Category: Canada

TORONTO, Nov. 12, 2024 (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 third quarter ended September 30, 2024, and declared a quarterly cash dividend of $0.05 per share.

HIGHLIGHTS

• Third quarter total sales of $1,237.5 million, production sales of $1,167.3 million.
• Third quarter Adjusted EBITDA(1) of $154.1 million, 12.5% of total sales.
• Third quarter Operating Income Margin of 5.3%; Adjusted Operating Income Margin(1) was 5.9% for the nine months ended September 30, 2024.
• Third quarter Free Cash Flow(1) (excluding principal payments of IFRS-16 lease liabilities) was $57.0 million; Free Cash Flow(1) was $107.4 million for the nine months ended September 30, 2024, a notable improvement over $75.5 million generated in the nine months ended September 30, 2023.
• Third quarter diluted net earnings per share of $0.19 or $0.44 per share at a normalized effective tax rate after adjusting for unusual foreign exchange movements between the Mexican Peso against the U.S. dollar. These foreign exchange movements are non-cash in nature, do not impact cash taxes and tend to balance out over time (refer to “Overall Results” section for further details).
• Net Debt-to-Adjusted EBITDA(1) ratio, excluding the impact of IFRS 16, ended the third quarter at 1.46x.
• New business awards of approximately $35 million in annualized sales at mature volumes.
• Quarterly cash dividend of $0.05 per share declared.

OVERVIEW

Pat D’Eramo, Chief Executive Officer, stated: “Our third quarter financial results were solid, and met our internal expectations based on the lower level of industry production volumes in the quarter. Our Free Cash Flow(1) was strong, and our Adjusted EBITDA(1) was solid, with Adjusted EBITDA Margin(1) up year over year. Operationally, we are executing well. We continue to drive efficiency gains and cost savings through our Martinrea Operating System. In addition, we continue to make good progress in commercial negotiations with our customers, obtaining compensation for volume shortfalls on electric vehicle programs and lingering inflationary costs. We are experiencing some further production volume shortfalls in the fourth quarter as OEMs adjust inventories on a number of platforms, some of which are big programs for us. We have been impacted by OEM production shutdowns, often with little to no advance warning, which makes it challenging to properly flex costs. The impact is being felt across all powertrain types, not just electric vehicles. While this will impact our financial performance in the fourth quarter, we expect production volumes to improve beginning in the first quarter of 2025, as inventories adjust. Interest rates, which are coming down in both the U.S. and Canada, with further cuts expected, should help to improve vehicle affordability, which in turn, should lead to higher sales for suppliers.”

He continued: “I am pleased to announce that we have been awarded new business representing $35 million in annualized sales at mature volumes, consisting of $30 million in Lightweight Structures with multiple customers including International Motors (formerly Navistar), BMW, and Nissan, and $5 million in Propulsion Systems, with Audi.”

Peter Cirulis, Chief Financial Officer, stated: “We are pleased with our financial performance in the third quarter. We are driving a healthy level of Free Cash Flow(1) from the business, and our balance sheet is in great shape. Sales for the third quarter, excluding tooling sales of $70.2 million, were $1,167.3 million. Third quarter Adjusted EBITDA was $154.1 million, and Adjusted EBITDA Margin of 12.5% was up 60 basis points year over year. Free Cash Flow(1) (excluding principal payments of IFRS-16 lease liabilities) was $57.0 million in the third quarter, and $107.4 million on a year-to-date basis, a big improvement over the $75.5 million generated in the comparable 2023 period, driven in part by lower capex. On a full year basis, we project that we will come in at the high end of our 2024 Free Cash Flow(1) outlook range of $100 million to $150 million, excluding lease payments, and potentially even better.”

He continued: “Net Debt(1) (excluding IFRS-16 lease liabilities) declined by approximately $32 million quarter over quarter, to $820.1 million, reflecting the Free Cash Flow(1) profile for the quarter. Approximately $9.5 million was spent during the quarter, repurchasing approximately 826,000 shares through our normal course issuer bid. Our-Net-Debt-to-Adjusted EBITDA(1) ratio (excluding the impact of IFRS 16) ended the quarter at 1.46x, in line with our target leverage ratio of 1.5x or better.”

Rob Wildeboer, Executive Chairman, stated: “We are executing well operationally and financially, and allocating capital with a view to maximizing returns for our stakeholders. We have previously mentioned that capital allocation would be balanced between share buybacks and debt reduction. Both are important priorities for us, and we have demonstrated disciplined execution on both fronts, including during the third quarter. In the past year and a half, since our net debt hit an all-time high of $956 million, we have paid down $136 million in debt, repurchased 6.5 million common shares, equal to 8% of shares outstanding, and reduced our Net-Debt-to-Adjusted EBITDA(1) ratio from 1.90x to 1.46x. We believe consistent Free Cash Flow(1) generation is the path to a higher valuation. On behalf of the executive management team, we would like to thank our people for their hard work in delivering a solid quarterly performance, as well as our shareholders and other stakeholders for their continued support.”

RESULTS OF OPERATIONS

All amounts in this press release are in Canadian dollars, unless otherwise stated; and all tabular amounts are in thousands of Canadian dollars, except earnings per share and number of shares. 

Additional information about the Company, including the Company’s Management Discussion and Analysis of Operating Results and Financial Position for the three and nine months ended September 30, 2024 (“MD&A”), the Company’s interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 (the “interim financial statements”) and the Company’s Annual Information Form for the year ended December 31, 2023 can be found at www.sedarplus.ca.     

OVERALL RESULTS

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

The following tables set out certain highlights of the Company’s performance for the three and nine months ended September 30, 2024 and 2023. Refer to the Company’s interim financial statements for the three and nine months ended September 30, 2024 for a detailed account of the Company’s performance for the periods presented in the tables below.

	Three months ended September 30, 2024				Three months ended September 30, 2023				$ Change			% Change
Sales	$	1,237,493			$	1,378,938			(141,445	)		(10.3	%)
Gross Margin		163,350				181,194			(17,844	)		(9.8	%)
Operating Income		65,879				83,015			(17,136	)		(20.6	%)
Net Income for the period		14,157				53,744			(39,587	)		(73.7	%)
Net Earnings per Share – Basic and Diluted	$	0.19			$	0.68			(0.49	)		(72.1	%)
Non-IFRS Measures**
Adjusted Operating Income	$	65,879			$	83,015			(17,136	)		(20.6	%)
% of Sales		5.3	%			6.0	%
Adjusted EBITDA		154,129				163,482			(9,353	)		(5.7	%)
% of Sales		12.5	%			11.9	%
Adjusted Net Income*		14,157				53,744			(39,587	)		(73.7	%)
Adjusted Net Earnings per Share – Basic and Diluted*	$	0.19			$	0.68			(0.49	)		(72.1	%)

