- New Flyer to rationalize to a common Xcelsior®
platform for all heavy-duty and BRT transit buses
- Allows for enhanced New Flyer lifecycle service, parts and
customer support programs
- Production of NABI LFW and BRT models to be phased out, with
the Anniston, Alabama facility
transitioning to Xcelsior in the second half of 2015
- Aggressively promoting MiDi®, New Flyer's
medium-sized, low-floor bus, now in production in St Cloud, Minnesota
- Enables transition to common information technology
infrastructure and provides opportunities for cost reduction and
avoidance and sourcing synergies to enhance New Flyer's overall
competitiveness
WINNIPEG, June 24, 2014 /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 today plans to focus on a single
heavy-duty transit and BRT bus platform that features its
world-class Xcelsior.
Xcelsior is the latest generation of New Flyer's low-floor
vehicle platform that revolutionized North American transit in the
early 1990s. Xcelsior comes with a variety of propulsion
options including clean diesel, natural gas, diesel-electric
hybrid, electric-trolley, and now, zero emission battery-electric.
Similar to New Flyer's previous bus models, Xcelsior is
customized and configured to meet each customer's unique
specifications. New Flyer plans to further enhance its BRT
styling options for the Xcelsior platform by building on NABI's
extensive BRT experience and New Flyer's customer input.
"New Flyer has made significant investments to make Xcelsior a
world-class product. Our focus on a single heavy-duty bus
platform enhances our ability to innovate, optimize our supply
chain, improve product quality and enhance our competiveness," said
Paul Soubry, New Flyer's President
and Chief Executive Officer. "We will transition production
at NABI in Anniston, AL from the
LFW and BRT to Xcelsior, which enables us to avoid redundant
product upgrade costs and duplicate support infrastructure and
demonstrates our continued investment in New Flyer's future."
Through the transition, New Flyer expects to:
- Improve its competiveness in the U.S. and Canadian markets by
leveraging its combined bus volume, production, and purchasing for
greater efficiencies,
- Streamline design, sourcing, standardization, and overhead for
better product control (such as eliminating redundancy and future
costs in designing products, including refreshing bus and
propulsion platforms, testing and engineering), and
- Make product enhancements and optimize aftermarket support to
better serve customer needs.
"New Flyer acquired North American Bus Industries, Inc. in
June 2013 to broaden our market
position, to improve our technology leadership and to expand our
aftermarket parts business, while providing public transit
operators with long-term stability and excellence in product
support. Today's announced plan is the natural evolution and
optimization of product lines at New Flyer and NABI," Soubry
explained.
New Flyer expects to deliver orders as previously committed and
to provide support for NABI customers of the LFW and BRT products
for as long as those buses are in service. A number of NABI
customers have already indicated an interest in transitioning to
Xcelsior. The Company believes customers will benefit from
the enhancements that result from its focus on a single heavy-duty
platform.
"With the transition of the Anniston facility, we will manage the
potential people impact over the coming months through
redeployment, retirements and job attrition, where possible,"
Soubry said. "We truly appreciate our employees' dedication,
hard work and ongoing efforts at New Flyer and NABI and for their
focused commitment to our customers each and every day."
During this transition period, management expects to invest
approximately $20 million in direct
operating costs and capital expenditures to complete the
transition, utilizing operating cash flow and current credit
facilities. Management anticipates these direct operating and
capital expenditures will be paid back through captured cost
reductions and synergies within approximately two to three years.
Management expects to maintain the Company's dividend policy.
Unless otherwise indicated all monetary amounts in this news
release are expressed in U.S. dollars.
About New Flyer
New Flyer is the leading manufacturer
of heavy-duty transit buses in the United
States and Canada. The Company is the industry
technology leader and offers the broadest product line of transit
buses including drive systems powered by: clean diesel, natural
gas, diesel-electric hybrid, electric trolley and now battery
electric. All buses are supported by an industry-leading
comprehensive warranty and support program, and service
network. New Flyer also operates the industry's most
sophisticated aftermarket parts organization, sourcing parts from
hundreds of different suppliers and providing support for all types
of transit buses.
The New Flyer group of companies employs over 3,000 team members
with manufacturing, fabrication, parts distribution and service
centers in both Canada and the
United States. Further information is available on New
Flyer's web site at www.newflyer.com.
The common shares and convertible unsecured subordinated
debentures of the Company are traded on the Toronto Stock Exchange
under the symbols NFI and NFI.DB.U, respectively.
About Xcelsior®
Xcelsior is a
superior heavy-duty transit bus that delivers life-cycle savings
and improves the transit experience for passengers and drivers.
Xcelsior combines improved fuel economy, lighter weight, disc
brakes and the industry's first LED headlights with New Flyer's
legendary product reliability and industry-leading comprehensive
aftermarket parts and services. Xcelsior provides transit
operators the "Best Bus Value and Support for Life."
About MiDi®
MiDi is a low-floor bus ideal
for use in medium-duty transit, community shuttle services and for
connecting passengers to high-frequency transit routes. Its
purpose-built, weight-optimized steel chassis and aluminum body
structure provide a durable and fuel-efficient bus. Designed
by Alexander Dennis, MiDi is
manufactured in North America by
the Company using primarily North American components and has been
tested to the industry's demanding transit bus standards.
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,
results of operations, performance and business prospects and
opportunities. The words "believes", "anticipates", "plans",
"expects", "intends", "projects", "forecasts", "estimates" and
similar expressions are intended to identify forward looking
statements. These forward looking statements reflect management's
current expectations regarding future events and financial 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. A number of factors could
cause actual results to differ materially from the results
discussed in the forward-looking statements. Such differences may
be caused by factors which include, but are not limited to, the
ability to complete the product transition successfully, on budget
and on schedule, the ability to successfully integrate acquired
businesses and assets into the Company's existing business and to
generate accretive effects to income and cash flow as a result of
integrating these acquired businesses and assets, new products must
be tested and proven in operating conditions and there may be no
demand for such new products from customers, the Company's ability
to execute its planned production targets as required for current
business and operational needs and the ability of the Company to
successfully execute strategic plans and increase or maintain
profitability. The Company cautions that this list of factors is
not exhaustive. These factors and other risks and uncertainties are
discussed in its press releases and materials filed with the
Canadian securities regulatory authorities and available on SEDAR
at www.sedar.com.
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. These forward looking statements are
made as of the date of this press release and the Company assumes
no obligation to update or revise them to reflect new events or
circumstances, except as required by applicable securities
laws.
SOURCE New Flyer Industries Inc.