Summary (U.S. Dollars except as noted):
- 2015 Q4 Adjusted EBITDA was $44.6
million, compared to $35.0
million in 2014 Q4.
- Fiscal 2015 Adjusted EBITDA and net earnings were
$151.4 million and $53.9 million, compared to $107.4 million and $26.7
million, respectively in Fiscal 2014.
- Fiscal 2015 earnings per share of $0.97 increased compared to $0.48 in Fiscal 2014.
- Free Cash Flow earned in Fiscal 2015 increased by 65.3% to
$108.3 million compared to Fiscal
2014, resulting in a Fiscal 2015 Free Cash Flow payout ratio of
31.2%.
- The first quarterly dividend was declared on March 15, 2016 and is payable on April 15, 2016. The annual dividend rate has
increased 12.9% from C$0.62 to
C$0.70 per common share.
- Fiscal 2015 operating results include acquisition of Motor
Coach Industries ("MCI") for the nine day period from December 18, 2015 to December 27, 2015.
- Total backlog of 9,664 EUs (valued at $4.95 billion) increased 38.0% during 2015 Q4
which included acquisition of MCI's backlog values at approximately
$1.1 billion.
WINNIPEG, March 23, 2016 /CNW/ - New Flyer Industries
Inc. (TSX:NFI) (TSX:NFI.DB.U), (the "Company"), the largest
transit bus and motor coach manufacturer and parts distributor in
North America, today announced its
results for the 13-week period ended December 27, 2015 ("2015 Q4") and the 52-week
period ended December 27, 2015
("Fiscal 2015"). Full audited 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
|
|
|
|
|
|
|
Bus and Coach
Deliveries
(U.S. dollars in
thousands)
|
2015
Q4
|
2014
Q4
|
change
|
2015
Fiscal
|
2014
Fiscal
|
change
|
Number of
equivalent units ("EUs") delivered
|
692
|
680
|
1.8%
|
2,483
|
2,437
|
1.9%
|
Average EU selling
price
|
$
|
501.7
|
$
|
495.0
|
1.4%
|
$
|
490.0
|
$
|
464.5
|
5.5%
|
- 2015 Q4 and Fiscal 2015 operating results include deliveries of
32 EUs by MCI during the period December 18,
2015 to December 27,
2015.
|
|
|
|
|
|
|
Consolidated
Revenue
(U.S. dollars in
millions)
|
2015
Q4
|
2014
Q4
|
change
|
2015
Fiscal
|
2014
Fiscal
|
change
|
Bus and coach
manufacturing
|
$
|
347.2
|
$
|
336.6
|
3.1%
|
$
|
1,216.7
|
$
|
1,132.1
|
7.5%
|
Aftermarket
|
|
71.7
|
|
83.4
|
(14.0)%
|
|
322.2
|
|
319.0
|
1.0%
|
Total
Revenue
|
$
|
418.9
|
$
|
420.0
|
(0.3)%
|
$
|
1,538.9
|
$
|
1,451.1
|
6.1%
|
- The increase in 2015 Q4 bus and coach revenue primarily
resulted from a 1.8% increase in total bus and coach deliveries and
a 1.4% increase in average selling price. The increase in average
selling price is the result of a more favourable product sales mix
of bus and coach types and pricing during 2015 Q4. The average
selling price can be volatile when comparing two fiscal quarters as
a result of sales mix.
- Similarly, bus and coach revenue for Fiscal 2015 increased
7.5%. Bus and coach deliveries increased 1.9% compared to 52-week
period ended December 28, 2014
("Fiscal 2014") and the average selling price per EU in Fiscal 2015
increased 5.5% compared to Fiscal 2014. The increase in average
selling price is the result of changes in the product sales mix and
pricing.
- The decrease in revenue from aftermarket operations during 2015
Q4 as compared to the 13 week period ended December 28, 2014 ("2014 Q4") is primarily a
result of the completion of the Chicago Transit Authority ("CTA")
mid-life overhaul program revenue stream. Excluding the CTA
mid-life overhaul program, the revenue from aftermarket operations
for 2015 Q4 of $71.7 million
increased compared to $66.8 million
in 2014 Q4.