	Nine months ended September 30, 2024				Nine months ended September 30, 2023				$ Change			% Change
Sales	$	3,863,199			$	4,043,882			(180,683	)		(4.5	%)
Gross Margin		519,517				522,169			(2,652	)		(0.5	%)
Operating Income		215,019				240,628			(25,609	)		(10.6	%)
Net Income for the period		98,786				151,815			(53,029	)		(34.9	%)
Net Earnings per Share – Basic and Diluted	$	1.30			$	1.90			(0.60	)		(31.6	%)
Non-IFRS Measures**
Adjusted Operating Income	$	226,629			$	240,628			(13,999	)		(5.8	%)
% of Sales		5.9	%			6.0	%
Adjusted EBITDA		483,098				476,598			6,500			1.4	%
% of Sales		12.5	%			11.8	%
Adjusted Net Income*		106,637				147,241			(40,604	)		(27.6	%)
Adjusted Net Earnings per Share – Basic and Diluted*	$	1.40			$	1.84			(0.44	)		(23.9	%)

*Adjusted Net Income and Adjusted Net Earnings per Share for the three and nine months ended September 30, 2024 were negatively impacted by an unusually high effective tax rate. This was driven primarily by the magnitude and pace of the depreciation of the Mexican Peso against the U.S. dollar, which is the functional currency of the Company’s Mexican operations. In situations where the local and functional currencies differ, IFRS, contrary to US GAAP, requires the tax value of assets and liabilities denominated in local currency to be revalued to the operations’ functional currency at the reporting date, with the related foreign exchange movements impacting the tax expense for the period. These foreign exchange movements are non-cash in nature, do not impact cash taxes and tend to balance out over time. Including this, and other foreign exchange related items, the effective tax rate for the nine months ended September 30, 2024 was 38.8%. Excluding these foreign exchange items, the effective tax rate would have been 31.0%, which is more reflective of a typical tax rate for the Company. Using a tax rate of 31.0%, Adjusted Net Earnings per Share would have been $0.44 for the three months ended September 30, 2024, and $1.47 for the nine months ended September 30, 2024.

**Non-IFRS Measures

The Company prepares its interim financial statements in accordance with IFRS. However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Company. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating the Company’s performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures include “Adjusted Net Income”, “Adjusted Net Earnings per Share (on a basic and diluted basis)”, “Adjusted Operating Income”, “Adjusted EBITDA”, “Free Cash Flow”, “Free Cash Flow (after IFRS 16 lease payments)”, and “Net Debt”.

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

	Three months ended September 30, 2024			Three months ended September 30, 2023
Net Income	$	14,157		$	53,744
Adjustments, after tax*		–			–
Adjusted Net Income	$	14,157		$	53,744

	Nine months ended September 30, 2024			Nine months ended September 30, 2023
Net Income	$	98,786		$	151,815
Adjustments, after tax*		7,851			(4,574	)
Adjusted Net Income	$	106,637		$	147,241

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

	Three months ended September 30, 2024				Three months ended September 30, 2023
Net Income	$	14,157			$	53,744
Income tax expense		33,276				14,713
Other finance income		(1,084	)			(7,418	)
Share of loss of equity investments		690				600
Finance expense		18,840				21,376
Adjustments, before tax*		–				–
Adjusted Operating Income	$	65,879			$	83,015
Depreciation of property, plant and equipment and right-of-use assets		84,904				77,837
Amortization of development costs		3,084				2,488
Loss on disposal of property, plant and equipment		262				142
Adjusted EBITDA	$	154,129			$	163,482

	Nine months ended September 30, 2024				Nine months ended September 30, 2023
Net Income	$	98,786			$	151,815
Income tax expense		63,725				38,422
Other finance income		(8,140	)			(7,074	)
Share of loss of equity investments		2,147				2,630
Finance expense		58,501				60,108
Adjustments, before tax*		11,610				(5,273	)
Adjusted Operating Income	$	226,629			$	240,628
Depreciation of property, plant and equipment and right-of-use assets		246,808				228,041
Amortization of development costs		8,172				7,771
Loss on disposal of property, plant and equipment		1,489				158
Adjusted EBITDA	$	483,098			$	476,598

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

SALES

Three months ended September 30, 2024 to three months ended September 30, 2023 comparison

	Three months ended September 30, 2024				Three months ended September 30, 2023				$ Change			% Change
North America	$	960,256			$	1,042,218			(81,962	)		(7.9	%)
Europe		250,499				302,145			(51,646	)		(17.1	%)
Rest of the World		33,638				42,644			(9,006	)		(21.1	%)
Eliminations		(6,900	)			(8,069	)		1,169			14.5	%
Total Sales	$	1,237,493			$	1,378,938			(141,445	)		(10.3	%)

The Company’s consolidated sales for the third quarter of 2024 decreased by $141.4 million or 10.3% to $1,237.5 million as compared to $1,378.9 million for the third quarter of 2023. The total decrease in sales was driven by year-over-year decreases across all operating segments.

Sales for the third quarter of 2024 in the Company’s North America operating segment decreased by $82.0 million or 7.9% to $960.3 million from $1,042.2 million for the third quarter of 2023. The decrease was due to a decrease in tooling sales of $47.5 million, which are typically dependent on the timing of tooling construction and final acceptance by the customer; programs that ended production during or subsequent to the third quarter of 2023, specifically the Ford Edge, Dodge Charger/Challenger, and Chevrolet Bolt; and lower year-over-year OEM production volumes on certain platforms, including the Jeep Grand Cherokee and Wagoneer, an engine block for Stellantis, and the Ford Mustang Mach E. These negative factors were partially offset by the launch and ramp up of new programs during or subsequent to the third quarter of 2023, including General Motors’ new electric vehicle platforms (BEV3/BET), and the Toyota Tacoma; higher year-over-year OEM production volumes on certain other light vehicle platforms, including General Motors’ large pick-up truck and SUV platform, and the Ford Maverick; and the impact of foreign exchange on the translation of U.S. denominated production sales, which had a positive impact on overall sales for the third quarter of 2024 of $21.1 million. Overall third quarter industry-wide OEM light vehicle production volumes in North America decreased by approximately 5% year-over-year.

Sales for the third quarter of 2024 in the Company’s Europe operating segment decreased by $51.6 million or 17.1% to $250.5 million from $302.1 million for the third quarter of 2023. The decrease was due to lower year-over-year OEM production volumes on certain platforms, including aluminum engine blocks for Ford and Mercedes, and the Mercedes’ new electric vehicle platform (EVA2); programs that ended production during or subsequent to the third quarter of 2023, specifically the BMW Mini; and a decrease in tooling sales of $8.8 million, which are typically dependent of the timing of tooling construction and final acceptance by the customer. These negative factors were partially offset by higher year-over-year OEM production volumes on certain platforms, including the Lucid Air, and an aluminum engine block for Jaguar Land Rover; and the impact of foreign exchange on the translation of Euro denominated production sales, which had a positive impact on overall sales for the third quarter of 2024 of $4.8 million. Overall third quarter industry-wide OEM light vehicle production volumes in Europe decreased by approximately 6% year-over-year.

