WINNIPEG, Jan. 13, 2015 /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 its order
activity and backlog update for the fourth fiscal quarter ended
December 28, 2014 ("Q4 2014").
Bus Deliveries, Order Activity, and Option Expiry
New Flyer delivered 606 equivalent units ("EUs") in Q4 2014,
compared to 635 deliveries in the fourth fiscal quarter ended
December 29, 2013 ("Q4
2013"). The total work-in -process ("WIP") for the Company at
December 28, 2014 was 358 EUs, a
reduction of 41 EU's from the previous quarter which can be
attributed primarily to the recovery of deliveries on a contract
where the customer had delayed inspection and acceptance. All
but two of the buses under this contract have now been
delivered.
New Flyer's new bus orders (firm and options) in Q4 2014 totaled
1,325 EUs. Three major contracts were executed in December 2014, and are included in backlog.
Details regarding contracts with San Francisco Municipal Railway
and Orange County Transportation Authority were disclosed in
separate press releases. A third contract for 195 EUs has
been awarded, however the formal press release containing details
of the order is currently awaiting customer approval prior to
issuance.
At the end of the period, an additional 278 EUs for new firm and
option orders were pending from customers where approval of the
award had been made 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.
During Q4 2014, New Flyer also executed contracts with two U.S.
states, which added New Flyer buses to their respective purchasing
schedules of eligible transit vehicles. These "State"
contracts do not have specific firm or option quantities, and
therefore are not added to backlog, but as options are exercised
off these agreements by eligible purchasers they will be added as
new firm orders.
Order activity in the period included:
- New firm orders for 596 EUs (valued at $290.6 million)
- New option orders for 729 EUs (valued at $404.4 million)
- Options for 163 EUs (valued at $81.9
million) converted to firm orders
|
New
Orders
in
Quarter
(Firm and Option
EUs)
|
LTM New
Orders
(Firm and Option
EUs)
|
Option EUs
Converted in Quarter
|
Option EUs
Converted LTM
|
Q4
2013
|
331
|
5,279
|
223
|
601
|
Q1
2014
|
559
|
3,834
|
506
|
883
|
Q2
2014
|
476
|
3,797
|
121
|
966
|
Q3
2014
|
109
|
1,475
|
359
|
1,209
|
Q4
2014
|
1,325
|
2,469
|
163
|
1,149
|
New Flyer's last twelve months ("LTM") Book-to-Bill ratio
(defined as new firm and option orders divided by deliveries) was
104% and has been greater than 100% for seven of the last eight
quarters.
The New Flyer backlog and orders anticipated to be awarded by
customers under new procurements are expected to enable the Company
to continue to operate at a corporate average line entry rate of
approximately 51 EUs (including MiDi®) per production
week for fiscal 2015. Management expects the corporate
average line-entry rate to remain stable at this level for 2015 as
the Company executes on the rationalization of the NABI bus product
lines to the Xcelsior® platform. Production rates
may vary from quarter to quarter due to sales mix and the
introduction of the Xcelsior into the Anniston, AL facility.
In Q4 2014, 139 option EUs expired. Approximately 40% of
the options as at January 1, 2014
that were scheduled to expire in 2014 were successfully converted
to firm orders, compared to a conversion rate of just 33% in 2013.
This year-over-year improvement in option conversion excludes the
significant deferred customer order which was removed from the
backlog in Q4 2013.
Remaining options in the current backlog will expire if not
exercised, as follows:
Year of option
expiry
|
2015
|
2016
|
2017
|
2018
|
2019
|
Total Option
EUs
|
Remaining Options
(EUs)
|
946
|
596
|
560
|
1,625
|
916
|
4,643
|
Total Backlog
At the end of Q4 2014, New Flyer's total backlog was 6,819 EUs
(valued at $3.43 billion) compared to
6,239 EUs (valued at $3.07 billion)
at the end of the third quarter of 2014 ("Q3 2014") and 7,678 EU's
(valued at $3.66 billion) at the end
of Q4 2013.
Total
Backlog
|
Firm
Orders
(EUs)
|
Options
(EUs)
|
Total
(EUs)
|
Ending backlog at Q3
2014
New orders in Q4
2014
Options exercised in Q4 2014
Deliveries in Q4
2014
Cancelled/expired
options in Q4 2014
|
2,023
596
163
(606)
-
|
4,216
729
(163)
-
(139)
|
6,239
1,325
-
(606)
(139)
|
Ending Backlog at
Q4 2014
|
2,176
|
4,643
|
6,819
|
New Flyer's backlog consists of 30', 35', 40' and 60-foot bus
lengths. Buses incorporating clean propulsion systems (such
as natural gas, diesel-electric hybrid, electric-trolley, and
battery-electric) represent approximately 73% of the total.