- The increase in revenue from aftermarket operations during
Fiscal 2015 compared to Fiscal 2014 is primarily a result of
improved aftermarket parts market fundamentals. Excluding the CTA
mid-life overhaul program, the revenue from aftermarket operations
of $288.2 million in Fiscal 2015
increased compared to $271.8 million
in Fiscal 2014.
|
|
|
|
|
|
|
Consolidated
Adjusted EBITDA
|
2015
|
2014
|
|
2015
|
2014
|
|
(U.S. dollars in
millions)
|
Q4
|
Q4
|
change
|
Fiscal
|
Fiscal
|
change
|
Bus and coach
manufacturing
|
$
|
31.2
|
$
|
23.2
|
34.6%
|
$
|
90.0
|
$
|
57.4
|
56.8%
|
Aftermarket
|
13.4
|
11.9
|
12.6%
|
61.5
|
50.0
|
23.0%
|
Total Adjusted
EBITDA
|
$
|
44.6
|
$
|
35.0
|
27.2%
|
$
|
151.4
|
$
|
107.4
|
41.1%
|
|
|
|
|
|
|
|
Adjusted EBITDA %
of revenue
|
|
|
|
|
|
|
Bus and coach
manufacturing
|
9.0%
|
6.9%
|
2.1%
|
7.4%
|
5.1%
|
2.3%
|
Aftermarket
|
18.6%
|
14.2%
|
4.4%
|
19.1%
|
15.7%
|
3.4%
|
Total
|
10.6%
|
8.3%
|
2.3%
|
9.8%
|
7.4%
|
2.4%
|
- The increase in 2015 Q4 and Fiscal 2015 bus and coach
manufacturing operations Adjusted EBITDA compared to 2014 Q4 and
Fiscal 2014 is primarily due to favourable sales mix, pricing,
labour efficiencies and the cost savings achieved from transition
to Xcelsior® in Anniston,
Alabama. Management has continued its efforts to enhance
margins during Fiscal 2015 through cost reductions, improved labour
efficiency and price change orders. Profit margins can vary
significantly between orders due to factors such as pricing, order
size, propulsion system and product type and components specified
by the customer. Adjusted EBITDA from bus and coach 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 and coach manufacturing operations
margins. Management had anticipated and previously provided
guidance that on average, margins on orders planned for production
throughout Fiscal 2015 were expected to be higher than the average
margins achieved during Fiscal 2014.
- 2015 Q4 and Fiscal 2015 aftermarket operations Adjusted EBITDA
increased compared to 2014 Q4 and Fiscal 2014 as profit margins
have improved 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.
|
|
|
|
|
|
|
Net
earnings
|
2015
|
2014
|
$
|
2015
|
2014
|
$
|
(U.S. dollars in
millions)
|
Q4
|
Q4
|
change
|
Fiscal
|
Fiscal
|
change
|
Earnings from
operations
|
$
|
24.0
|
$
|
15.6
|
$
|
8.4
|
$
|
92.9
|
$
|
50.6
|
$
|
42.3
|
Non-cash (losses)
gain
|
(0.9)
|
0.3
|
(1.2)
|
(3.0)
|
0.8
|
(3.8)
|
Interest
expense
|
(3.5)
|
(3.5)
|
0.0
|
(14.2)
|
(13.9)
|
(0.3)
|
Income tax
expense
|
(5.5)
|
(5.0)
|
(0.5)
|
(21.8)
|
(10.8)
|
(11.0)
|
Net
earnings
|
$
|
14.1
|
$
|
7.4
|
$
|
6.7
|
$
|
53.9
|
$
|
26.7
|
$
|
27.2
|
|
|
|
|
|
|
|
Net earnings per
share
|
$
|
0.25
|
|
$
|
0.13
|
$
|
0.12
|
$
|
0.97
|
$
|
0.48
|
$
|
0.49
|
- Net earnings during 2015 Q4 increased by 90.0% compared to 2014
Q4, primarily as a result of improved Earnings from Operations
offset by the increase in income tax expense and non-cash losses.
