total cost of sales			(693,407	)		(655,345	)
GROSS MARGIN			75,715			80,309
Research and development costs			(4,168	)		(3,328	)
Selling, general and administrative			(34,803	)		(34,266	)
Depreciation of property, plant and equipment (non-production)			(1,474	)		(1,066	)
Amortization of customer contracts and relationships			(486	)		(1,578	)
Restructuring costs	14		-			(2,164	)
Loss on disposal of property, plant and equipment			(111	)		(38	)
OPERATING INCOME			34,673			37,869
Finance costs			(4,683	)		(3,756	)
Other finance income and expenses			983			365
INCOME BEFORE INCOME TAXES			30,973			34,478
Income tax expense	11		(7,468	)		(8,369	)
NET INCOME FOR THE PERIOD			23,505			26,109
Non-controlling interest			(3,617	)		(3,054	)
NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY		$	19,888		$	23,055
Basic earnings per share	13	$	0.24		$	0.28
Diluted earnings per share	13	$	0.24		$	0.28

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands of Canadian dollars) (unaudited)

			Three months ended		Three months ended
			March 31, 2013		March 31, 2012
NET INCOME FOR THE PERIOD			$	23,505	$	26,109
Other comprehensive income (loss), net of tax:
	Items that may be reclassified to net income
		Foreign currency translation differences for foreign operations		12,470		(8,942	)
	Items that will not be reclassified to net income
		Defined benefit plan actuarial gains / (losses)		1,111		(63	)
Other comprehensive income (loss), net of tax				13,581		(9,005	)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD				37,086		17,104
Attributable to:
	Equity holders of the Company			32,086		14,642
	Non-controlling interest			5,000		2,462
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD			$	37,086	$	17,104

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Condensed Consolidated Statements of Changes in Equity

(in thousands of Canadian dollars) (unaudited)

		Equity attributable to equity holders of the Company
				Notes
				receivable									Cumulative									Non-
		Share		for share			Contributed			Other			translation			Accumulated						controlling			Total
		capital		capital			surplus			equity			account			deficit			Total			interest			equity
Balance at December 31, 2011		$	674,568	$	(602	)	$	44,165		$	(71,236	)	$	(8,330	)	$	(169,006	)	$	469,559		$	72,639		$	542,198
Net Income for the period			-		-			-			-			-			23,055			23,055			3,054			26,109
Compensation expense related to stock options			-		-			976			-			-			-			976			-			976
Change in fair value of put option granted to non-controlling interest			-		-			-			(4,410	)		-			-			(4,410	)		-			(4,410	)
Repayment of notes receivable					602			-			-			-			-			602			-			602
Exercise of employee stock options			772		-			(208	)		-			-			-			564			-			564
Other comprehensive income, net of tax
	Actuarial losses from defined benefit plans		-		-			-			-			-			(63	)		(63	)		-			(63	)
	Foreign currency translation differences		-		-			-			-			(8,350	)		-			(8,350	)		(592	)		(8,942	)
Balance at March 31, 2012			675,340		-			44,933			(75,646	)		(16,680	)		(146,014	)		481,933			75,101			557,034
Net income (loss) for the period			-		-			-			-			-			15,727			15,727			(7,974	)		7,753
Compensation expense related to stock options			-		-			2,031			-			-			-			2,031			-			2,031
Change in fair value of put option granted to non-controlling interest			-		-			-			(11,454	)		-			-			(11,454	)		-			(11,454	)
Exercise of employee stock options			266		-			(67	)		-			-			-			199			-			199
Other comprehensive income, net of tax
	Actuarial losses from defined benefit plans		-		-			-			-			-			(11,795	)		(11,795	)		-			(11,795	)
	Foreign currency translation differences		-		-			-			-			(5,321	)		-			(5,321	)		(887	)		(6,208	)
Balance at December 31, 2012			675,606		-			46,897			(87,100	)		(22,001	)		(142,082	)		471,320			66,240			537,560
Net income for the period			-		-			-			-			-			19,888			19,888			3,617			23,505
Compensation expense related to stock options			-		-			315			-			-			-			315			-			315
Change in fair value of put option granted to non-controlling interest			-		-			-			(3,963	)		-			-			(3,963	)		-			(3,963	)
Purchase of non-controlling interest (note 2)			-		-			-			-			-			(2,880	)		(2,880	)		(1,928	)		(4,808	)
Exercise of employee stock options			9,438		-			(2,321	)		-			-			-			7,117			-			7,117
Other comprehensive income, net of tax
	Actuarial gains from defined benefit plans		-		-			-			-			-			1,111			1,111			-			1,111
	Foreign currency translation differences		-		-			-			-			11,087			-			11,087			1,383			12,470
Balance at March 31, 2013		$	685,044	$	-		$	44,891		$	(91,063	)		(10,914	)	$	(123,963	)	$	503,995		$	69,312		$	573,307

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands of Canadian dollars) (unaudited)

		Three months ended			Three months ended
		March 31, 2013			March 31, 2012
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net Income for the period		$	23,505		$	26,109
Adjustments for:
	Depreciation of property, plant and equipment		22,549			16,595
	Amortization of customer contracts and relationships		486			1,578
	Amortization of development costs		1,545			397
	Accretion of interest on promissory note		(30	)		(59	)
	Unrealized losses / (gains) on foreign exchange forward contracts		(228	)		369
	Finance costs		4,683			3,756
	Income tax expense		7,468			8,369
	Loss on disposal of property, plant and equipment		111			38
	Stock-based compensation		315			976
	Pension and other post-retirement benefits expense		1,202			713
	Contributions made to pension and other post-retirement benefits		(2,468	)		(1,980	)
			59,138			56,861
Changes in non-cash working capital items:
	Trade and other receivables		(88,525	)		(117,932	)
	Inventories		2,843			(26,588	)
	Prepaid expenses and deposits		3,480			(591	)
	Trade, other payables and provisions		36,927			69,835
			13,863			(18,415	)
Interest paid			(3,731	)		(3,521	)
Income taxes paid			(4,741	)		(2,076	)
NET CASH PROVIDED / (USED) IN OPERATING ACTIVITIES		$	5,391		$	(24,012	)
FINANCING ACTIVITIES:
	Increase in bank indebtedness		-			13,718
	Exercise of employee stock options		7,117			564
	Increase in long-term debt		51,498			55,494
	Repayment of long-term debt		(5,856	)		(7,047	)
	Receipt of payment on notes receivable for share capital		-			602
NET CASH PROVIDED IN FINANCING ACTIVITIES		$	52,759		$	63,331
INVESTING ACTIVITIES:
	Purchase of property, plant and equipment		(56,705	)		(34,233	)
	Purchase of non-controlling interest (note 2)		(4,808	)		-
	Capitalized development costs		(3,122	)		(8,413	)
	Proceeds on disposal of property, plant and equipment		28			90
NET CASH USED IN INVESTING ACTIVITIES		$	(64,607	)	$	(42,556	)
Effect of foreign exchange rate changes on cash and cash equivalents			(1,351	)		(624	)
DECREASE IN CASH AND CASH EQUIVALENTS			(7,808	)		(3,861	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			29,422			26,505
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	21,614		$	22,644

See accompanying notes to the interim condensed consolidated financial statements.