Martinrea International Inc. Releases December 31, 2008 Annual Results Adjusting to a Difficult Automotive Environment

TORONTO, ONTARIO, Mar 30 (MARKET WIRE) --
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 fiscal year and its fourth quarter ended
December 31, 2008. Martinrea currently employs approximately 4,400
skilled and motivated people in 30 plants in Canada, the United States,
Mexico, and Europe.

REVENUE

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Year ended December 31
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%
2008 2007 Change Change
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Revenue 1,557,021 2,002,461 (445,440) (22.2%)
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Revenue for the year ended December 31, 2008 has decreased from the
prior year by 22.2% primarily due to significant production reduction by
customers in North American light vehicle platforms as a result of the
North American economic recession, an appreciation of the Canadian dollar
versus the U.S. dollar in 2008 which resulted in a reduction in the
translation of U.S. dollar denominated revenues of approximately $11.8
million and customer pricing pressures that continue to be a normal part
of the North American automotive parts industry. Tooling sales relating
to new program launches increased by $1.2 million during 2008.

The Company's revenue for the fourth quarter of 2008 of $356.9 million
was lower than revenue for the fourth quarter of 2007 of $462.5 million
by $105.6 million primarily due to the significant reduction in volumes
in North American light vehicle platforms experienced during the fourth
quarter of 2008, especially related to light trucks. This decrease was
offset, in part, by a decline in the Canadian dollar versus the U.S.
dollar in the fourth quarter of 2008 in comparison to fourth quarter of
2007 which increased the translation of U.S. dollar denominated revenues
by $39.3 million. Tooling revenues increased by $30.6 million in the
fourth quarter of 2008 as compared to fourth quarter of 2007.

Revenue for the fourth quarter of 2008 of $356.9 million was $1.4 million
higher than the $355.5 million in revenue for the third quarter of 2008.
The increase in revenues is primarily due to tooling revenue increases of
$31.8 million in the fourth quarter of 2008 as compared to the third
quarter of 2008, that were offset by production reductions by customers
as a result of the North American economic recession. Excluding the
increase in tooling revenue for the fourth quarter of 2008 as compared to
the third quarter of 2008 production revenue decreased by $30.4 million.
This reduction in production revenue is consistent with volume reductions
by customers in fourth quarter of 2008 as compared to the third quarter
of 2008.

GROSS MARGIN

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Year ended December 31
----------------------
2008 2007 Change % Change
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Gross Margin 127,294 218,685 (91,391) (41.8%)
% of revenues 8.2% 10.9%
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Due to the adoption of the new CICA Handbook Section 3031,
Inventories, in 2008 the amortization of property, plant and equipment
("PP&E") that are directly related to production have been reclassified
to cost of sales. The comparative amounts for 2007 have also been
reclassified to conform to the current year's presentation.

Gross margin percentage of 8.2% for the year ended December 31, 2008 has
decreased by 2.7% compared to the prior year of 10.9%. The gross margin
percentage reduction is primarily due to under absorption of
manufacturing overhead as a result of low production volumes, change in
product mix resulting in significant reductions in the light truck and
sport utility platforms, an increase in tooling revenues with no
associated margin and continuous pricing pressures from customers that
continue to be a normal part of the North American automotive parts
industry.

Gross margin percentage of 4.1% for the fourth quarter of 2008 decreased
by 6.6% from the 10.7% gross margin percentage for the fourth quarter of
2007. The gross margin percentage reduction of 6.6% was primarily due to
under absorption of manufacturing overhead as a result of low production
volumes, change in product mix resulting in significant reductions in the
light truck and sport utility platforms, an increase in tooling revenues
with no associated margin, continuous pricing pressures from customers
that continue to be a normal part of the North American automotive parts
industry, and $7.5 million in relation to developmental and supplier
insolvency costs as discussed below in Adjustments to Net Income which
negatively impacted the gross margin in the fourth quarter of 2008 by
2.1%.

Gross margin percentage of 4.1% for the fourth quarter of 2008 has
decreased by 4.1% from 8.2% gross margin percentage for the third quarter
of 2008. The gross margin percentage reduction of 4.1% was due to under
absorption of manufacturing overhead as a result of low production
volumes, change in product mix resulting in significant reductions in the
light truck and sport utility platforms, an increase in tooling revenues
with no associated margin and continuous pricing pressures from customers
that continue to be a normal part of the North American automotive parts
industry.

The Company will continue its efficiency programs, the utilization of
available capacity and the rationalization of operating facilities as
necessary.

ADJUSTMENTS TO NET INCOME

As a result of the economic recession in North America that has caused
significant production reduction by customers and a number of
industry-related developments, and the rationalization of the Company's
manufacturing facilities, the Company recorded a number of unusual items
and other items, primarily in the fourth quarter of 2008. The Company
believes that it is useful to set out in detail these unusual and other
items as they are non-recurring and thus the Company's financial results
for 2008 may not be indicative of future results.

