Summary (U.S. Dollars except as noted):
- Consolidated revenue of $364.7
million increased by 1.1% compared to 2014 Q3.
- Consolidated Adjusted EBITDA of $36.3
million, an increase of 41.2% compared to 2014 Q3.
- Net earnings of $16.6 million
increased 61.6% compared to 2014 Q3 and earnings per share of
$0.30 increased 66.7% from 2014
Q3.
- Free Cash Flow was C$22.1
million and declared dividends were C$8.6 million. The Free Cash Flow payout
ratio in 2015 YTD is 41.3% compared with 54.8% during 2014
YTD.
- Total backlog of 7,290 EUs (valued at $3.59 billion) increased 4% during 2015
Q3.
- Management anticipates the amount of bus procurement
activity by public transit agencies throughout the United States and Canada to remain robust.
WINNIPEG, Nov. 4, 2015 /CNW/ - New Flyer Industries
Inc. (TSX:NFI) (TSX:NFI.DB.U), ("New Flyer", or the "Company"),
the leading manufacturer of heavy-duty transit buses in
Canada and the United States, today announced its results
for the 13-week period ended September 27,
2015 ("2015 Q3"). Full unaudited financial statements and
Management's Discussion and Analysis (the "MD&A") are available
at the Company's web site at:
www.newflyer.com/index/financialreport. Unless otherwise indicated
all monetary amounts in this press release are expressed in U.S.
dollars.
Operating Results
|
|
|
|
|
|
|
|
|
|
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|
Bus
Deliveries
|
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|
|
(U.S. dollars in
thousands)
|
|
Q3
|
|
Q3
|
|
change
|
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YTD
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|
YTD
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|
change
|
Number of
equivalent units
("EUs") delivered
|
|
|
625
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|
|
621
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|
0.6%
|
|
|
1,791
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|
|
1,757
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1.9%
|
Average EU selling
price
|
|
$
|
468.8
|
|
$
|
448.8
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|
4.5%
|
|
$
|
485.5
|
|
$
|
452.7
|
|
7.2%
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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Consolidated
Revenue
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|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|
|
(U.S. dollars in
millions)
|
|
Q3
|
|
Q3
|
|
change
|
|
YTD
|
|
YTD
|
|
change
|
Bus
|
|
$
|
293.0
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|
$
|
278.7
|
|
5.1%
|
|
$
|
869.5
|
|
$
|
795.4
|
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9.3%
|
Aftermarket
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$
|
71.7
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|
$
|
82.0
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|
(12.6)%
|
|
$
|
250.5
|
|
$
|
235.7
|
|
6.3%
|
Total
Revenue
|
|
$
|
364.7
|
|
$
|
360.8
|
|
1.1%
|
|
$
|
1,120.0
|
|
$
|
1,031.1
|
|
8.6%
|
- The increase in 2015 Q3 bus revenue primarily resulted from a
0.6% increase in total bus deliveries and a 4.5% increase in
average selling price. The increase in average selling price is the
result of a more favourable product sales mix of bus types and
pricing during 2015 Q3. The average selling price can be volatile
when comparing two fiscal quarters as a result of sales mix.
- The decrease in revenue from aftermarket operations during 2015
Q3 is primarily a result of the completion of the Chicago Transit
Authority ("CTA") mid-life overhaul program revenue stream.
- The increase in revenue from aftermarket operations during the
39-week period ended September 27,
2015 ("2015 YTD") is primarily a result of improved
aftermarket parts market fundamentals and incremental revenue from
the CTA mid-life overhaul program.
|
|
|
|
|
|
|
|
|
|
|
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Consolidated
Adjusted EBITDA
|
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|
|
(U.S. dollars in
millions)
|
|
Q3
|
|
Q3
|
|
change
|
|
YTD
|
|
YTD
|
|
change
|
Bus
|
|
21.6
|
|
12.6
|
|
72.1%
|
|
58.8
|
|
34.2
|
|
71.8%
|
Aftermarket
|
|
14.7
|
|
13.1
|
|
11.7%
|
|
48.1
|
|
38.1
|
|
26.2%
|
Total Adjusted
EBITDA
|
|
36.3
|
|
25.7
|
|
41.2%
|
|
106.9
|
|
72.3
|
|
47.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA %
of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Bus
|
|
7.4%
|
|
4.5%
|
|
2.9%
|
|
6.8%
|
|
4.3%
|
|
2.5%
|
Aftermarket
|
|
20.5%
|
|
16.0%
|
|
4.5%
|
|
19.2%
|
|
16.2%
|
|
3.0%
|
Total
|
|
9.9%
|
|
7.1%
|
|
2.8%
|
|
9.5%
|
|
7.0%
|
|
2.5%
|
- The increase in 2015 Q3 and 2015 YTD bus manufacturing
operations Adjusted EBITDA as compared to the 13-week period ended
September 28, 2014 ("2014 Q3") and
the 39-week period ended September 28,
2014 ("2014 YTD") is primarily due to increased margins.
