WINNIPEG, Jan. 13, 2016 /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 27, 2015 ("Q4 2015").
The order and delivery activity and backlog for Q4 2015 reported
herein does not include any activity from Motor Coach Industries
International, Inc. ("MCI"), a manufacturer of motor coaches in
Canada and the United States, which was acquired by New
Flyer on December 18, 2015. The
Company is currently reviewing all active contracts held by
MCI. The Company will synchronize and ensure consistent
classification and reporting practices for the combined
backlog.
Bus Deliveries, Order Activity, and Option Expiry
New Flyer delivered 660 equivalent units ("EUs") in Q4 2015, a
decrease of twenty EUs compared to 680 EUs in the fourth fiscal
quarter ended December 28, 2014 ("Q4
2014").
New Flyer's new bus orders (firm and options) in Q4 2015 totaled
1,239 EUs. Order activity in the period included:
- New firm orders for 474 EUs (valued at $280.8 million)
- New option orders for 765 EUs (valued at $432.4 million)
- Options for 423 EUs converted to firm orders (valued at
$208.3 million)
|
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
2014
|
1,325
|
2,469
|
163
|
1,149
|
Q1
2015
|
1,020
|
2,930
|
157
|
800
|
Q2
2015
|
531
|
2,985
|
546
|
1,225
|
Q3
2015
|
1,133
|
4,009
|
213
|
1,079
|
Q4
2015
|
1,239
|
3,923
|
423
|
1,339
|
In addition, 564 EUs of new firm and option orders were pending
from customers at the end of the period, where approval of the
award to New Flyer 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.
New Flyer's last twelve months ("LTM") Book-to-Bill ratio
(defined as new firm and option orders divided by deliveries) was
160% and has been greater than 100% for eleven of the last twelve
quarters, demonstrating overall growth in New Flyer's total
backlog.
The New Flyer master production schedule combined with current
backlog and orders anticipated to be awarded by customers under new
procurements is now expected to enable the Company to continue to
operate at a corporate average line entry rate of approximately 50
EUs per available production week through fiscal 2016.
Production rates will vary from quarter to quarter due to sales
mix. Work-in-process ("WIP") at December 27, 2015 was 350 EUs, a decrease of 67
EUs from the previous quarter, reflecting the completion of New
Flyer's transition to the Xcelsior platform into the Anniston, AL facility.
In Q4 2015, 309 option EUs expired, compared to 76 option EUs
that expired in the third fiscal quarter of 2015 ("Q3 2015").
Remaining options in the current backlog will expire if not
exercised, as follows:
Year
of
option
expiry
|
2016
|
2017
|
2018
|
2019
|
2020
|
Total Option
EUs
|
Remaining Options
(EUs)
|
898
|
530
|
1,193
|
1,433
|
1,389
|
5,443
|
In 2015 option backlog was reduced by a total of 504 EU due to
expired options.
Total Backlog
At the end of Q4 2015, New Flyer's total backlog was 7,560 EUs
(valued at $3.85 billion) compared to
7,290 EUs (valued at $3.59 billion)
at the end Q3 2015 and 6,745 EUs (valued at $3.39 billion) at the end of Q4 2014.
|
|
|
|
Total
Backlog
|
Firm
Orders
(EUs)
|
Options
(EUs)
|
Total
(EUs)
|
Ending backlog at Q3
2015
|
1,880
|
5,410
|
7,290
|
New orders in Q4
2015
|
474
|
765
|
1,239
|
Options exercised in
Q4 2015
|
423
|
(423)
|
-
|
Deliveries in Q4
2015
|
(660)
|
-
|
(660)
|
Cancelled/expired
options in Q4 2015
|
-
|
(309)
|
(309)
|
Ending Backlog at
Q4 2015
|
2,117
|
5,443
|
7,560
|
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 71% of the total
backlog.
Economic Environment and Ridership
Public transit bus procurements in the US are eligible for 80%
of the capital to be paid for by the Federal Transit
Administration, and each city, municipality and state have unique
tax mechanisms to pay for the remaining 20% of the capital as well
as bus operating costs. As a result, New Flyer carefully
monitors federal and local funding.
On December 4, 2015, the Fixing
America's Surface Transportation Act ("FAST") was approved and
signed into law by the U.S. President Barack Obama. FAST authorizes
the funding for U.S. federal surface transportation programs
through to September 30, 2020.
Areas of FAST primarily impacting rolling stock procurement
include:
- FAST increases the current annual public transportation funding
from $10.7 billion to $12.6 billion by 2020. FAST also includes
increased funding for "clean technology" and low or zero emission
buses as demonstrated by the creation of $55
million of annual "low or no emission" competitive
grants.
- The U.S. federal government period carryover is decreased to
three years from the current five year limit. Management believes
this carryover reduction may result in the continued increase in
the number of procurements issued by agencies, but with a lower
number of total options included under each procurement.
- FAST also includes a provision that creates a pilot program to
allow up to three nonprofit agencies to host co-operative
procurement contracts that can be interstate in nature. Management
believes this should provide another opportunity for public
transportation systems of all sizes to enhance their purchasing
options as well as take advantage of cost reductions through larger
procurements.