The Company reports its financial results in accordance with Canadian
GAAP. However, the Company has included certain non-GAAP financial
measures and ratios in this analysis 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 Canadian GAAP 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 Canadian GAAP.
Non-GAAP measures referred to in the analysis include "adjusted net
earnings", "adjusted net loss", "adjusted earnings per share on a basic
and diluted basis" and "adjusted loss per share on a basic and diluted
basis" and are as defined in the Table A and B sections below.

TABLE A

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Year ended December
31
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2008 2007 Change
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NET EARNINGS (PER CANADIAN GAAP) (A) (261,088) 60,465 (321,553)

Unusual Items:

Goodwill Impairment(1) 230,558 - 230,558

Property, Plant and Equipment Impairment(2) 17,733 3,958 13,775

Intangible Asset Impairment(3) 836 - 836

Employee Related Severance Costs(4) 37,445 - 37,445

Restructuring Costs(5) 12,777 - 12,777

Supplier Insolvency Costs(6) 3,372 - 3,372

Deferred Financing Costs(7) 1,243 - 1,243

Other Items:

Development Costs (8) 5,797 - 5,797

Valuation allowance on future tax assets (9) 2,100 - 2,100
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TOTAL UNUSUAL AND OTHER ITEMS
BEFORE TAX 311,861 3,958 307,903

Tax Impact of above items (26,533) (1,428) (25,105)
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TOTAL UNUSUAL AND OTHER ITEMS
AFTER TAX (B) 285,328 2,530 282,798

ADJUSTED NET EARNINGS (NON
CANADIAN GAAP) (A+B) 24,240 62,995

Number of Shares Outstanding
- Basic ('000) 71,826 65,617

Adjusted Basic Earnings Per Share 0.34 0.96

Number of Shares Outstanding
- Diluted ('000) 72,508 67,302

Adjusted Diluted Earnings Per Share 0.33 0.94
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TABLE B

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For the quarter ended
December 31
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2008 2007 Change
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NET EARNINGS (PER CANADIAN GAAP) (A) (286,520) 11,322 (297,842)

Unusual Items:

Goodwill Impairment(1) 230,558 - 230,558

Property, Plant & Equipment Impairment(2) 17,733 1,358 16,375

Intangible Asset Impairment(3) 836 - 836

Employee Related Severance Costs(4) 37,445 - 37,445

Restructuring Costs(5) 12,777 - 12,777

Supplier Insolvency Costs(6) 3,372 - 3,372

Deferred Financing Costs(7) 1,243 - 1,243

Other Items:

Development Costs(8) 5,797 - 5,797

Valuation Allowance on Future
Tax Assets(9) 2,100 - 2,100
-----------------------------

TOTAL UNUSUAL AND OTHER ITEMS
BEFORE TAX 311,861 1,358 310,503

Tax impact of above items (26,533) (490) (26,043)
-----------------------------

TOTAL UNUSUAL AND OTHER ITEMS
AFTER TAX (B) 285,328 868 284,460

ADJUSTED NET EARNINGS (NON
CANADIAN GAAP) (A+B) (1,192) 12,190

Number of Shares Outstanding
- Basic ('000) 71,826 70,456

Adjusted Basic Earnings Per Share (0.02) 0.17

Number of Shares Outstanding
- Diluted ('000) 72,426 72,035

Adjusted Diluted Earnings Per Share (0.02) 0.17
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(1) Goodwill Impairment

During the fourth quarter of 2008, as part of the annual goodwill
impairment assessment, the Company determined that the carrying value of
goodwill was impaired as a result of significant and sustained decline in
the market capitalization of the Company, the deteriorating macro
environment directly impacting the automotive industry and the
accelerated and significant decline in production volumes during the
fourth quarter of 2008. The goodwill as stated on the balance sheet had
resulted from two acquisitions made by the Company in 2002, when market
valuations were higher than at present.

The assessment involved using a combination of valuation approaches
including a market capitalization approach, a multiples approach and a
discounted cash flow approach. The market capitalization approach uses
the Company's publicly traded stock price to determine the fair value.
The multiples approach uses comparable market multiples to arrive at a
fair value and the discounted cash flow method uses revenue and expense
projections and risk-adjusted discount rates. The process of determining
fair value is subjective and requires management to exercise a
significant amount of judgment in determining future growth rates,
discount rates and other factors. Management concluded that an impairment
had occurred, and consequently the Company wrote off the entire carrying
value of goodwill through a charge to the consolidated statement of
earnings operations in the amount of $230.6 million. The goodwill
impairment charge is non-cash in nature and does not affect the Company's
liquidity, cash flows from operating activities, compliance with debt
covenants and is not reflective of the Company's ability to generate
future profits and cash flows.

(2) Property, Plant and Equipment ("PP&E") Impairment

During the fourth quarter of 2008, the Company determined that the
carrying value of certain PP&E was impaired as a result of the
deteriorating macro environment directly impacting the automotive
industry, the accelerated and significant decline in production volumes
during the fourth quarter of 2008 and excess available capacity at
certain Company facilities.