Sales for the third quarter of 2024 in the Company’s Rest of the World operating segment decreased by $9.0 million or 21.1% to $33.6 million from $42.6 million in the third quarter of 2023. The decrease was largely driven by programs that came with the operations acquired from Metalsa in China that ended production during or subsequent to the third quarter of 2023, lower year-over-year production volumes on the Cadillac CT6 vehicle platform in China, and a decrease in tooling sales of $2.0 million; partially offset by the launch and ramp up of new programs, specifically the BMW 5-series in China.

Overall tooling sales decreased by $58.3 million (including outside segment sales eliminations) to $70.2 million for the third quarter of 2024 from $128.6 million for the third quarter of 2023.

Nine months ended September 30, 2024 to nine months ended September 30, 2023 comparison

	Nine months ended September 30, 2024				Nine months ended September 30, 2023				$ Change			% Change
North America	$	2,908,778			$	3,063,277			(154,499	)		(5.0	%)
Europe		871,469				893,638			(22,169	)		(2.5	%)
Rest of the World		102,600				113,092			(10,492	)		(9.3	%)
Eliminations		(19,648	)			(26,125	)		6,477			24.8	%
Total Sales	$	3,863,199			$	4,043,882			(180,683	)		(4.5	%)

The Company’s consolidated sales for the nine months ended September 30, 2024 decreased by $180.7 million or 4.5% to $3,863.2 million as compared to $4,043.9 million for the nine months ended September 30, 2023. The total decrease in sales was driven by year-over-year decreases across all operating segments.

Sales for the nine months ended September 30, 2024 in the Company’s North America operating segment decreased by $154.5 million or 5.0% to $2,908.8 million from $3,063.3 million for the nine months ended September 30, 2023. The decrease was due generally to a decrease in tooling sales of $154.2 million which are typically dependent on the timing of tooling construction and final acceptance by the customer; programs that ended production during or subsequent to the corresponding period of 2023, specifically the Dodge Charger/Challenger, the Ford Edge, and Chevrolet Bolt; and lower year-over-year OEM production volumes on certain platforms, including an engine block for Stellantis, the Jeep Grand Cherokee and Wagoneer, the Ford Mustang Mach E, and Mercedes’ new electric vehicle platform (EVA2). These negative factors were partially offset by the launch and ramp up of new programs, including General Motors’ new electric vehicle platforms (BEV3/BET), and the Toyota Tacoma; higher year-over-year production volumes of certain light vehicle platforms including the Ford Escape and Maverick, and General Motors’ large pick-up truck and SUV platform; and the impact of foreign exchange on the translation of U.S. denominated production sales, which had a positive impact on overall sales for the nine months ended September 30, 2024 of $26.1 million.

Sales for the nine months ended September 30, 2024 in the Company’s Europe operating segment decreased by $22.2 million or 2.5% to $871.5 million from $893.6 million for the nine months ended September 30, 2023. The decrease was due to programs that ended production during or subsequent to the corresponding period of 2023, specifically the BMW Mini; and lower year-over-year production volumes of certain other light vehicle platforms, including the Mercedes’ new electric vehicle platform (EVA2) and aluminum engine blocks for Ford and Mercedes. These negative factors were partially offset by higher year-over-year OEM production volumes on certain platforms, including an aluminum engine block for Jaguar Land Rover; an increase in tooling sales of $21.0 million, which are typically dependent on the timing of tooling construction and final acceptance by the customer; and the impact of foreign exchange on the translation of Euro denominated production sales, which had a positive impact on overall sales for the nine months ended September 30, 2024 of $9.9 million.

Sales for the nine months ended September 30, 2024 in the Company’s Rest of the World operating segment decreased by $10.5 million or 9.3% to $102.6 million from $113.1 million for the nine months ended September 30, 2023. The decrease was largely driven by programs that came with the operations acquired from Metalsa in China that ended production during or subsequent to the nine months ended September 30, 2023, and lower year-over-year production volumes on the Cadillac CT6 vehicle platform in China; partially offset by the launch and ramp up of new programs, specifically the BMW 5-series in China, and an increase in tooling sales of $4.0 million.

Overall tooling sales decreased by $128.1 million (including outside segment sales eliminations) to $174.7 million for the nine months ended September 30, 2024 from $302.8 million for the nine months ended September 30, 2023.

GROSS MARGIN

Three months ended September 30, 2024 to three months ended September 30, 2023 comparison

	Three months ended September 30, 2024				Three months ended September 30, 2023				$ Change			% Change
Gross margin	$	163,350			$	181,194			(17,844	)		(9.8	%)
% of Sales		13.2	%			13.1	%

The gross margin percentage for the third quarter of 2024 of 13.2% increased slightly as a percentage of sales as compared to the gross margin percentage for the third quarter of 2023 of 13.1% due to:

• productivity and efficiency improvements at certain operating facilities and other improvements; and
• a decrease in tooling sales which typically earn low margin for the Company.

These factors were essentially offset by:

• overall lower production sales volume and corresponding contribution;
• operational inefficiencies at certain operating facilities; and
• a negative sales mix, including additional depreciation expense from recent new program investments.

Overall market related inflationary pressures on labour, material and energy costs, along with offsetting commercial settlements, were generally stable for the quarter on a year-over-year basis.

Nine months ended September 30, 2024 to nine months ended September 30, 2023 comparison

	Nine months ended September 30, 2024				Nine months ended September 30, 2023				$ Change			% Change
Gross margin	$	519,517			$	522,169			(2,652	)		(0.5	%)
% of Sales		13.4	%			12.9	%

The gross margin percentage for the nine months ended September 30, 2024 of 13.4% increased as a percentage of sales by 0.5% as compared to the gross margin percentage for the nine months ended September 30, 2023 of 12.9%. The increase in gross margin as a percentage of sales was generally due to:

• productivity and efficiency improvements at certain operating facilities and other improvements; and
• a decrease in tooling sales which typically earn low margin for the Company.

These factors were partially offset by:

• operational inefficiencies at certain other operating facilities;
• overall lower production sales volume and corresponding contribution;
• an unfavourable impact from a year-over-year change in foreign exchange rates in Mexico; and
• a negative sales mix, including additional depreciation expense from recent new program investments.

Overall market related inflationary pressures on labour, material and energy costs, along with offsetting commercial settlements, were generally stable year-over-year.

ADJUSTMENTS TO NET INCOME

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

TABLE A

Three months ended September 30, 2024 to three months ended September 30, 2023 comparison

No adjustments were noted during the three months ended September 30, 2024 and 2023.

