The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: David Ocampo - Cormark Securities Inc. - Analyst
: I just wanted to start on tariffs. I know many of your peers have already answered a number of questions over the last two days or so. But I was
wondering if you guys have seen any erratic changes to production schedules just from your customers just given the ongoing daily change in
tariff policy?
And then as a follow-on to that, like how quickly can you guys adjust your labor force? Should we just look at the pandemic as kind of a guidepost
of what could happen if the 25% tariffs come to fruition?
Question: David Ocampo - Cormark Securities Inc. - Analyst
: Yes. That totally makes sense. And hopefully, logic does prevail there. But just moving on to the second line of question. I mean, you guys talked
about the impairment charge that you took in the quarter.
It does seem like it is largely or mostly responsible to the lower adoption of EV vehicles. But when we think about your commercial settlements
that you guys are negotiating or having negotiating, are negotiated, are they offsetting a majority of this write-down or is there still quite a bit of
big gap between the write-down and what you're ultimately receiving from the OEMs?
Question: David Ocampo - Cormark Securities Inc. - Analyst
: And then just as a clarification question. I don't think I heard it on the call, but the SG&A cost savings of $50 million, what's the potential cash charge
to that? And is that $50 million of savings an exit '25 run rate, so something that we could expect to flow through in '26?
Question: Michael Glen - Raymond James Ltd. - Analyst
: Okay. So I guess my first question is, I'm looking at the actions you're taking with Europe and as well as China. So like should we think about you
completely exiting those markets at some point in the future?
Question: Michael Glen - Raymond James Ltd. - Analyst
: Okay. And then the commentary you gave on the real estate assets being worth more than double what book value of those assets are, like can
you just try -- give a little bit more information on the potential? Is there an opportunity for you to monetize those assets? I'm just trying to understand
what you could do with those real estate assets.
Question: Michael Glen - Raymond James Ltd. - Analyst
: And then one of your -- General Motors has made some commentary suggesting that they could move some production to -- they have some
production capacity available that they could transfer into -- to try to circumvent some of the tariffs in Mexico, I believe. Would you -- and you're
indicating that you have some capacity available in the US Would -- I'm just trying to understand. With some of the moves that your suppliers are
talking about, would you have capacity aligned to supply them in those markets? Or it would be much more complicated than that?
Question: Michael Glen - Raymond James Ltd. - Analyst
: Thanks for the information.
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MARCH 06, 2025 / 10:30PM, MRE.TO - Q4 2024 Martinrea International Inc Earnings Call
Question: Brian Morrison - TD Securities, Inc. - Analyst
: So Rob, you're always giving opinions here. And I want you to follow on what you were talking about with protecting the Chinese from coming
into North America. Tariffs don't -- aren't sustainable. It's going to disrupt the industry. It's a capital-intensive move.
It's going to take a long time frame to do so. So I asked this question last night to one of your peers. What does it take to get to the endgame? Like
is it moving some of the US pickup trucks assembly from Mexico to the US? Is it future manufacturing commitments to the US? What do you think
the endgame is to get this issue behind us?
Question: Brian Morrison - TD Securities, Inc. - Analyst
: Yes, I agree. I'm just trying to figure out what makes the administration think that they have a win so that we can get beyond the tariffs.
Question: Brian Morrison - TD Securities, Inc. - Analyst
: Right. I appreciate that. Can I ask a couple of quick questions as well. So -- and this is more on the financial side. So free cash flow, $150 million,
lease liability, $50 million cash, reflecting charges $55 million dividend.
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MARCH 06, 2025 / 10:30PM, MRE.TO - Q4 2024 Martinrea International Inc Earnings Call
That gives you about $30 million of free cash flow this year. I understand you want to keep the cash cushion. I respect that. But then you have this
graph NanoXplore, it now makes up 17%, incredibly 17% of your market cap. Is this -- I know you have a long-term supply agreement.
Is this the best use of capital at this time? I mean, you could buy back 20% of your company with proceeds from that. I'm just curious as to what
your thoughts are on that.
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