As a result of its review, the Company assessed the recoverability of
PP&E by determining whether the carrying value of such assets can be
recovered through undiscounted future cash flows. As the undiscounted
future cash flows was less than the carrying amount, the excess of the
carrying amount over the estimated fair value was recorded as an
impairment charge to the consolidated statement of operations of $17.7
million (2007 - $4.0 million). The PP&E impairment charge is non-cash in
nature.

(3) Intangible Asset Impairment

During the fourth quarter of 2008, the Company determined that the
carrying amount of certain intangible assets was impaired as a result of
the deteriorating macro environment directly impacting the automotive
industry.

As a result, the Company assessed the recoverability of intangible assets
by determining whether the carrying amount of such assets can be
recovered through undiscounted future cash flows. As the undiscounted
future cash flows was less than the carrying amount, the excess of the
carrying amount over the estimated fair value was recorded as an
impairment charge to the consolidated statement of operations of $0.8
million for intangible assets. The intangible asset impairment charge is
non-cash in nature.

(4) Employee Related Severance Costs

On April 23, 2008, Kitchener Frame Limited ("KFL"), a subsidiary of the
Company, informed its employees of the impending plant closure of the
Kitchener facility. The closure date of the plant was expected to occur
on April 23, 2009, with an option of the manufacturing operations being
extended until approximately July 2010, pending the extension of a
contract from one of its customers. However during the fourth quarter of
2008, Martinrea was notified by its customer that there would be no
extension of the contract and that the customer would terminate the
existing program as of December 23, 2008 and therefore production of
KFL's key products would end on that date. As a result of this notice,
the Company completed its closure plan for KFL and KFL's production
operations ceased on December 31, 2008. The complete wind up is scheduled
to be completed by April 2009. Accordingly the Company incurred a
significant amount of severance costs relating to the closure of KFL
which were accrued in accordance with the applicable accounting standards
in the fourth quarter of 2008.

In addition, severance costs were also incurred at other facilities as a
result of the closure of a facility in the UK, and the right-sizing of
the Company's Windsor, Ontario and Shelbyville, Kentucky facilities and
the accrual of costs related to the scheduled closure of another Canadian
facility in 2009.

(5) Restructuring Costs

In response to the significant decline in volumes in the fourth quarter
of 2008, lower future forecasted volumes and to realign its operations
the Company has taken certain initiatives to prepare for a profitable and
sustainable future. In so doing, certain restructuring costs of $12.8
million were incurred during the fourth quarter of 2008. These
initiatives include strict cost reduction measures across the entire
organization, consolidation of certain facilities, closing of the KFL
facility in Kitchener as discussed in "Employee Related Severance Costs"
above, the rationalization of excess capacity at certain facilities by
moving equipment and programs between facilities and other cash
preservation measures.

The Company will incur total restructuring costs of $62.0 to $65.0
million (combining this Item 5 with "Employee Related Severance Costs" in
Item 4 above) of which $50.2 million was expensed during 2008 and the
remaining amount of $11.8 to 14.8 million will be incurred during 2009 as
some costs did not meet the recognition criteria stipulated by GAAP for
expense recognition in 2008.

(6) Supplier Insolvency Costs

During 2008, a significant tooling supplier on one of the Company's
global programs terminated operations prior to the completion of the
tooling program. As a result of the supplier's insolvency, certain
unplanned costs were incurred to release product, tooling and dies from
tooling suppliers as well as transportation costs for the amount of $3.4
million. These additional costs were required to ensure the timely
completion of the global program. Costs of a similar nature may be
incurred in the future as key suppliers struggle in this economic
environment, although it is not possible to estimate these costs at this
time.

The Company continues to evaluate both customers and suppliers on a
regular basis to determine the risk and reduce the extent of these costs.

(7) Deferred Financing Costs

The balance of deferred financing costs of approximately $1.2 million was
written off in the fourth quarter of 2008 due to the amendment of lending
arrangements entered into by the Company on December 31, 2008 which
qualified as debt extinguishment in accordance with GAAP.

(8) Development Costs

In accordance with Canadian GAAP and the Company's accounting policies,
development costs including design engineering, design testing and
product prototyping are expensed in the year in which they are incurred.
Developmental costs are expensed in the year incurred, unless such costs
meet the criteria under GAAP for deferral and amortization. As a result
of the uncertainty surrounding precise future production volumes,
developmental costs of approximately $5.8 million were expensed as
incurred in the current year and quarter December 31, 2008.

(9) Valuation Allowance on Future Tax Assets

During 2008, the Company's valuation allowance increased by $2.1 million
against future tax assets in Europe and Mexico and was partially offset
by a reduction in the Canadian valuation allowance on pensions. The
valuation allowance at December 31, 2008 includes $11.3 million of
European non-capital loss carry forwards, $2.6 million of Mexican future
tax assets and $3.9 million of Canadian future tax assets relating
primarily to unrealized capital losses and pension liabilities.