- FAST increases the "Buy America" content requirement for
transit rolling stock from the current level of 60 percent to 65
percent in 2018 and to 70 percent in 2020, while maintaining the
rules relating to final assembly. New Flyer expects to remain in
compliance with these phased increases in U.S. domestic content
under FAST.
Preliminary data from the Nelson Rockefeller Institute indicates
U.S. state tax collections increased in the second quarter of 2015
by 6.3 percent over the previous year. State tax collections have
increased for 21 of the last 22 quarters. Although the data for the
third quarter has not been published, preliminary figures for the
third quarter of 2015 indicate weaker growth in state tax
collections of 4.3 percent.
Transit ridership in both Canada and the
United States has declined slightly. Although fourth
quarter 2015 results are not yet available, the American Public
Transportation Association's ridership report indicated that
ridership in the third quarter of 2015 decreased by 1.69% in all
modes of U.S. transit ridership compared with the previous year,
with a decrease in bus ridership of 3.34%. The same report
indicates Canadian ridership increased by 2.13% in all modes of
transit ridership during the same period as compared to the
previous year. Specific data regarding Canadian bus ridership
however, is not available.
Transit Bus Demand
New Flyer's Bid Universe metric reports active competitions in
Canada and the United States, and provides an overall
indicator of expected heavy duty transit bus market demand.
It is a point-in-time snapshot of: i) EUs in active competitions,
defined as all requests for proposals ("RFP's") received and in
process of review at New Flyer plus proposals submitted by New
Flyer awaiting customer action, and ii) management's forecast of
all expected EUs to be placed out for competition over the next
five years.
The total number of active EUs at the end of Q4 2015 was 7,205
EUs which is an increase of 1,010 EUs over the previous quarter,
largely as a result of increased bid activity through the
quarter. The number of EUs in the total Bid Universe at the
end of Q4 2015 was 20,614 EUs, which is an increase of 1,194 EUs
over Q3 2015.
|
RFPs in
process at
New Flyer
(EUs)
|
Bids or
Proposals
submitted by
New Flyer
(EUs)
|
Total
Active
(EUs)
|
Forecasted
New Procurements over the next 5
years (EUs)
|
Total
Bid
Universe
EUs
|
Q4
2014
|
3,335
|
3,394
|
6,729
|
14,727
|
21,456
|
Q1
2015
|
4,177
|
2,890
|
7,067
|
12,314
|
19,381
|
Q2
2015
|
1,690
|
5,881
|
7,571
|
13,127
|
20,698
|
Q3
2015
|
2,121
|
4,074
|
6,195
|
13,225
|
19,420
|
Q4
2015
|
763
|
6,442
|
7,205
|
13,409
|
20,614
|
Management continues to anticipate that 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 or anticipated
procurements.
New Flyer Aftermarket
Gross orders received by New Flyer's aftermarket business
decreased 2.2% compared to Q3 2015, and decreased 25.2% in Q4 2015
compared to the same quarter in 2014. The decline in year over year
gross orders is primarily attributed to the completion of the
Chicago Transit Authority ("CTA") mid-life bus upgrade
program. Total orders excluding the CTA mid-life bus upgrade
program increased by 1.3% in Q4 2015 compared to the same quarter
in 2014.
Total shipments increased 2.0% compared to Q3 2015, and declined
by 14.3% in Q4 2015 compared to the same quarter in 2014. The
decline in total shipments compared to prior year is primarily
attributed to the completion of the CTA upgrade program. Total
shipments excluding the CTA mid-life bus upgrade program increased
by 7.1% in Q4 2015 compared to the same quarter in 2014.
NOTE: All dollar amounts are stated in U.S. currency based on an
exchange rate of U.S. $1.00 = CAD
$ 1.3845 to calculate the value of
the Canadian contracts in this release.
About New Flyer
The Company employs over 4,800 team members and is the largest
transit bus and motor coach manufacturer and parts distributor in
North America with fabrication,
manufacturing, distribution and service centers in Canada and the
United States.
Through its Canadian and U.S. subsidiaries, New Flyer Industries
Canada ULC and New Flyer of America Inc., the Company is
North America's heavy-duty transit
bus leader and offers the broadest transit bus product line
(Xcelsior® and MiDi® models), incorporating
the broadest range of drive systems available, including: clean
diesel, natural gas, diesel-electric hybrid, electric-trolley and
now battery-electric. New Flyer actively supports over 42,000
heavy-duty transit buses (New Flyer, NABI and Orion) currently in
service.
Through its Canadian and U.S. subsidiaries, Motor Coach
Industries Limited and Motor Coach Industries, Inc., the Company is
North America's leader in motor
coaches, offering the MCI J4500, which is the industry's
best-selling intercity coach for 11 consecutive years, and the MCI
D-Series, the industry`s best-selling coach line in North American
motor coach history. MCI is also the exclusive distributor of Setra
S417 and S407 in the United States
and Canada. MCI actively supports
over 28,000 motor coaches currently in service and offers 24-hour
roadside assistance 365 days a year.
The Company also operates North
America's most sophisticated aftermarket parts organization
providing support for all types of transit buses and motor coaches.
All buses and coaches are supported by an industry-leading
comprehensive warranty, service and support network.
Further information is available on the Company's websites at
www.newflyer.com and www.mcicoach.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.