- In response to the ongoing impacts of COVID-19 and NFI's
concern for employee health and welfare, the Company will extend
temporary idling of its new bus and coach production facilities
into May 2020.
- NFI continues to maintain essential technical, operational, and
administrative staff as well as its aftermarket parts, service, and
support business to support customers and complete and deliver
vehicles-in-progress.
- NFI believes its existing liquidity and financial capacity are
currently sufficient to support operations, but is prudently
evaluating its options and is in advanced discussions with banking
partners regarding credit facility covenant relief and access to
additional capital.
WINNIPEG, April 6, 2020 /CNW/ - (TSX: NFI) NFI
Group Inc. ("NFI" or the "Company") today announced it
will extend the idling of nearly all bus and coach production
facilities to help ensure the safety of its employees, customers,
and suppliers during the ongoing COVID-19 pandemic. While the
Company has essentially idled production of new vehicles, it
continues to complete and deliver vehicles that were at various
stages of production (or work-in-progress), fulfill aftermarket
parts orders, and collect outstanding receivables. The Company has
also maintained a complement of staff to ensure it responds to
active and new procurements, supports vehicles in service, and
completes essential facility maintenance.
Based on information currently available and revised government
mandates, management anticipates new bus and motor coach production
may recommence operations in May
2020. Individual facility startup dates are likely to be
unique, based on local government directives, health advisories,
employee availability, and customer and supply chain readiness.
Financial Update
NFI's cost structure is largely variable and driven by
production. To reduce fixed costs management has implemented
numerous measures (detailed in the Company's March 23, 2020 press release) that have lowered
the Company's expected monthly cash outflows.
Based on current financial projections, management believes that
the Company's existing liquidity, combined with expected cash
receipts are sufficient to support its operations during this
period of uncertainty. Management believes it is prudent to
evaluate all options with respect to the Company's financial
liquidity to ensure the Company has the financial flexibility to
meet its financial obligations and its various stakeholders' needs
and expectations. The Company is in advanced discussions with
its banking partners to obtain covenant relief under its existing
credit facility and increase its access to capital.
Government Assistance Programs
NFI is also evaluating various Canadian, American, and UK
government financial assistance programs that have been created to
help address the impacts of the COVID-19 pandemic. One such program
is the U.S. government's Coronavirus Aid, Relief, and Economic
Security (CARES) Act, which includes dedicated support for transit
agencies across the U.S., which continue to provide an
essential service during the COVID-19 pandemic. Under the CARES
Act, Congress appropriated USD $25
billion to the Federal Transit Administration for urban and
rural transit agencies to support operating and qualified capital
expenses to prevent, prepare for, and respond to the COVID-19
pandemic.
This financial assistance represents approximately three times
the average annual funding that agencies would have typically
received had the pandemic not occurred. While the immediate focus
of fund allocation is on operational expenses to recover,
stabilize, and remobilize transit agencies, funds may also be used
for capital purchases of rolling stock with no local fund
matching requirement in order to access the funds.
"We are focused on balancing the needs of all NFI stakeholders.
At this time we have to prioritize the health and safety of our
team members, customers, and supplier partners. As a result,
extending the idling period of our new vehicle production is
necessary," said Paul Soubry,
President and Chief Executive Officer of NFI. "The COVID-19
pandemic is an unprecedented global crisis and we must remain
nimble as we navigate through this fluid environment. We were quick
to institute the appropriate measures with an emphasis on business
continuity and reducing cash expenditures. We expect these
measures, as well as securing additional financial flexibility
through our banking partners, will position us to resume normal
operations in an expedited manner when the situation allows."
About NFI
With more than 9,000 team members operating from 50 facilities
across ten countries, NFI is a leading independent global bus
manufacturer providing a comprehensive suite of mass transportation
solutions under brands: New Flyer® (heavy-duty transit
buses), Alexander Dennis Limited (single and double-deck buses),
Plaxton (motor coaches), MCI® (motor coaches),
ARBOC® (low-floor cutaway and medium-duty buses), and
NFI Parts™. NFI vehicles incorporate the widest range of drive
systems available including: clean diesel, natural gas,
diesel-electric hybrid, and zero-emission electric (trolley,
battery, and fuel cell). In total, NFI now supports over 105,000
buses and coaches currently in service around the world.
NFI common shares are traded on the Toronto Stock Exchange under
the symbol NFI. Further information is available at
www.nfigroup.com, www.newflyer.com, www.mcicoach.com,
www.arbocsv.com, www.nfi.parts, www.alexander-dennis.com,
and www.carfaircomposites.com.
Forward-Looking Statements
Certain statements in this press release are "forward looking
statements", which reflect the expectations of management regarding
the Company's future growth, liquidity, cost reduction plans,
results of operations, performance and business prospects and
opportunities. The words "believes", "anticipates", "plans",
"expects", "intends", "projects", "forecasts", "estimates", "may",
"will" and similar expressions are intended to identify forward
looking statements. These forward-looking statements reflect
management's current expectations regarding future events and
operating performance and speak only as of the date of this press
release. Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved.
Actual results may differ materially and adversely from
management expectations as projected in such forward-looking
statements for a variety of reasons, including, but not limited to,
the magnitude and length of the global, national and regional
economic and social disruption being caused as a result of the
global COVID-19 pandemic; the impact of national, regional and
local governmental laws, regulations and "shelter in place" or
similar orders relating to the COVID-19 pandemic which materially
adversely impact the Company's ability to continue operations;
additional partial or complete closures of one, more or all of the
Company's facilities and work locations (including to protect the
health and safety of the Company's employees) or the extension of
such closures as a result of the COVID-19 pandemic; continuing and
worsening supply delays and shortages of parts and components and
disruption to labour supply as a result of the COVID-19 pandemic;
the COVID-19 pandemic will likely adversely affect operations of
customers as a result of shutdowns and/or disruptions to their
operations and the services provided to their customers and end
users; the Company's ability to successfully negotiate and obtain
acceptable covenant relief under its credit facility and to obtain
access to additional capital; the Company's financial performance
and condition, obligations, cash flow and liquidity and its ability
to maintain compliance with the covenants under its credit
facility, which may also negatively impact the ability of the
Company to fund dividends; and the other risks and uncertainties
detailed in the disclosure documents filed with the Canadian
securities regulatory authorities and available on SEDAR at
www.sedar.com. These above risks relating to the impact of the
COVID-19 pandemic may materially adversely impact the Company's
business, operating performance and financial condition, including
as a result of reduction to the Company's cashflow, liquidity and
its ability to maintain compliance with covenants under its credit
facility. There can be no assurance that the Company will be able
to obtain covenant relief under its credit facilities or access
additional capital or access to government financial support or as
to when production operations will commence.
The Company cautions that due to the dynamic, fluid and highly
unpredictable nature of the COVID-19 pandemic and its impact on
global and local economies, businesses and individuals, it is
impossible to predict the severity of the impact on the Company's
business, operating performance and financial condition and any
material adverse effects could very well be rapid, unexpected and
may continue for an extended and unknown period of time. The extent
of such impact will depend on future developments, which are
unpredictable, including new information which may emerge
concerning the spread and severity of COVID-19 and actions taken by
governments and health organizations around the world to address
its impact, among others.
Due to the potential impact of these and other factors, the
Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, unless required by
applicable law.
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SOURCE NFI Group Inc.