NET EARNINGS / (LOSS)

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Year ended December 31
----------------------
2008 2007 Change
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Net earnings / (Loss) (261,088) 60,465 (321,553)
Earnings per common share
Basic (3.64) 0.92 (4.56)
Diluted (3.64) 0.90 (4.54)
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The net loss for 2008 of $261.1 million as compared to net earnings of
$60.5 million in 2007 was primarily attributable to a $445.4 million
revenue reduction in 2008 as a consequence of the North American economic
recession that has impacted customer volumes, the deterioration of gross
margin percentage discussed above in 2008 as compared to 2007, and the
adjustments to net income as discussed earlier in Table A.

Adjusted net earnings for 2008 as calculated in Table A are $24.2 million
or $0.34 adjusted earnings per share on a basic and $0.33 adjusted
earnings per share on a diluted basis in 2008 as compared to adjusted net
earnings for 2007 of $63.0 million or adjusted earnings per share of
$0.96 on a basic and $0.94 on a diluted basis. The reduction of adjusted
net earnings and adjusted earnings per share in 2008 as compared to 2007
is primarily on account of a $445.4 million revenue reduction in 2008 as
compared to 2007 and the deterioration of gross margin percentage
discussed above in 2008 as compared to 2007.

A net loss of $286.5 million or a loss per share of $3.99 on a basic and
diluted basis was realized for the fourth quarter of 2008 as compared to
net earnings of $11.3 million or earnings per share of $0.16 on a basic
and diluted basis in the fourth quarter of 2007 primarily due to $105.6
million revenue reduction in fourth quarter of 2008 as compared to fourth
quarter of 2007, deterioration of gross margin percentage as discussed
above for the fourth quarter of 2008 as compared to the fourth quarter of
2007 and the adjustments to net income as discussed earlier in Table B.

The adjusted net loss as calculated in Table B of $1.2 million or $0.02
adjusted loss per share on a basic and diluted basis was realized in the
fourth quarter of 2008 as compared to adjusted net earnings for the
fourth quarter of 2007 of $12.2 million or adjusted earnings per share of
$0.17 on a basic and diluted basis primarily due to a $105.6 million
revenue reduction in the fourth quarter of 2008 as compared to the fourth
quarter of 2007 and the deterioration of gross margin percentage as
discussed above for the fourth quarter of 2008 as compared to the fourth
quarter of 2007.

The net loss realized for the fourth quarter of 2008 of $286.5 million or
loss per share of $3.99 on a basic and diluted basis as compared to net
earnings of $4.2 million or earnings per share of $0.06 on a basic and
diluted basis in the third quarter of 2008 was primarily attributable to
a $30.4 million production revenue reduction in 2008 as a consequence of
the North American economic recession that has impacted customer volumes,
the deterioration of gross margin percentage discussed above in the
fourth quarter of 2008 as compared to third quarter of 2008, and the
adjustments to net income as discussed earlier in Table B.

Adjusted net loss as calculated in Table B would have been $1.2 million
or $0.02 adjusted loss per share on a basic and diluted basis in the
fourth quarter of 2008 as compared to third quarter of 2008 net earnings
of $4.2 million or earnings per share of $0.06 on a basic and diluted
basis primarily due to a $30.4 million production revenue reduction in
fourth quarter of 2008 as compared to the third quarter of 2008 and the
deterioration of gross margin percentage as discussed above for the
fourth quarter of 2008 as compared to the third quarter of 2007.

CAPITAL EXPENDITURES

Capital expenditures for the year ended December 31, 2008 totaled $66.4
million compared to $83.5 million for the year ended December 31, 2007.
The reduction of capital expenditures in 2008 is part of Company
initiatives to reduce capital spending and delay capital expenditures
where possible without delaying product launches. The capital
expenditures relate to new program launches such as the new Ajax facility
and press shops established in Tupelo and Hermosillo. The Company is
actively recycling equipment currently owned by the Company to reduce
capital spending where possible.

Capital expenditures in the fourth quarter of 2008 of $23.9 million were
marginally lower than capital expenditures in the fourth quarter of 2007
of $24.3 million because of new program capital and are completely
dependent on the milestones reached and timing of product launches.

The 2008 fourth quarter capital expenditures of $23.9 million are greater
than the $17.7 million spent during the third quarter of 2008.