TABLE B

Nine months ended September 30, 2024 to nine months ended September 30, 2023 comparison

	Nine months ended September 30, 2024				Nine months ended September 30, 2023				$ Change
NET INCOME	$	98,786			$	151,815			$	(53,029	)
Adjustments:
Restructuring costs (1)		11,610				–				11,610
Net gain on disposal of equity investments (2)		–				(5,273	)			5,273
ADJUSTMENTS, BEFORE TAX	$	11,610			$	(5,273	)		$	16,883
Tax impact of adjustments		(3,759	)			699				(4,458	)
ADJUSTMENTS, AFTER TAX	$	7,851			$	(4,574	)		$	12,425
ADJUSTED NET INCOME	$	106,637			$	147,241			$	(40,604	)
Number of Shares Outstanding – Basic (‘000)		76,191				79,933
Adjusted Basic Net Earnings Per Share	$	1.40			$	1.84
Number of Shares Outstanding – Diluted (‘000)		76,194				79,989
Adjusted Diluted Net Earnings Per Share	$	1.40			$	1.84

(1)   Restructuring costs

Additions to the restructuring provision during the nine months ended September 30, 2024 totaled $11.6 million and represent employee-related severance resulting from the rightsizing of certain operations in Germany, Mexico, Canada, and the United States.

(2)   Net gain on disposal of equity investments

On March 24, 2023, Martinrea sold its equity interest in VoltaXplore Inc. (“VoltaXplore) to NanoXplore Inc. (“NanoXplore”) for 3,420,406 common shares of NanoXplore at $2.92 per share representing an aggregate consideration of $10.0 million. The sale transaction resulted in a gain on disposal of equity investments during the first quarter of 2023 as follows:

Gross gain (Total consideration of $10.0 million less book value of investment)	$	6,821
Less: gain attributable to indirect retained interest		(1,548	)
Net gain on disposal of equity investments	$	5,273

Subsequent to this transaction, the Company no longer holds a direct equity interest in VoltaXplore while its equity ownership interest in NanoXplore increased from 21.1% to 22.7%.

NET INCOME

Three months ended September 30, 2024 to three months ended September 30, 2023 comparison

	Three months ended September 30, 2024			Three months ended September 30, 2023			$ Change			% Change
Net Income	$	14,157		$	53,744		(39,587	)		(73.7	%)
Net Earnings per Share
Basic and Diluted	$	0.19		$	0.68

Net Income for the third quarter of 2024 decreased by $39.6 million to $14.2 million or $0.19 per share, on a basic and diluted basis, from Net Income of $53.7 million or $0.68 per share, on a basic and diluted basis, for the third quarter of 2023.

Net Income for the third quarter of 2024, as compared to the third quarter of 2023, was negatively impacted by the following:

• lower gross margin from lower year-over-year sales volume;
• a net foreign exchange gain of $1.3 million for the third quarter of 2024 compared to a gain of $7.1 million for the third quarter of 2023; and
• a higher effective tax rate (70.2% for the third quarter of 2024 compared to 21.5% for the third quarter of 2023) driven primarily by the IFRS accounting treatment of the rapid depreciation of the Mexican Peso against the U.S. dollar that does not impact cash.

These factors were partially offset by the following:

• a year-over-year decrease in SG&A expense, as previously explained; and
• a $2.5 million year-over-year decrease in finance expense as a result of lower borrowing rates on the Company’s revolving bank debt.

Nine months ended September 30, 2024 to nine months ended September 30, 2023 comparison

	Nine months ended September 30, 2024			Nine months ended September 30, 2023			$ Change			% Change
Net Income	$	98,786		$	151,815		(53,029	)		(34.9	%)
Adjusted Net Income		106,637			147,241		(40,604	)		(27.6	%)
Net Earnings per Share
Basic and Diluted	$	1.30		$	1.90
Adjusted Net Earnings per Share
Basic and Diluted	$	1.40		$	1.84

Net Income, before adjustments, for the nine months ended September 30, 2024 decreased by $53.0 million to $98.8 million or $1.30 per share, on a basic and diluted basis, from Net Income of $151.8 million or $1.90 per share, on a basic and diluted basis, for the nine months ended September 30, 2023. Excluding the adjustments explained in Table B under “Adjustments to Net Income”, Adjusted Net Income for the nine months ended September 30, 2024 decreased by $40.6 million to $106.6 million or $1.40 per share on a basic and diluted basis, from $147.2 million or $1.84 per share on a basic and diluted basis, for the nine months ended September 30, 2023.

Adjusted Net Income for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was negatively impacted by the following:

• a year-over-year increase in SG&A expense, as previously explained;
• a $3.8 million year-over-year increase in research and development costs driven generally by increased new product and process development activity;
• lower gross margin on lower year-over-year sales volume;
• a $1.5 million loss on the disposal of property, plant and equipment for the nine months ended September 30, 2024; and
• a higher effective tax rate (38.8% for the nine months ended September 30, 2024 compared to 20.4% for the nine months ended September 30, 2023) driven primarily by the IFRS accounting treatment of the rapid depreciation of the Mexican Peso against the U.S. dollar that does not impact cash.

These factors were partially offset by the following:

• a net foreign exchange gain of $8.1 million for the nine months ended September 30, 2024 compared to a gain of $6.5 million for the nine months ended September 30, 2023; and
• a $1.6 million year-over-year decrease in finance expense as a result of lower borrowing rates on the Company’s revolving bank debt.

Adjusted Net Income and Adjusted Net Earnings per Share for the three and nine months ended September 30, 2024 were negatively impacted by an unusually high effective tax rate. This was driven primarily by the magnitude and pace of the depreciation of the Mexican Peso against the U.S. dollar, which is the functional currency of the Company’s Mexican operations. In situations where the local and functional currencies differ, IFRS, contrary to US GAAP, requires the tax value of assets and liabilities denominated in local currency to be revalued to the operations’ functional currency at the reporting date, with the related foreign exchange movements impacting the tax expense for the period. These foreign exchange movements are non-cash in nature, do not impact cash taxes and tend to balance out over time. Including this, and other foreign exchange related items, the effective tax rate for the nine months ended September 30, 2024 was 38.8%. Excluding these foreign exchange items, the effective tax rate would have been 31.0%, which is more reflective of a typical tax rate for the Company. Using a tax rate of 31.0%, Adjusted Net Earnings per Share would have been $0.44 for the three months ended September 30, 2024, and $1.47 for the nine months ended September 30, 2024.

DIVIDEND

A cash dividend of $0.05 per share has been declared by the Board of Directors payable to shareholders of record on December 31, 2024, on or about January 15, 2025.

ABOUT MARTINREA

Martinrea International Inc. is a leader in the development and production of quality metal parts, assemblies and modules, fluid management systems, and complex aluminum products focused primarily on the automotive sector. Martinrea currently operates in 56 locations in Canada, the United States, Mexico, Brazil, Germany, Slovakia, Spain, China, South Africa, and Japan. Martinrea’s vision is making lives better by being the best supplier we can be in the products we make and the services we provide. For more information on Martinrea, please visit www.martinrea.com. Follow Martinrea on X and Facebook.

