Q1 2013 HIGHLIGHTS

• Revenue rose by 8% to $1.6 billion, driven by significantly higher revenue from South America, which more than offset modest revenue reduction in Canada and the UK & Ireland. 
• Product support revenue increased by 13% to record levels reflecting incremental revenue from the expanded mining product line (the former Bucyrus International Inc. business) and solid machine utilization in mining and construction.
• EBIT grew by 21% to $117 million and consolidated EBIT margin was 7.4% compared to 6.6% in Q1 2012, reflecting higher EBIT margin in Canada.
• Basic EPS was $0.43; up by 16% from Q1 2012, marking the best first quarter EPS on record.
• Free cash flow was $93 million use of cash, a significant improvement from $223 million cash usage in the first quarter of 2012.

The Company raised its quarterly dividend by 9% to $0.1525 per share, reflecting the expectation for earnings growth and strong free cash flow potential.

Finning International Inc. (TSX: FTT) reported quarterly revenues to $1.6 billion, an 8% increase over Q1 2012. Strong revenue growth in South America more than offset lower revenues from Canada and the UK and Ireland. Product support revenues grew by 13% over Q1 2012, reaching a new record. Quarterly earnings before finance costs and income taxes (EBIT) rose by 21% to $117 million. Quarterly EBIT margin was 7.4% compared to 6.6% in Q1 2012, resulting from improved EBIT margin in Canada. Basic earnings per share (EPS) increased by 16% from Q1 of last year to $0.43. First quarter results included severance costs of approximately $4 million or $0.02 per share, and reflected the adoption of the amendments to International Accounting Standard (IAS) 19, which reduced results by approximately $0.02 per share in both 2013 and 2012.

 “Our ability to grow revenues during heightened economic uncertainty clearly demonstrates the benefit of our broad end-market and geographic diversification, as well as our product support capabilities. As expected, slower activity in mining translated into lower order intake. However, our backlog remains solid, and high machine utilization levels are expected to continue driving strong product support revenues in 2013,” said Mike Waites, president and CEO of Finning International Inc. “Our priorities for the year ahead remain unchanged. We are executing on operational excellence initiatives with rigour and discipline to achieve sustainable improvements in our operating profitability. Based on our capabilities to generate strong free cash flow and our expectation for earnings growth, we are pleased to increase our quarterly dividend by 9% to 15.25 cents per share.”

Consolidated 2013 revenues are expected to be flat to up 10% over 2012, driven by product support revenues which benefit from a full year's contribution from the expanded mining product line. For 2013, earnings are expected to grow at a higher rate than revenue. The Company’s net debt to total capital ratio is projected to decline to the 35-45% target range by the end 2013.

The Company aims to improve operating profitability through advancing operational excellence. The Company targets to achieve EBIT margin of 9-10% and ROE exceeding 18%, on a consistent basis. The timing of the achievement of the EBIT margin target will depend on the Company’s ability to successfully execute its operational excellence strategy, and may also be influenced by market conditions.

Download Q1 2013 results and listen to investor call webcast