Fred Jaekel, Martinrea's Chief Executive Officer, stated: "We have
described the automotive industry many times as a perpetual storm, where
many suppliers are suffering or dying. The year 2008 came in like a mild
shower, and ended like a gale force hurricane. Overall we experienced
declining revenues and lower volumes in 2008 as the global credit and
economic crisis in general and the severe contraction of the North
American, and global, automotive industry in particular took hold,
especially in the second half of the year. Revenues approximated $1.56
billion, including tooling, reflecting lower production volumes. We
remained profitable in each of the first three quarters of 2008, but
generated a net loss in the fourth quarter of 2008, as we recorded
impairment charges on goodwill; recorded an impairment of property, plant
and equipment; recognized certain restructuring charges connected with
the acquisition of the ThyssenKrupp Budd operations in 2006, and
particularly related to the closure of the Kitchener Frame plant
announced in the fourth quarter of 2008; and recognized certain other
restructuring charges and asset impairment charges reflecting a decline
in value of some long-lived assets. These amounts were substantial, but
also are non-operational and non-recurring."

Mr. Jaekel added: "Despite many of the challenges in the automotive
industry and in industrial operations in North America in 2008, we
continued to win new mandates from customers, and grew our customer base
in other areas. In the fourth quarter of 2008, we won both some new work
and takeover work. New awards included various stampings from Ford, GM
and Nissan across a range of mainly small and mid-size car platforms
totalling approximately $21 million commencing in 2011; some hot stamping
work from Chrysler relating to door beams for its LD program, totalling
approximately $6 million commencing in 2011; fuel and brake lines for the
new GM Volt of approximately $18 million commencing in 2010; and brake
lines for the Volkswagen Jetta commencing in 2011. In addition we were
awarded some significant takeover work as a result of the shrinkage of
the supplier base, both from consolidation of suppliers by our customers
and from competitors going out of business. In the fourth quarter of
2008, we were awarded approximately $39 million annualized in takeover
business, commencing in 2010, by GM and Ford, involving a variety of
stampings from GM on its light truck and Chevy Aveo programs and a
significant amount of fuel filler work from GM on various platforms and
Ford in respect of the Crown Victoria. In total, using projected volumes,
and in this environment actual volumes may vary, we were awarded a total
of approximately $91 million in the fourth quarter, with approximately
$58 million commencing in 2010 and $33 million commencing in 2011."

"Despite the downturn in the industry, our people continue to market
constantly, and we have won some very nice new work in 2009 to date,
including most significantly takeover business involving the purchase of
assets, in the United States and Mexico, from the SKD group," Mr. Jaekel
continued. "SKD is a metal former, with plants just outside Mexico City
and in Jonesville, Michigan. We bought the assets of both these plants
for a total of US $10 million, including the land, the building and all
the equipment. The Jonesville facility is a large one, of approximately
450,000 square feet, and is our first stamping facility in Michigan, an
area where we need more capacity to service our customers. We intend to
grow our metal forming business in Michigan. The Mexico facility is
smaller, but it gives us a foothold in the Mexico City area; our plants
to date have been in the north and western parts of Mexico. SKD customers
also resourced their work to us and supported the transaction. In
Jonesville, the largest customers are Honda, Ford and Chrysler, and in
Mexico customers include General Motors, Chrysler and Volkswagen.
Although volumes in the industry are currently down, annualized revenues
of these two plants were approximately $100 million in 2008. We are very
pleased with the acquisition of these assets and the business from our
customers. First, it is great adding Honda to our customer base. We hope
to grow with them. Second, as noted the locations are good for us. Third,
this transaction again shows that there are opportunities in difficult
times to acquire assets or business, at very reasonable prices, and to
provide solutions to our customers. I want to extend a warm welcome to
the people who have joined us."

Nick Orlando, Martinrea's President and Chief Financial Officer, stated:
"The current automotive crisis has been difficult but the Company is well
prepared to manage through these difficult economic times operationally
and financially. The Company is accustomed to expanding and contracting
operations to meet customer volumes due to its continuing efforts to
eliminate bureaucracy, promote personnel multitasking, constant attention
to operational efficiencies, re-use of existing plant and equipment and
the elimination of plants on a timely basis that are or will no longer be
required to satisfy customer needs." Mr. Orlando continued: "In the
fourth quarter of 2008 the Company made significant personnel reductions
on a permanent and temporary basis in order to anticipate the customer
volume reductions in December 2008 and extending into the first quarter
of 2009. Many of the Company plants and engineering offices were
temporarily closed in December 2008 and the temporary shut-downs were
continued into 2009. All non-essential expenditures were eliminated. As a
result of these cost minimization efforts the adjusted net loss before
unusual and other items for the fourth quarter of 2008 was $1.2 million
or a $0.02 adjusted loss per share on a basic and diluted basis. It is
important to note that the Company's operations were cash flow positive
in the fourth quarter of 2008 before unusual and other items. In addition
the 2009 cash requirement in regard to the $311.9 million of unusual and
other items recorded is only $38.6 million and this relates to total
restructuring costs of the Company. In order to complete the current
restructuring plan the Company will also have to accrue and pay an
additional $12 to $15 million in restructuring costs in 2009 that could
not be accrued at December 31, 2008 because they did not meet the expense
recognition criteria stipulated by Canadian generally accepted accounting
principles. Thus the total restructuring cost cash requirement in 2009
will range from $51 million to $54 million. This amount can be
comfortably satisfied by available working capital plus the sale proceeds
from the planned disposition of the Kitchener plant, land and building."

