WINNIPEG,
Jan. 9, 2013 /CNW/ - (TSX:NFI)
(TSX:NFI.DB.U) New Flyer Industries Inc. ("New Flyer" or the
"Company"), the leading manufacturer of heavy-duty transit buses in
Canada and the United States, announced order activity
for the fourth fiscal quarter ended December
30, 2012 ("Q4 2012").
Order Activity, Option Expiry and
Deliveries
The total order activity in the second half of 2012 has improved
significantly relative to the previous four quarters and represents
the third consecutive quarter of improved order intake. The new
orders (firm and options) for Q4 2012 totaled 1,055 equivalent
units ("EUs"), which represents the highest level of order intake
by New Flyer in a quarter since the fourth quarter of 2008.
- New firm orders were received for 407 EUs with a total value of
$191.6 million, a significant
increase compared to firm orders of just nine EUs valued at
$3.8 million in the fourth fiscal
quarter ended January 1, 2012 ("Q4
2011").
- New options in Q4 2012 were received for 648 EUs worth
$273.1 million, compared to no new
options awarded in Q4 2011.
In addition, New Flyer was successful at
converting options for 190 EUs with a total value of $74.6 million in Q4 2012, as compared to 152 EUs
with a total value of $64.4 million
converted in Q4 2011.
(EUs) |
New Orders
(Firm and Options) |
New Orders
(Firm and
Options) in Last
Four Quarters |
Option
Conversions |
Option
Conversions in
Last Four
Quarters |
Q1 2011 |
131 |
2,045 |
87 |
769 |
Q2 2011 |
398 |
1,591 |
642 |
1,117 |
Q3 2011 |
102 |
880 |
328 |
1,133 |
Q4 2011 |
9 |
640 |
152 |
1,209 |
Q1 2012 |
28 |
537 |
148 |
1,270 |
Q2 2012 |
90 |
229 |
408 |
1,036 |
Q3 2012 |
447 |
574 |
224 |
932 |
Q4 2012 |
1055 |
1620 |
190 |
970 |
In Q4 2012 a total of 549 option EUs expired,
547 EUs of which related to the expiration of a five-year contract
with one US based customer whose fleet plan required no additional
buses of the type specified in the expiring contract. The
maximum term for a contract permitted by the US Federal Transit
Administration is five years. This customer has recently issued a
request for proposals for a subsequent five-year contract for
buses.
In December 2012,
New Flyer executed a contract with a certain US state which is a
standing offer under which any US transit agency may purchase
buses. Due to the nature of this standing offer, New Flyer
does not record any options in its backlog calculation.
216 EUs were ordered under the 2012 version of this contract during
fiscal year 2012, as compared to 36 EUs under the 2011
contract.
New Flyer delivered 387 EUs in Q4 2012, compared
to 470 EUs in Q4 2011. The reduced deliveries were caused by
a delay in receiving the notice to proceed ("NTP") for an order of
90 Xcelsior 60-foot articulated buses (180 EUs) in the third fiscal
quarter of 2012 ("Q3 2012") and approximately 30 EUs relating to
late completions due to a supplier quality issue which is being
rectified. This resulted in work-in-process (WIP) at the end
of 2012 totaling 225 EUs, or 42 EUs more than at the end of the
third fiscal quarter of 2012 ("Q3 2012").
The total backlog combined with the recent order
intake is expected to enable New Flyer to continue to average a
production line entry rate of approximately 36 EUs per week for
fiscal 2013.
Total Backlog
At the end of Q4 2012, the total backlog was comprised of 6,325
EUs, having a total value of $2.67
billion. Orders and contract documentation for 509 EUs with
five different customers were received just prior to the end of
2012. The Company is now preparing announcements outlining
the details of these contracts (which were already included in the
backlog), but first requires customer approval to issue the
announcements.
Order Backlog |
2012 (Current
Year) |
2011 (Prior
Year) |
(EUs) |
Firm Orders |
Options |
Firm Orders |
Options |
Ending backlog - Q3 2012
New orders in Q4 2012
Options exercised
Deliveries
Cancelled/Expired options |
1,462
407
190
(387)
- |
4,744
648
(190)
-
(549) |
1,785
9
152
(470)
- |
5,940
-
(152)
-
(167) |
Ending Backlog - Q4 |
1,672 |
4,653 |
1,476 |
5,621 |
The total backlog at Q4 2012 increased by 1.9%
from the backlog at the end of Q3 2012, resulting from an increase
in firm order backlog of 210 EUs which was offset by a reduction of
91 EUs in the option backlog. New Flyer's backlog consists of the
following mix of products, with clean propulsion vehicles (such as,
hybrid, CNG, LNG and electric trolley), representing approximately
61% of the total:
|
Firm EUs |
Option EUs |
Total |
35 and 40 foot buses |
640 |
2,141 |
2,781 |
60 foot articulated buses |
1,032 |
2,512 |
3,544 |
Total Backlog |
1,672 |
4,653 |
6,325 |
In fiscal year 2012, a total of 736 option EUs
expired or 10.4% of the total New Flyer backlog, compared to 463
options that expired in fiscal year 2011. Remaining options
included in the total backlog will expire, if not exercised, as
follows:
Option year of expiry |
2013 |
2014 |
2015 |
2016 |
2017 |
Total Options |
Remaining Option (EUs) |
3,146 |
423 |
503 |
41 |
540 |
4,653 |
At the end of the period, firm and option orders
of 630 new buses (801 EUs) for New Flyer were pending from a number
of customers where approval had been granted in Q4 2012 by the
customer's board, council, or commission, as applicable, but
purchase documentation had not yet been received by the Company and
therefore not yet included in the backlog.