CONFERENCE CALL DETAILS

A conference call to discuss the financial results will be held on Tuesday, November 12, 2024 at 5:30 p.m. Eastern Time. To participate, please dial 416-641-6104 (Toronto area) or 800-952-5114 (toll free Canada and US) and enter participant code 1624622#. Please call 10 minutes prior to the start of the conference call.

The conference call will also be webcast live in listen‐only mode and archived for twelve months. The webcast and accompanying presentation can be accessed at: https://www.martinrea.com/investor-relations/events-presentations/.

There will also be a rebroadcast of the call available by dialing 905-694-9451 or toll free 800-408-3053 (Conference ID – 9076430#). The rebroadcast will be available until December 14, 2024 at 5:00 p.m.

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

FORWARD-LOOKING INFORMATION

Special Note Regarding Forward-Looking Statements

This Press Release and the documents incorporated by reference therein contains forward-looking statements within the meaning of applicable Canadian securities laws including those related to the Company’s expectations as to, or its views or beliefs in or on, the impact of, or duration of, or factors affecting, or expected response to or growth of, improvements in, expansion of and/or guidance or outlook (including for 2024) as to future results, revenue, sales, margin, gross margin, earnings, and earnings per share, adjusted earnings per share, free cash flow, volumes, adjusted net earnings per share, operating income margins, operating margins, adjusted operating income margins, leverage ratios, net debt to adjusted EBITDA(1), debt repayment, Adjusted EBITDA(1), improvements in interest rates, tax rates, supply constraints, inflation and labour, the growth of the Company and pursuit of, and belief in, its strategies, the strength, recovery and growth of the automotive industry and continuing challenges, capital allocation strategies, contemplated purchases under the NCIB, as well as other forward-looking statements. The words “continue”, “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “views”, “intend”, “believe”, “plan” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances, such as expected sales and industry production estimates, current foreign exchange rates, timing of product launches and operational improvement during the period, and current Board approved budgets. Many factors could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, some of which are discussed in detail in the Company’s AIF and MD&A for the year ended December 31, 2023, and other public filings which can be found at www.sedarplus.ca:   

• North American and Global Economic and Political Conditions (including war) and Consumer Confidence
• Automotive Industry Risks
• Pandemics and Epidemics, Force Majeure Events, Natural Disasters, Terrorist Activities, Political and Civil Unrest or War, and Other Outbreaks
• Russia and Ukraine War and Hamas-Israel War
• Semiconductor Chip Shortages and Price Increases
• Inflationary Pressures
• Regional Energy Shortages
• Dependence Upon Key Customers
• Customer Consolidation and Cooperation
• Emergence of Potentially Disruptive EV OEMs
• Outsourcing and Insourcing Trends
• Financial Viability of Suppliers and Key Suppliers and Supply Disruptions
• Competition
• Customer Pricing Pressures, Contractual Arrangements, Cost and Risk Absorption and Purchase Orders
• Material and Commodity Prices and Volatility
• Scrap Steel/Aluminum Price Volatility
• Quote/Pricing Assumptions
• Launch and Operational Costs and Cost Structure
• Fluctuations in Operating Results
• Product Warranty, Repair/Replacement Costs, Recall, Product Liability and Liability Risk
• Product Development and Technological Change
• A Shift Away from Technologies in Which the Company is Investing
• Dependence Upon Key Personnel
• Limited Financial Resources/Uncertainty of Future Financing/Banking
• Cybersecurity Threats
• Acquisitions
• Joint Ventures
• Private or Public Equity Investments in Technology Companies
• Potential Tax Exposures
• Potential Rationalization Costs, Turnaround Costs and Impairment Charges
• Labour Relations Matters
• Trade Restrictions or Disputes
• Changes in Laws and Governmental Regulations
• Environmental Regulation and Climate Change
• Litigation and Regulatory Compliance and Investigations
• Risks of Conducting Business in Foreign Countries, Including China, Brazil and Other Growing Markets
• Currency Risk
• Internal Controls Over Financial Reporting and Disclosure Controls and Procedures
• Loss of Use of Key Manufacturing Facilities
• Intellectual Property
• Availability of Consumer Credit or Cost of Borrowing
• Evolving Business Risk Profile
• Competition with Low Cost Countries
• The Company’s Ability to Shift its Manufacturing Footprint to Take Advantage of Opportunities in Growing Markets
• Change in the Company’s Mix of Earnings Between Jurisdictions with Lower Tax Rates and Those with Higher Tax Rates
• Pension Plans and Other Post-Employment Benefits
• Potential Volatility of Share Prices
• Dividends
• Lease Obligations           

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

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

For further information, please contact:

Peter Cirulis

Chief Financial Officer

Martinrea International Inc.

3210 Langstaff Road

Vaughan, Ontario L4K 5B2

Tel:   416-749-0314

Fax: 289-982-3001

---

1 The Company prepares its financial statements in accordance with IFRS Accounting Standards (“IFRS”). However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Company. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating the Company’s performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures, included anywhere in this press release, include “Adjusted Net Income”, “Adjusted Net Earnings per Share (on a basic and diluted basis)”, “Adjusted Operating Income”, “Adjusted EBITDA”, “Free Cash Flow”, “Free Cash-Flow (after IFRS 16 lease payments)” and “Net Debt”. The relevant IFRS financial measure, as applicable, and a reconciliation of certain non-IFRS financial measures to measures determined in accordance with IFRS are contained in the Company’s Management Discussion and Analysis for the three and nine months ended September 30, 2024 and in this press release.

Martinrea International Inc.

Interim Condensed Consolidated Balance Sheets

(in thousands of Canadian dollars) (unaudited)

	Note	September 30, 2024		December 31, 2023
ASSETS
Cash and cash equivalents		$	177,267	$	186,804
Trade and other receivables	2		801,012		695,819
Inventories	3		564,558		568,274
Prepaid expenses and deposits			35,611		33,904
Income taxes recoverable			35,644		11,089
TOTAL CURRENT ASSETS			1,614,092		1,495,890
Property, plant and equipment	4		1,945,783		1,943,771
Right-of-use assets	5		224,230		238,552
Deferred tax assets			193,175		192,301
Intangible assets			40,193		42,743
Investments	6		66,124		60,170
Pension assets			17,046		16,303
TOTAL NON-CURRENT ASSETS			2,486,551		2,493,840
TOTAL ASSETS		$	4,100,643	$	3,989,730
LIABILITIES
Trade and other payables		$	1,185,482	$	1,176,579
Provisions	7		8,843		29,892
Income taxes payable			52,364		25,017
Current portion of long-term debt	8		11,290		12,778
Current portion of lease liabilities	9		52,177		48,507
TOTAL CURRENT LIABILITIES			1,310,156		1,292,773
Long-term debt	8		986,063		956,458
Lease liabilities	9		192,233		210,469
Pension and other post-retirement benefits			40,055		37,261
Deferred tax liabilities			26,059		27,588
TOTAL NON-CURRENT LIABILITIES			1,244,410		1,231,776
TOTAL LIABILITIES			2,554,566		2,524,549
EQUITY
Capital stock	11		611,101		645,256
Contributed surplus			45,950		45,903
Accumulated other comprehensive income			139,934		95,753
Retained earnings			749,092		678,269
TOTAL EQUITY			1,546,077		1,465,181
TOTAL LIABILITIES AND EQUITY		$	4,100,643	$	3,989,730

Contingencies (note 16)

Subsequent event (note 18)

See accompanying notes to the interim condensed consolidated financial statements.