Mr. Orlando added: "Financially the Company ended the year with a healthy
working capital position of $187 million including $61 million in cash.
This healthy financial position is proving to be a great competitive
advantage in winning new work and buying new business assets. The $187
million of available financial capacity plus approximately $103 million
in bank lines will give the Company approximately $290 million of
financial capacity to withstand the current economic downturn, pay for
the completion of its restructuring plan and to make key well priced
investments such as the two SKD plants purchased that will help to
diversify our customer base and grow the business in the months and years
to come."

Mr. Orlando further stated: "In the first quarter of 2009 Company revenue
will range from $195 million to $215 million which is significantly below
the $434 million in revenue in the first quarter of 2008, primarily
because of the large decrease in customer production volumes. As a result
of the lower revenues the Company's operations will not be profitable in
the first quarter of 2009, but the cash outflow from operations excluding
restructuring costs should not exceed $4 million in the first quarter of
2009. In February 2009 Company revenues began to increase as compared to
January 2009 and March 2009 revenues exceeded those of February 2009. The
Company is anticipating higher production volumes in the second quarter,
and thus higher revenues."

Rob Wildeboer, Martinrea's Executive Chairman, stated: "While 2008 was a
difficult year for the industry, 2009 is expected to be even worse
overall. 2009 is expected to include massive industry restructuring in
North America and globally, involving a number of OEMs and auto
suppliers. Some of the Company's traditional customers are currently at
risk of insolvency if government financial assistance is not given.

Notwithstanding any government assistance that has been or may be
extended to major customers, such customers may seek bankruptcy
protection in order to restructure their business and operations. Since
OEMs rely on a highly interdependent network of suppliers, an OEM
bankruptcy, absent measures to ensure continued timely payment for
shipments from suppliers, could have a "domino effect", causing multiple
supplier bankruptcies and thus the complete seizure of the automotive
industry for a prolonged period of time. Let me be clear about our
thoughts on payments to suppliers. From our perspective, the key issue is
that our receivables be paid, on time, by our customers. This need to be
paid on a timely basis, on normal commercial terms, occurs whether or not
one of our customers files for bankruptcy, and that is the position we
have consistently taken ourselves, through our collaborations with the
Ontario, federal and even US governments personally or through the
industry associations that we are very involved in. We think that
position is reflected in the government's approach to financial
assistance. Minister Clement and the federal government has stated,
publicly, that suppliers need to be paid according to normal commercial
terms. In Canada, that is a condition of any financing offered to GM or
Chrysler, and of potential assistance to anyone else. In the US, the
government and our industry have looked at issues such as accelerated
payment, receivables insurance and government factoring through the TARP
plan. All reflect the fundamental reality that the automotive industry
could collapse, not if an OEM files pursuant to a structured insolvency
plan, for example, but if the supply base does not get paid. In fact,
from our perspective, a restructuring, in or out of bankruptcy, that
results in a stronger customer base for the long term, is a good thing.
We want healthy customers."

"We believe that the long term outlook of the automotive industry overall
is very challenging in the near term, and recovery of the overall North
America market will take time," Mr. Wildeboer added. "However, while
there are many challenges, opportunities will exist for innovative and
cost effective suppliers who build great products in the short, medium,
and longer term, and who survive current automotive and economic crises.
Growth at the supplier level will occur as OEMs reduce the number of Tier
1 suppliers, continue to outsource product, and provide opportunities for
new work and takeover business. We believe that an industry slow-down or
consolidation can be viewed as a strategic opportunity to win additional
business from competitors producing fluid management systems or metal
formed products. We believe people will continue to buy vehicles and
suppliers will be required to manufacture the product and our
capabilities provide us with the ability to capitalize on a broad range
of opportunities. We have always tried to capitalize upon opportunities,
and we have had success in doing so, through applying our strategies. We
did this in the past, we did this in 2008, and we will do this in 2009
and beyond. We have the people to do it. And, we think we remain strong
financially to take advantage of opportunities."

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

This press release contains forward-looking statements within the meaning
of applicable Canadian Securities laws including statements relating to:
the Company's efficiency programs, capacity utilization, continuous
improvement, and rationalization of operating facilities; automotive
industry outlook and future vehicle production; plant closures, asset
transfers and sales, the timing and quantum of severance and termination
benefit obligations; future restructuring efforts, goodwill and
intangible asset impairment; acquisition opportunities; new business
awards; automotive industry consolidation; and the Company's pursuit of
its business strategies. The words "expect", "anticipate", "estimate",
"may", "will", "should", "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,
those risks and uncertainties as set out under the heading "Risks and
Uncertainties" in the Company's Management's Discussion and Analysis
dated March 30, 2009 and those risks and uncertainties as set forth in
the Company's Annual Information Form and other public filings which can
be found at www.sedar.com. Actual results may differ materially from
those currently anticipated. Except as required by law, the Company has
no intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. These factors should be considered carefully, and readers
should not place undue reliance on the Company's forward-looking
statements.