Higher margins are primarily a result of a favourable sales mix,
pricing, improved labour efficiencies and the cost savings achieved
from transition to Xcelsior® in Anniston, Alabama. Management had anticipated
and previously provided guidance that, on average, margins on
orders planned for production in Fiscal 2015 are expected to be
higher than the average margins achieved during Fiscal 2014.
Adjusted EBITDA from bus manufacturing operations per EU can be
volatile on a quarterly basis and therefore management believes
that a longer term view should be taken when comparing bus
manufacturing operations margins.
- Aftermarket operations' profit margins have improved during
2015 Q3 and 2015 YTD primarily as a result of improved market
fundamentals and the benefits to the product mix that have resulted
from a far broader portfolio of services and parts offerings to
customers. This has contributed to the increase in Adjusted EBITDA
for 2015 YTD as compared to 2014 YTD.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
2015
|
|
2014
|
|
$
|
|
|
2015
|
|
|
2014
|
|
$
|
(U.S. dollars in
millions)
|
|
Q3
|
|
Q3
|
|
change
|
|
|
YTD
|
|
|
YTD
|
|
change
|
Earnings from
operations
|
|
|
$25.0
|
|
|
$12.9
|
|
|
12.1
|
|
|
$68.9
|
|
|
$35.0
|
|
|
33.9
|
Non-cash (losses)
gain
|
|
|
(1.0)
|
|
|
(0.1)
|
|
|
(0.9)
|
|
|
(2.1)
|
|
|
0.5
|
|
|
(2.6)
|
Interest
expense
|
|
|
(3.5)
|
|
|
(2.7)
|
|
|
(0.8)
|
|
|
(10.7)
|
|
|
(10.4)
|
|
|
(0.3)
|
Income tax
(expense) recovered
|
|
|
(3.9)
|
|
|
0.1
|
|
|
(4.0)
|
|
|
(16.3)
|
|
|
(5.8)
|
|
|
(10.5)
|
Net
earnings
|
|
|
16.6
|
|
|
10.2
|
|
|
6.4
|
|
|
39.8
|
|
|
19.3
|
|
|
20.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share
|
|
$
|
0.30
|
|
$
|
0.18
|
|
$
|
0.12
|
|
|
0.72
|
|
|
0.35
|
|
$
|
0.37
|
The Company reported net earnings of $16.6 million in 2015 Q3 representing a 61.6%
improvement compared to 2014 Q3, primarily as a result of improved
earnings from operations offset by increased income tax
expense.
Liquidity
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|
|
(CAD dollars in
millions)
|
|
Q3
|
|
Q3
|
|
change
|
|
YTD
|
|
YTD
|
|
change
|
Free Cash
Flow
|
|
22.1
|
|
17.9
|
|
23.8%
|
|
60.9
|
|
44.4
|
|
37.2%
|
Declared
dividends
|
|
8.6
|
|
8.1
|
|
6.0%
|
|
25.2
|
|
24.3
|
|
3.4%
|
The Free Cash Flow payout ratio is 41.3% in 2015 YTD compared
with 54.8% during 2014 YTD. In May
2015, the Company increased the annual dividend from
$0.585 to $0.62 per common share.
|
|
|
|
|
|
|
|
|
|
Liquidity
Position
|
|
|
September
27
|
|
|
June
28
|
|
|
$
|
(U.S. dollars in
millions)
|
|
|
2015
|
|
|
2015
|
|
|
change
|
Cash
|
|
|
6.5
|
|
|
8.8
|
|
|
(2.3)
|
Available funds
from revolving credit facility
|
|
|
61.5
|
|
|
49.7
|
|
|
11.8
|
Total liquidity
position
|
|
|
68.0
|
|
|
58.5
|
|
|
9.5
|
As at September 27, 2015, there
were $44.0 million of direct
borrowings and $9.5 million of
outstanding letters of credit related to the $115.0 million revolving credit facility.
Outlook
Management believes pricing in certain types of bus competitions
has normalized and expects that bus margins realized during Fiscal
2015 will be, on average, higher than those realized during Fiscal
2014. Management continues to pursue savings as a result of its
decision to focus exclusively on the Xcelsior® platform
as well as in daily operations through its Operational Excellence
initiatives. Management anticipates that the increased bus margins
for Fiscal 2015 will substantially mitigate the loss of Adjusted
EBITDA derived from the Company's investment tax credits ("ITCs"),
which were substantially realized during Fiscal 2014.
During the first week of July 2015
there were no scheduled assembly line entries, which resulted in a
reduction of approximately 35 EUs being entered into
production. The New Flyer master production schedule combined
with current backlog and orders anticipated to be awarded under new
procurements is expected to enable the Company to continue to
operate at a corporate average line entry rate of approximately 50
EUs per available production week for Fiscal 2015 and 2016.