On behalf of the Board:

“Robert Wildeboer”	Director
“Terry Lyons”	Director

Martinrea International Inc.

Interim Condensed Consolidated Statements of Operations

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

	Note	Three months ended September 30, 2024			Three months ended September 30, 2023			Nine months ended September 30, 2024			Nine months ended September 30, 2023
SALES		$	1,237,493		$	1,378,938		$	3,863,199		$	4,043,882
Cost of sales (excluding depreciation of property, plant and equipment and right-of-use assets)			(993,212	)		(1,124,326	)		(3,109,104	)		(3,306,836	)
Depreciation of property, plant and equipment and right-of-use assets (production)			(80,931	)		(73,418	)		(234,578	)		(214,877	)
Total cost of sales			(1,074,143	)		(1,197,744	)		(3,343,682	)		(3,521,713	)
GROSS MARGIN			163,350			181,194			519,517			522,169
Research and development costs			(10,852	)		(9,628	)		(32,037	)		(28,257	)
Selling, general and administrative			(82,384	)		(83,990	)		(247,132	)		(239,962	)
Depreciation of property, plant and equipment and right-of-use assets (non-production)			(3,973	)		(4,419	)		(12,230	)		(13,164	)
Loss on disposal of property, plant and equipment			(262	)		(142	)		(1,489	)		(158	)
Restructuring costs	7		–			–			(11,610	)		–
OPERATING INCOME			65,879			83,015			215,019			240,628
Share of loss of equity investments	6		(690	)		(600	)		(2,147	)		(2,630	)
Net gain on disposal of equity investments			–			–			–			5,273
Finance expense	13		(18,840	)		(21,376	)		(58,501	)		(60,108	)
Other finance income	13		1,084			7,418			8,140			7,074
INCOME BEFORE INCOME TAXES			47,433			68,457			162,511			190,237
Income tax expense	10		(33,276	)		(14,713	)		(63,725	)		(38,422	)
NET INCOME FOR THE PERIOD		$	14,157		$	53,744		$	98,786		$	151,815
Basic earnings per share	12	$	0.19		$	0.68		$	1.30		$	1.90
Diluted earnings per share	12	$	0.19		$	0.68		$	1.30		$	1.90

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Interim Condensed Consolidated Statements of Comprehensive Income

(in thousands of Canadian dollars) (unaudited)

	Three months ended September 30, 2024			Three months ended September 30, 2023		Nine months ended September 30, 2024			Nine months ended September 30, 2023
NET INCOME FOR THE PERIOD	$	14,157		$	53,744	$	98,786		$	151,815
Other comprehensive income (loss), net of tax:
Items that may be reclassified to net income
Foreign currency translation differences for foreign operations		(1,472	)		28,682		44,206			(2,345	)
Items that will not be reclassified to net income
Share of other comprehensive income (loss) of equity investments (note 6)		14			14		(25	)		(4	)
Remeasurement of defined benefit plans		322			3,184		(814	)		5,630
Other comprehensive income (loss), net of tax		(1,136	)		31,880		43,367			3,281
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	$	13,021		$	85,624	$	142,153		$	155,096

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Interim Condensed Consolidated Statements of Changes in Equity

(in thousands of Canadian dollars) (unaudited)

	Capital stock			Contributed surplus			Accumulated other comprehensive income			Retained earnings			Total equity
BALANCE AT DECEMBER 31, 2022	$	663,646		$	45,558		$	124,065		$	543,636		$	1,376,905
Net income for the period		–			–			–			151,815			151,815
Compensation expense related to stock options		–			331			–			–			331
Dividends ($0.15 per share)		–			–			–			(11,939	)		(11,939	)
Exercise of employee stock options		358			(97	)		–			–			261
Repurchase of common shares (note 11)		(13,370	)		–			–			(7,474	)		(20,844	)
Other comprehensive income (loss) net of tax
Remeasurement of defined benefit plans		–			–			–			5,630			5,630
Foreign currency translation differences		–			–			(2,345	)		–			(2,345	)
Share of other comprehensive loss of equity investments		–			–			(4	)		–			(4	)
BALANCE AT SEPTEMBER 30, 2023		650,634			45,792			121,716			681,668			1,499,810
Net income for the period		–			–			–			1,850			1,850
Compensation expense related to stock options		–			111			–			–			111
Dividends ($0.05 per share)		–			–			–			(3,907	)		(3,907	)
Repurchase of common shares (note 11)		(5,378	)		–			–			(2,847	)		(8,225	)
Other comprehensive income (loss) net of tax
Remeasurement of defined benefit plans		–			–			–			1,505			1,505
Foreign currency translation differences		–			–			(25,949	)		–			(25,949	)
Share of other comprehensive loss of equity investments		–			–			(14	)		–			(14	)
BALANCE AT DECEMBER 31, 2023		645,256			45,903			95,753			678,269			1,465,181
Net income for the period		–			–			–			98,786			98,786
Compensation expense related to stock options		–			127			–			–			127
Dividends ($0.15 per share)		–			–			–			(11,281	)		(11,281	)
Exercise of employee stock options		350			(80	)		–			–			270
Repurchase of common shares (note 11)		(34,505	)		–			–			(15,868	)		(50,373	)
Other comprehensive income (loss) net of tax
Remeasurement of defined benefit plans		–			–			–			(814	)		(814	)
Foreign currency translation differences		–			–			44,206			–			44,206
Share of other comprehensive loss of equity investments		–			–			(25	)		–			(25	)
BALANCE AT SEPTEMBER 30, 2024	$	611,101		$	45,950		$	139,934		$	749,092		$	1,546,077

See accompanying notes to the interim condensed consolidated financial statements.

Martinrea International Inc.