Total
Backlog
|
Firm
Orders
(EUs)
|
Options
(EUs)
|
Total
(EUs)
|
30, 35 and 40-foot
buses
|
1,508
|
2,741
|
4,249
|
60-foot articulated
buses
|
668
|
1,902
|
2,570
|
Total Backlog at
Q4 2014
|
2,176
|
4,643
|
6,819
|
Funding Environment
On December 16, 2014, President
Obama signed the combined Omnibus Appropriations and Continuing
Resolution that will fund the U.S. federal government through the
end of fiscal year 2015. The resolution extends transit
funding to September 30, 2015, and
results in full-year funding levels under MAP-21 of $10.743 billion, which is $167 million more than the prior year.
On June 11, 2014, a $302 billion, four-year surface transportation
reauthorization (GROW AMERICA Act) was introduced in the House of
Representatives. The bill was referred to a number of House
committees and subcommittees, and remains under review with no
imminent action anticipated.
Economic Environment and Ridership
Preliminary data from the Rockefeller Institute (Preliminary
Report on December 12, 2014) reports
state tax collections increased in the third quarter of 2014 by 4%
over the prior year. The U.S. Bureau of Labor Statistics
(Labor Force Statistics on January 9,
2015) reports U.S. unemployment reduced further in the
quarter, ending with a rate of 5.6% in December 2014 as compared to a 6.7% unemployment
rate at December 2013.
The latest data from the American Public Transportation
Association (APTA) indicates overall stable ridership during the
third quarter of 2014. The report indicated an increase of 1.8% in
all modes of U.S. transit ridership during the third quarter of
2014 compared with the previous year, with a marginal decrease in
bus ridership of 0.4%. The same report indicates Canadian
ridership increased by 2.2% in all modes of transit ridership
during the third quarter of 2014 as compared to the previous year;
however, specific data on bus ridership is not available.
Transit Bus Demand
In 2008, New Flyer created the Bid Universe metric as an
indicator for overall transit bus market demand and active bids in
Canada and the United
States. The Bid Universe is a point-in-time snapshot of the
estimated EUs for: all requests for proposals ("RFPs") received and
in process of review at New Flyer, bids or proposals submitted by
New Flyer awaiting customer action, and management's forecast of
all expected EUs to be placed out for competition over the next
five years.
The number of EUs in the total Bid Universe at the end of Q4
2014 was 23,068 EUs, a substantial increase to the 18,592 EUs at
the end of Q4 2013. The total number of Active EUs (defined as RFPs
received and in process of review at New Flyer, and bids or
proposals submitted by New Flyer awaiting customer action) at the
end of Q4 2014 was 6,729 EUs which is an increase of 446 EUs or 7%
from the previous quarter.
|
RFPs (EUs) in
process at New Flyer
|
Bids or Proposals
(EUs) submitted by New Flyer
|
Total
Active
EUs
|
Forecasted New
Procurements (EUs) over the next 5 years
|
Total EUs
in
Bid
Universe
|
Q4
2013
|
909
|
5,329
|
6,238
|
12,354
|
18,592
|
Q1
2014
|
3,626
|
2,045
|
5,671
|
15,567
|
21,328
|
Q2
2014
|
2,772
|
1,926
|
4,698
|
15,030
|
19,728
|
Q3
2014
|
2,864
|
3,419
|
6,283
|
15,490
|
21,773
|
Q4
2014
|
3,335
|
3,394
|
6,729
|
16,339
|
23,068
|
Management anticipates that the amount of bus procurement
activity by public transit agencies throughout the U.S. and
Canada should remain robust based
on expected customer fleet replacement plans and active
procurements.
New Flyer Aftermarket
Gross parts orders received by New Flyer's aftermarket business
during Q4 2014 increased 24.1% compared to Q4 2013. Parts
shipments in Q4 2014 also increased 23.6% over Q4 2013.
Quarter-over-quarter gross parts orders grew 2.8% over Q3 2014,
while parts shipments were up 2.3% over Q3 2014.
Orders for the New Flyer prime contract portion of the Chicago
Transit Authority mid-life upgrade program continue to be received
as the program enters its final year, with approximately 70% of the
buses having been completed at the end of 2014.
NOTE: All dollar amounts are stated in U.S. currency based on an
exchange rate of U.S. $1.00 = CAD
$ 1.1623 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 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 employ over 3,000 team members
with manufacturing, fabrication, parts distribution and service
centers in both Canada and
the United States. Over 32,000 New
Flyer and NABI heavy-duty transit buses are in operation today.
Further information is available on New Flyer's website at
http://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.
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.