A conference call to discuss those results will be held on Tuesday March
31, 2009 at 8:00 a.m. (Toronto time) which can be accessed by dialing
(416) 340-2216 or toll free (866) 898-9626. 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 (416)
695-5800 or toll free number (800) 408-3053 (conference id - 8238588#).
The rebroadcast will be available until Friday April 10, 2009.

MARTINREA INTERNATIONAL INC.
Consolidated Balance Sheets

December 31, 2008 and 2007
(in thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------

Assets

Current assets:
Cash and cash equivalents $ 60,965 $ 48,008
Accounts receivable 213,575 285,123
Other receivables 7,637 10,644
Income tax recoverable 16,035 -
Inventories (note 3) 132,084 168,878
Prepaid expenses and deposits 5,131 3,670
---------------------------------------------------------------------------
435,427 516,323

Future income tax assets (note 13) 55,651 36,938
Property, plant and equipment (note 5) 428,979 378,064
Goodwill (note 6) - 230,558
Intangible assets (note 6) 20,502 25,233
Other long-term assets (note 7) 116,239 132,288
----------------------------------------------------------------------------
$ 1,056,798 $1,319,404
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and accrued liabilities $ 228,553 $ 268,521
Income taxes payable - 17,691
Current portion of long-term debt (note 10) 20,428 18,590
---------------------------------------------------------------------------
248,981 304,802

Long-term debt (note 10) 101,364 81,028
Pension and other post-retirement
benefits (notes 11 and 12) 165,367 191,326
Future income tax liabilities (note 13) 22,789 19,418
Non-controlling interest 1,218 1,364

Shareholders' equity:
Share capital (note 14) 629,052 629,052
Notes receivable for share capital (note 14) (2,700) (2,700)
Contributed surplus (note 15) 34,478 29,337
Accumulated other comprehensive loss (13,212) (65,277)
Retained earnings (deficit) (130,539) 131,054
---------------------------------------------------------------------------
517,079 721,466
Guarantees and commitments (note 21)
Subsequent events (note 22)
----------------------------------------------------------------------------
$ 1,056,798 $1,319,404
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

On behalf of the Board:

"Fred Jaekel" Director

"Robert Wildeboer" Director

MARTINREA INTERNATIONAL INC.
Consolidated Statements of Operations

For the years ended December 31, 2008 and 2007
(in thousands of dollars, except per share amounts)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------

Sales $ 1,557,021 $ 2,002,461

Cost of sales (excluding amortization of property,
plant and equipment) 1,387,009 1,746,896
Amortization of property, plant and equipment
(production) (note 5) 42,718 36,880
----------------------------------------------------------------------------
Total cost of sales 1,429,727 1,783,776
----------------------------------------------------------------------------

Gross profit 127,294 218,685

Expenses:
Selling, general and administrative 85,202 108,198
Foreign exchange loss 2,174 4,643
Amortization of property, plant and equipment
(non-production) (note 5) 3,443 3,435
Amortization of intangible assets (note 6) 4,403 4,354
Impairment charge on goodwill, intangible assets
and plant and equipment (note 5 and 6) 249,127 3,958
Restructuring costs (note 8) 50,222 -
Interest on long-term debt 7,665 14,113
Other interest income, net (1,047) (2,755)
Gain on disposal of property, plant and equipment (492) (2,157)
Gain on sale of investment in Hy-Drive
Technologies Ltd. (note 4) - (2,205)
----------------------------------------------------------------------------
400,697 131,584
----------------------------------------------------------------------------

Earnings (loss) before income taxes and
non-controlling interest (273,403) 87,101

Income taxes (recovery) (note 13):
Current (2,649) 30,204
Future (9,519) (3,704)
----------------------------------------------------------------------------
(12,168) 26,500

Earnings (loss) before non-controlling interest (261,235) 60,601

Non-controlling interest (147) 136
----------------------------------------------------------------------------
Net earnings (loss) $ (261,088) $ 60,465
----------------------------------------------------------------------------

Earnings (loss) per common share (note 16):
Basic $ (3.64) $ 0.92
Diluted (3.64) 0.90

----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

MARTINREA INTERNATIONAL INC.
Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2008 and 2007
(in thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------

Net earnings (loss) $ (261,088) $ 60,465

Other comprehensive income, net of tax:

Unrealized gain / (loss) on translation of financial
statements of self-sustaining operations 52,065 (52,781)

Unrealized loss up to the date of disposal on assets
available for sale, net of income tax of $0 (2007 -
$18) - (87)

Reclassification adjustment for gains on assets
available for sale transferred to net earnings, net
of income tax of $0 (2007 - $376) - (1,829)
----------------------------------------------------------------------------
Other comprehensive income / (loss) 52,065 (54,697)
----------------------------------------------------------------------------
Comprehensive income / (loss) $ (209,023) $ 5,768
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