Interim Condensed Consolidated Statements of Cash Flows

(in thousands of Canadian dollars) (unaudited)

	Three months ended September 30, 2024			Three months ended September 30, 2023			Nine months ended September 30, 2024			Nine months ended September 30, 2023
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net income for the period	$	14,157		$	53,744		$	98,786		$	151,815
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets		84,904			77,837			246,808			228,041
Amortization of development costs		3,084			2,488			8,172			7,771
Unrealized loss (gain) on foreign exchange forward contracts		(4,382	)		298			(913	)		215
Finance expense		18,840			21,376			58,501			60,108
Income tax expense		33,276			14,713			63,725			38,422
Loss on disposal of property, plant and equipment		262			142			1,489			158
Deferred and restricted share units expense		2,893			2,294			6,261			9,505
Stock options expense		43			110			127			331
Share of loss of equity investments		690			600			2,147			2,630
Net gain on disposal of equity investments		–			–			–			(5,273	)
Pension and other post-retirement benefits expense		571			693			1,702			2,087
Contributions made to pension and other post-retirement benefits		(489	)		(666	)		(1,657	)		(1,886	)
		153,849			173,629			485,148			493,924
Changes in non-cash working capital items:
Trade and other receivables		(2,739	)		(1,108	)		(87,575	)		(128,104	)
Inventories		12,159			25,395			15,897			23,500
Prepaid expenses and deposits		(2,163	)		(2,854	)		(1,226	)		2,595
Trade, other payables and provisions		(5,529	)		(5,741	)		(17,128	)		73,577
		155,577			189,321			395,116			465,492
Interest paid		(21,839	)		(25,278	)		(65,306	)		(73,041	)
Income taxes paid		(1,849	)		(10,839	)		(50,533	)		(74,622	)
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	131,889		$	153,204		$	279,277		$	317,829
FINANCING ACTIVITIES:
Increase (decrease) in long-term debt (net of deferred financing fees)		(29,094	)		(27,011	)		18,847			8,320
Equipment loan repayments		(1,329	)		(3,895	)		(5,899	)		(12,471	)
Principal payments of lease liabilities		(13,096	)		(11,845	)		(38,852	)		(34,732	)
Dividends paid		(3,743	)		(3,981	)		(11,489	)		(12,019	)
Exercise of employee stock options		–			–			270			261
Repurchase of common shares		(9,471	)		(10,804	)		(49,393	)		(20,844	)
NET CASH USED IN FINANCING ACTIVITIES	$	(56,733	)	$	(57,536	)	$	(86,516	)	$	(71,485	)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (excluding capitalized interest)*		(80,814	)		(62,444	)		(191,681	)		(222,300	)
Capitalized development costs		(1,457	)		(1,397	)		(4,601	)		(5,598	)
Increase in investments (note 6)		–			–			(8,130	)		(1,000	)
Proceeds on disposal of property, plant and equipment		4,122			16			5,311			402
NET CASH USED IN INVESTING ACTIVITIES	$	(78,149	)	$	(63,825	)	$	(199,101	)	$	(228,496	)
Effect of foreign exchange rate changes on cash and cash equivalents		(1,178	)		1,127			(3,197	)		(778	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(4,171	)		32,970			(9,537	)		17,070
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		181,438			145,755			186,804			161,655
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	177,267		$	178,725		$	177,267		$	178,725

*As at September 30, 2024, $46,104 (December 31, 2023 – $75,800) of purchases of property, plant and equipment remain unpaid and are recorded in trade and other payables.

See accompanying notes to the interim condensed consolidated financial statements.

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As of 12:32 PM ET today, the major Canadian stock indices have shown a blend of positive and negative movements.

The S&P/TSX Composite Index is up by 0.41%, currently trading at 24,890.70 CAD, reflecting overall strength in Canada’s broad market.

Meanwhile, the S&P/TSX SmallCap Index has experienced a decline of −0.82%, with a value of 819.35 CAD, indicating weaker performance among smaller companies.

The S&P/TSX 60 Index, which tracks the largest 60 stocks on the Toronto Stock Exchange, has gained 0.70%, reaching 1,496.91 CAD, supported by solid performance from the top-tier companies.

Finally, the S&P/TSX Capped Financial Index is down by −0.44%, standing at 475.14 CAD, reflecting some pressure on Canada’s financial sector.

Disclaimer: This article is purely for information purpose and does not constitute any financial advice.

This section is

Partnership Content supplied

by GlobeNewswire

Author of the article:

GlobeNewswire

Published Nov 12, 2024  •  5 minute read

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MONTREAL, Nov. 12, 2024 (GLOBE NEWSWIRE) — Osisko Development Corp. (NYSE: ODV, TSXV: ODV) (“Osisko Development” or the “Company“) is pleased to announce the successful closing of its previously announced private placement of 31,946,366 units of the Company (“Units“) at a price of US$1.80 per Unit, including the exercise in full of the Agents’ option, for aggregate gross proceeds of approximately US$57.5 million (the “Offering“). The Offering included a lead order from Condire Investors, LLC (“Condire“), an investment firm based in Dallas, Texas, resulting in an approximate 8.8% holding in the Company’s issued and outstanding common shares immediately following the closing of the Offering (on a non-diluted basis). Concurrently with the Offering, the Company and Condire have agreed to find a mutually agreeable addition to the Company’s Board of Directors or, alternatively, a Board observer.

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Sean Roosen, Chair and CEO of Osisko Development, commented:
“The closing of this significantly oversubscribed offering – alongside the recently closed successful US$34.5 million non-brokered offering – places the Company in an excellent position to execute on key project de-risking milestones and pre-construction activities for the Cariboo Gold Project, including completion of an updated optimized feasibility study expected in Q2 2025. We are very excited to welcome Condire as a prominent shareholder. The strong support received in this offering from Condire and a number of other large long-term focused institutional investors is a testament to the quality and value of the Cariboo project along with a positive endorsement of our team. With an improved balance sheet and capital structure, the Company is primed for success ahead of a pivotal year.”

Each Unit consists of one common share of the Company (each, a “Common Share“) and one Common Share purchase warrant (each, a “Warrant“). Each Warrant shall entitle the holder thereof to purchase one Common Share (each, a “Warrant Share“), at a price of US$3.00 per Warrant Share on or prior to October 1, 2029. The Warrants acquired by Condire under the Offering are subject to a blocker provision, which limits Condire’s exercise of any Warrants that, upon giving effect to such exercise, would cause the Common Shares owned by Condire to be equal to or exceed 10% of the issued and outstanding Common Shares.

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The Offering was conducted on a “best efforts” agency basis by National Bank Financial Inc., as lead left agent, and Cantor Fitzgerald Canada Corporation and Eight Capital, as lead agents (collectively, the “Agents“). In connection with the Offering, the Agents were paid a cash commission equal to 4.5% of the aggregate gross proceeds of the Offering.

The Company intends to use the net proceeds of the Offering towards the advancement of its Cariboo and Tintic projects, to partially repay its existing credit facility and for general corporate purposes. All securities issued under the Offering will be subject to a hold period expiring four months and one day from the date of issue pursuant to applicable Canadian securities laws. The Offering remains subject to final acceptance of the TSX Venture Exchange.