The production rates vary from quarter to quarter due to sales mix
and the phased introduction of the Xcelsior® platform in the
Anniston, Alabama manufacturing
facility in Fiscal 2015.
With respect to the aftermarket segment, management continues to
expect core aftermarket parts revenue growth of approximately 5%
during Fiscal 2015. Also, the aftermarket revenue generated from
the CTA mid-life upgrade program ended in June 2015, which represented 13.6% of the total
aftermarket revenue during 2015 YTD. In addition, management
continues to be engaged in a strategic review of New Flyer's
aftermarket business to identify efficiencies through business and
system synchronization.
Conference Call
A conference call for analysts and interested listeners will be
held on Friday November 6, 2015 at
9:00 a.m. (ET). The call-in number
for listeners is 888-231-8191, 647-427-7450 or 403-451-9838. A live
audio feed of the call will also be available at:
http://event.on24.com/r.htm?e=1083398&s=1&k=693E8B74E5E1B087D347863ABE9561E5
A replay of the call will be available from 12:00 p.m. (ET) on November 6, 2015 until 11:59 p.m. (ET) on November 13, 2015. To access the replay, call
855-859-2056 or 416-849-0833 and then enter pass code number
69218628. The replay will also be available on New Flyer's web site
at www.newflyer.com.
Non-IFRS Measures
"Earnings from Operations" refer to earnings before interest,
income taxes and unrealized foreign exchange losses or gains on
non-current monetary items. "Adjusted EBITDA" consists of earnings
before interest, income taxes, depreciation, amortization and other
non-cash charges and certain other non-recurring charges as set out
in the MD&A. "Free Cash Flow" means net cash generated by
operating activities adjusted for changes in non-cash working
capital items, interest paid, interest expense, income taxes paid,
current income tax expense, effect of foreign currency rate on
cash, past service costs, defined benefit funding, non-recurring
transitional costs relating to business acquisitions, costs
associated with assessing strategic and corporate initiatives,
product rationalization costs, defined benefit expense, cash
capital expenditures, realized ITCs and principal payments on
capital leases. Management believes Earnings from Operations,
Adjusted EBITDA and Free Cash Flow are useful measures in
evaluating the performance of the Company. However, Earnings from
Operations, Adjusted EBITDA and Free Cash Flow are not recognized
earnings measures and do not have standardized meanings prescribed
by International Financial Reporting Standards ("IFRS") and may not
be comparable to similarly titled measures used by other issuers.
Readers are cautioned that Earnings from Operations and Adjusted
EBITDA should not be construed as an alternative to net earnings or
loss determined in accordance with IFRS as an indicator of the
Company's performance, and Free Cash Flow should not be construed
as an alternative to cash flows from operating, investing and
financing activities determined in accordance with IFRS, as a
measure of liquidity and cash flows. A reconciliation of Adjusted
EBITDA and Free Cash Flow to net earnings and cash flow from
operations, respectively, is provided in the MD&A.
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, electric trolley,
diesel-electric hybrid 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 heavy-duty transit buses.
The New Flyer group of companies employ over 3,300 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.
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 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, availability of funding to the Company's customers to
purchase buses and to exercise options and to purchase parts or
services at current levels or at all, aggressive competition and
reduced pricing in the industry, material losses and costs may be
incurred as a result of product warranty issues and product
liability claims, changes in Canadian or United States tax legislation, the absence of
fixed term customer contracts and the termination of contracts by
customers for convenience, the current U.S federal "Buy-America"
legislation, certain states' U.S. content bidding preferences and
certain Canadian content purchasing policies may change and/or
become more onerous, production delays may result in liquidated
damages under the Company's contracts with its customers, the
Company's ability to execute its planned production targets as
required for current business and operational needs, currency
fluctuations could adversely affect the Company's financial results
or competitive position in the industry, the Company may not be
able to maintain performance bonds or letters of credit required by
its existing contracts or obtain performance bonds and letters of
credit required for new contracts, third party debt service
obligations may have important consequences to the Company, the
covenants contained in the Company's senior credit facility and the
indenture governing its Debentures could impact the ability of the
Company to fund dividends and take certain other actions, interest
rates could change substantially and materially impact the
Company's profitability, the dependence on limited sources of
supply, the timely supply of materials from suppliers, the
possibility of fluctuations in the market prices of the pension
plan investments and discount rates used in the actuarial
calculations will impact pension expense and funding requirements,
the Company's profitability and performance can be adversely
affected by increases in raw material and component costs, the
availability of labour could have an impact on production levels,
new products must be tested and proven in operating conditions and
there may be limited demand for such new products from customers,
the ability to successfully complete the product rationalization of
the NABI bus platform to the Xcelsior on budget and on schedule and
to achieve the projected costs savings, the ability of the Company
to successfully execute strategic plans and maintain profitability,
risks related to acquisitions, joint ventures, and other strategic
relationships with third parties and 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. 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.