MARTINREA INTERNATIONAL INC.
Consolidated Statements of Changes in Shareholders' Equity

For the years ended December 31, 2008 and 2007
(in thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes Accum-
receiv- ulated
able other
for Contri- compre-
Share share buted hensive Retained
capital capital Surplus income Earnings Total
----------------------------------------------------------------------------
Balances,
December 31, 2006 493,358 (6,750) 25,632 (12,496) 70,589 570,333
Change in accounting
policies (note 1(v)) - - - 1,916 - 1,916
----------------------------------------------------------------------------
As restated,
January 1, 2007 493,358 (6,750) 25,632 (10,580) 70,589 572,249
Net earnings - - - - 60,465 60,465
Share issue in
private placement
(net of share issue
costs of $5,365 and
future tax recovery
of $1,718) 123,228 - - - - 123,228
Exercise of employee
options and
warrants 12,466 - (2,649) - - 9,817
Compensation expense
related to stock
options - - 6,354 - - 6,354
Repayment of note
receivable for
share capital - 4,050 - - - 4,050
Other comprehensive
loss - - - (54,697) -
(54,697)------------------------------------------------------------------------
---
Balances,
December 31, 2007 629,052 (2,700) 29,337 (65,277) 131,054 721,466
Change in
accounting
policies
(note 1 (v)) - - - - (505) (505)
----------------------------------------------------------------------------
As restated,
January 1, 2008 629,052 (2,700) 29,337 (65,277) 130,549 720,961
Net loss - - - - (261,088)(261,088)
Compensation expense
related to
stock options - - 5,141 - - 5,141
Other comprehensive
income - - - 52,065 - 52,065
----------------------------------------------------------------------------
Balances,
December 31, 2008 $629,052 $(2,700) $34,478 $(13,212)$(130,539)$517,079
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

MARTINREA INTERNATIONAL INC.
Consolidated Statements of Cash Flows

For the years ended December 31, 2008 and 2007
(in thousands of dollars)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------

Cash provided by (used in):

Operating activities:
Net earnings (loss) $ (261,088) $ 60,465
Items not involving cash:
Amortization of property, plant and equipment
(note 5) 46,161 40,315
Amortization of intangible assets (note 6) 4,403 4,354
Impairment charge on goodwill, intangible assets
and plant and equipment (note 5 and 6) 249,127 3,958
Amortization of deferred financing costs 1,672 428
Unrealized foreign exchange forward contracts 1,286 51
Future income taxes (9,519) (3,704)
Non-controlling interest (147) 136
Gain on disposal of property, plant and equipment (492) (2,157)
Gain on sale of investment in Hy-Drive Technologies
Ltd. (note 4) - (2,205)
Stock-based compensation 5,141 6,354
Pension and other post-employment benefits 5,052 6,322
Contribution made to pension and other
post-employment benefits (20,013) (22,613)
----------------------------------------------------------------------------
21,583 91,704

Changes in non-cash working capital items:
Accounts receivable 89,462 30,706
Other receivables 3,898 (5,092)
Inventories 40,796 1,240
Prepaid expenses and deposits (1,461) 4,413
Accounts payable and accrued liabilities (58,892) (81,396)
Income taxes payable / recoverable (39,549) 7,334
----------------------------------------------------------------------------
55,837 48,909
----------------------------------------------------------------------------

Financing activities:
Issue of share capital (net of share issuance costs)
(note 14) - 121,510
Repayment of notes receivable for share capital - 4,050
Exercise of warrants and employee options - 9,817
Increase in long-term debt 36,265 15,028
Repayment of long-term debt (18,995) (135,305)
----------------------------------------------------------------------------
17,270 15,100
----------------------------------------------------------------------------

Investing activities:
Finalization of ThyssenKrupp Budd acquisition (net
of cash acquired, and acquisition costs) - (944)
Purchase of property, plant and equipment (66,402) (83,475)
Proceeds on disposal of property, plant and
equipment 1,207 7,276
Proceeds on disposal of investment in Hy-Drive
Technologies Ltd. (note 4) - 3,745
----------------------------------------------------------------------------
(65,195) (73,398)
----------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash and
cash equivalents 5,045 (6,099)

----------------------------------------------------------------------------

Increase / (decrease) in cash and cash equivalents 12,957 (15,488)

Cash and cash equivalents, beginning of year 48,008 63,496

----------------------------------------------------------------------------
Cash and cash equivalents:
Cash 37,113 24,321
Money market funds 23,852 23,687
----------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 60,965 $ 48,008
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Supplemental cash flow information:
Cash paid for interest, net $ 4,547 $ 10,478
Cash paid for income taxes, net $ 23,161 $ 23,509

----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

Contacts:
Martinrea International Inc.
Nick Orlando
President and Chief Financial Officer
(416) 749-0314
(905) 264-2937 (FAX)

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