The securities have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any U.S. state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the “United States” or “U.S. persons” (as such terms are defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and all applicable U.S. state securities laws or compliance with an exemption from such registration requirements. This news release is not an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction.

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ABOUT OSISKO DEVELOPMENT CORP.

Osisko Development Corp. is a North American gold development company focused on past-producing mining camps located in mining friendly jurisdictions with district scale potential. The Company’s objective is to become an intermediate gold producer by advancing its 100%-owned Cariboo Gold Project, located in central B.C., Canada, the Tintic Project in the historic East Tintic mining district in Utah, U.S.A., and the San Antonio Gold Project in Sonora, Mexico. In addition to considerable brownfield exploration potential of these properties, that benefit from significant historical mining data, existing infrastructure and access to skilled labour, the Company’s project pipeline is complemented by other prospective exploration properties. The Company’s strategy is to develop attractive, long-life, socially and environmentally sustainable mining assets, while minimizing exposure to development risk and growing mineral resources.

For further information, visit our website at www.osiskodev.com or contact:

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CAUTION REGARDING FORWARD LOOKING STATEMENTS

This news release contains “forward-looking information” (within the meaning of applicable Canadian securities laws) and “forward- looking statements” (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”, “estimate”, “propose”, “project”, “outlook”, “foresee” or similar words suggesting future outcomes or statements regarding any potential outcome. Such statements in this news release may include, without limitation, statements pertaining to the use of the net proceeds from the Offering and the results therefrom; the results of derisking programs at the Cariboo project; the results and timing of the updated feasibility study at the Cariboo project; progress in respect of pre-construction activities at the Cariboo project; and the ability to obtain the final acceptance of the TSX Venture Exchange. Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Actual results could differ materially due to a number of factors, including, without limitation, satisfying the requirements of the TSX Venture Exchange (if at all). Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

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Lutfy will retain approximately 87 percent of the company and control 98.5 percent of the voting rights, assuming underwriters do not exercise an option to sell more shares.

The IPO will list on the Toronto Stock Exchange under the symbol GRGD. Major institutions including Goldman Sachs Canada Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., and TD Securities Inc. are leading the offering, with additional support from Scotia Capital Inc. and Desjardins Securities Inc.

Employing around 6,000 people, Groupe Dynamite operates nearly 300 stores across Canada and the US, offering “fashion-forward” clothing marketed with “bold, youthful imagery.”

The IPO filings show that Groupe Dynamite recorded $888m in revenue and a net income of $128m over the 12 months ending August 3, while reporting $469m in debt.

Lutfy, a 60-year-old Montreal businessman, led a rapid revenue boost by restructuring the company’s real estate leases during creditor protection amid the Covid pandemic.

Meet the wealthiest Indian in Canada amassing a USD 2.1 billion net worth through his business and investment expertise.

Shopify Inc.’s shares leapt 26 per cent on the Toronto Stock Exchange after the company reported third-quarter earnings that topped analysts’ forecasts and projected better-than-expected results for the current quarter, the year’s busiest shopping season.

The Ottawa e-commerce company generated US$2.16-billion in revenue in its third quarter, up 26 per cent from last year and exceeding analyst consensus estimates for the seventh quarter in a row. Net income, excluding the impact of equity investments, nearly doubled to US$344-million, up from US$173-million.

Shopify provides e-commerce tools for businesses and is used in 175 countries.

Meanwhile, the company generated substantial liquidity with US$421-million in free cash flow, up from US$276-million last year. This is far above analyst consensus of US$364-million, according to Scotiabank analyst Kevin Krishnaratne.

For the next quarter, Shopify is expecting revenue growth in the mid-to-high 20-per-cent range, as well as the sixth quarter in a row of double-digit free cash flow (FCF) margin, according to Martin Toner, analyst at ATB Capital Markets. FCF margin is a metric of free cash flow as a percentage of revenue, and a measure of how efficiently the company turns sales into cash to spend on expanding.

“The Q3 results and guidance should give investors confidence that Shopify’s growth story is intact,” said Mr. Toner, calling the company’s revenue, free cash flow and guidance “impressive.”

Shares of Shopify reached $158.66 on the Toronto Stock Exchange as of 11:00 a.m. Tuesday, up 26.5 per cent, reaching the highest point since January, 2022. This is on top of a 15-per-cent share price gain in the five days leading up to the earnings, reflecting hopes that the company was once again reaching the momentum that propelled it to pandemic highs.

In a Tuesday morning call with analysts, chief financial officer Jeff Hoffmeister said revenue was boosted by larger-than-expected gross merchandise value (GMV), or the value of the sales made by merchants over the company’s various platforms. Third quarter GMV rose 24 per cent to US$69.7-billion, up from US$56-billion last year and beating analyst consensus by US$2-billion.

When asked if the company expects any headwinds following a new U.S. administration, Mr. Hoffmeister said the company did not hear anything in president-elect Donald Trump’s campaign that would “impact the overall state of new business formation and entrepreneurship.”

The fourth quarter is typically a busy one for the company, given the high volume of sales during Black Friday, Cyber Monday and over the holidays.

The company’s revenue was also helped by growth from subscriptions revenue and the number of merchants on the platform. Monthly recurring revenue, which the company earns from subscriptions and contracts, was up 28 per cent, meeting analyst expectations, according to Royal Bank of Canada analyst Paul Treiber.

Shopify president Harley Finkelstein told analysts the company’s merchants benefited from new artificial intelligence tools which helped merchants find new audiences and automate customer service, as well as the company’s rollout of tax filing tools. This quarter, the company rolled out new financial tools for merchants, including trials of new loan structures in the U.S.

He emphasized the growth of its international markets (in 2023, revenue from outside North America made up less than a third of the company’s overall revenue), as well as its continued reach into the enterprise-level segment. During the quarter, the number of merchants with multiple physical locations doubled, he said.

When asked by an analyst how the company was preparing for changes to online shopping behaviour, given the rise of commerce through social media, Mr. Finkelstein said the company was ready to meet customers where they are, referencing e-commerce partnerships with YouTube, TikTok, Instagram and Spotify.

The company’s operating expenses were US$835-million, up 7 per cent from last year, driven by higher employee compensation, and higher marketing spend than last year, although the company said it spent less on advertising than initially expected. Mr. Hoffmeister said the company was maintaining a flat headcount and “discipline” in its internal systems to keep costs down.

Although the company’s take rate – the amount it makes from its vendors’ sales – was slightly below analyst expectations, analysts expect improvement as the company expands into new geographic and sector markets.

“We believe SHOP is adding more GMV from international and Enterprise where it’s still early for monetization, suggesting more upside to come as its product set matures in these markets,” said Scotiabank’s Mr. Krishnaratne in a note to investors Tuesday morning.

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