In addition to these pending orders, the Company
was just advised by a major US public transit agency that New Flyer
had been selected to provide up to 900 40' CNG Xcelsior buses (900
EUs) of which 550 are firm orders and 350 are options which may be
exercised over the next five years. The agency has issued New
Flyer a letter of Intent to Award and has advised that it will
present its recommendation for award to its Systems and Safety
Operations Committee and then to its board of directors for
approval by the end of January
2013. An NTP would be issued if the award is approved
by its board of directors, at which time New Flyer would then add
the 900 EUs to the backlog.
New Flyer Bid Universe
The bid universe was created by New Flyer in 2008 as an indicator
of the forecast for overall transit bus market demand and active
bids. The bid universe is a point-in-time snapshot of the
estimated EUs for: all bids received and in process of review at
New Flyer, bids submitted by New Flyer awaiting customer action,
and management's forecast of all expected EUs to be placed out for
bid over the next five years.
|
Bids (EUs)
in Process |
Bids (EUs)
Submitted |
Forecasted New
Procurements
(EUs) for the Next
5 years |
Total EUs |
Q4 2011 |
1,848 |
2,186 |
9,266 |
13,300 |
Q1 2012 |
2,390 |
3,107 |
9,603 |
15,100 |
Q2 2012 |
2,156 |
4,574 |
8,454 |
15,184 |
Q3 2012 |
3,334 |
2,542 |
11,854 |
17,730 |
Q4 2012 |
4,214 |
4,626 |
10,613 |
19,453 |
Procurement activity has increased significantly
throughout fiscal 2012, as evidenced by the total bid universe now
at 19,453 EUs, representing an increase of 46% compared to Q4
2011. The bid universe is now at its highest level since New
Flyer began tracking it in 2008.
In addition to the increase in the bid universe,
management believes the overall transit market continues to show
other positive signs of recovery. Preliminary data from the data
alert issued by the Rockefeller Institute on December 13, 2012 regarding U.S. state tax
collections shows an increase in the third quarter of 2012 for the
11th consecutive quarter, with a reported 2.1% increase
over the prior year.
The latest data from the American Public
Transportation Association's (APTA) ridership report indicated an
increase of 1.14% in all modes of U.S. transit ridership during the
third quarter of 2012 compared with the previous year, with
specific bus ridership essentially flat. At September 30, 2012, the report indicates a
year-to-date increase in ridership of 2.60% in 2012 as compared to
2011, with bus ridership up by 1.76% during the same period.
The same report indicates Canadian ridership increased by 1.44% in
all modes of transit ridership during the third quarter of 2012,
and increased 2.27% year-to-date as compared to the previous
year.
New Flyer Aftermarket
Gross orders received by New Flyer's aftermarket business during Q4
2012 for core parts sales increased 1% compared to Q4 2011.
Full year 2012 gross orders however were $118.6 million, an increase of 3.7% compared to
full year 2011.
In Q4 2012, a major US public transit agency
advised that its board of directors had approved the award of
contracts for an overhaul and upgrade program for over 1,000 New
Flyer buses that were delivered between 2006 and 2009. This
type of program is not unusual as many transit agencies conduct a
significant mid-life program to ensure that transit buses operate
efficiently throughout their intended life. New Flyer bid
certain elements of the program directly and bid other elements in
cooperation with local US based partners. Once the contact is
formally awarded, management expects to supply parts and services
to the customer totaling approximately $80
million over the next three years in support of the
customer's mid-life program. Management expects to receive
the NTP in the coming months.
NOTE: All dollar amounts are stated in US
currency based on an exchange rate of US $1.00 = CAD $0.9965
to calculate the value of the Canadian contracts in this
release.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses
in Canada and the United States. The Company's three
manufacturing facilities - in Winnipeg,
MB; St. Cloud, MN and
Crookston, MN - are all ISO 9001,
ISO 14001 and OHSAS 18001 certified. The Company currently operates
a parts fabrication facility in Elkhart,
IN and four parts distribution centers in Winnipeg, MB; Brampton, ON; Erlanger, KY and Fresno, CA. The Company also operates a New
Product Development center in Winnipeg,
MB and a service center in Arnprior, ON.
With a skilled workforce of over 2,000
employees, New Flyer is a technology leader, offering the broadest
product line in the industry, including drive systems powered by
clean diesel, LNG, CNG, electric trolley as well as
energy-efficient diesel-electric hybrid vehicles. New Flyer has
delivered over 32,000 heavy-duty buses in Canada and the
United States. All products are supported with an
industry-leading, comprehensive parts and service network. Further
information is available on New Flyer's web site at
www.newflyer.com.
The common shares and convertible unsecured
subordinated debentures of New Flyer are traded on the Toronto
Stock Exchange under the symbols NFI and NFI.DB.U,
respectively.
Forward-Looking Statements
This press release may contain forward-looking statements relating
to expected future events and financial and operating results of
the Company that involve risks and uncertainties. Although the
forward-looking statements contained in this press release are
based upon what management believes to be reasonable assumptions,
investors cannot be assured that actual results will be consistent
with these forward-looking statements, and the differences may be
material. Actual results may differ materially from management
expectations as projected in such forward-looking statements for a
variety of reasons, including market and general economic
conditions and economic conditions of and funding availability for
customers to purchase buses and to purchase parts or services,
customers may not exercise options to purchase additional buses,
the ability of customers to terminate contracts for convenience and
the other risks and uncertainties discussed in the materials filed
with the Canadian securities regulatory authorities and available
on SEDAR at www.sedar.com. Due to the potential impact of these
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.
SOURCE New Flyer Industries Inc.