Similarly, Fiscal 2015 net earnings increased by 101.7% compared to
Fiscal 2014.
- Fiscal 2015 net earnings were negatively impacted by a
retroactive past pension service cost charge of $3.7 million and a $1.4
million impairment loss on equipment and intangible assets,
whereas the Fiscal 2014 earnings were negatively impacted by a
$4.8 million impairment loss on
equipment and intangible assets.
Liquidity
|
|
|
|
|
|
|
Free Cash
Flow
|
2015
|
2014
|
|
2015
|
2014
|
|
(CAD dollars in
millions)
|
Q4
|
Q4
|
change
|
Fiscal
|
Fiscal
|
change
|
Free Cash
Flow
|
$
|
47.4
|
$
|
21.1
|
124.5%
|
$
|
108.3
|
$
|
65.5
|
65.3%
|
Declared
dividends
|
8.6
|
8.1
|
6.0%
|
33.8
|
32.5
|
4.0%
|
- The Free Cash Flow payout ratio was 31.2% in Fiscal 2015
compared with 49.6% during Fiscal 2014.
- The Company's board of directors approved a 12.9% increase in
the annual dividend rate from C$0.62
to C$0.70 per common share, and
revised its policy to pay dividends on a quarterly basis. The first
quarterly dividend on the common shares in the amount of
C$0.175 per share is payable on
April 15, 2016, to holders of record
at the close of business on March 31,
2016.
|
|
|
|
Liquidity
Position
|
December
27
|
September
27
|
$
|
(U.S. dollars in
millions)
|
2015
|
2015
|
change
|
Cash
|
$
|
24.9
|
$
|
6.5
|
$
|
18.4
|
Available funds
from revolving credit facility
|
149.0
|
61.5
|
87.5
|
Total liquidity
position
|
$
|
173.9
|
$
|
68.0
|
$
|
105.9
|
- The increased liquidity relates to financing of the MCI
acquisition and the decision to refinance $142.0 million from term loan to the revolving
credit facility as a means to increase the Company's overall
operating flexibility to temporarily draw upon in the future if
required by the combined businesses.
Outlook
The Company's annual operating plan for the 53-weeks ending
January 1, 2017 ("Fiscal 2016") is
focused on completing the integration of the New Flyer and NABI
aftermarket parts businesses, defending and growing the leading
market position in the heavy-duty transit bus and motor coach
markets, and developing a combination and integration plan for the
acquired MCI business.
Management continues to pursue cost and overhead savings in
operations through its Operational Excellence initiatives at New
Flyer, and the Quality at Source program at MCI. The Company's
master production schedule combined with current backlog and orders
anticipated to be awarded by customers under new procurements is
expected to enable the Company to deliver new buses and coaches of
approximately 3,450 EUs during Fiscal 2016 (53 week period), which
compares to 3,265 EUs (New Flyer plus pro-forma MCI) in Fiscal 2015
(52 week period).
Management expects the core aftermarket revenue will grow by
approximately 5% in Fiscal 2016.
With respect to the integration of MCI, the Company has targeted
annual synergies of approximately $10
million through the rationalization of certain corporate
costs, further deployment of LEAN operational techniques, and
leveraged sourcing expertise across the company. Management is
taking the necessary time to evaluate the market and the Company
and is assessing strategic opportunities for overall business
optimization. Similar to the previous acquisition of NABI,
management will provide investors with combination and integration
plans and investments in due course.
Conference Call
A conference call for analysts and interested listeners will be
held on Thursday March 24, 2016 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=1155179&s=1&k=EEFEC0A62F08C906AB405BF49DC722D0
A replay of the call will be available from 11:00 a.m. (ET) on March
24, 2016 until 11:59 p.m. (ET)
on March 31, 2016. To access the
replay, call 855-859-2056 or 416-849-0833 and then enter pass code
number 67967462. 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, fair value adjustment to MCI's
inventory 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 the Company
The Company employs approximately 5,000 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, NFI ULC and NFAI,
the Company is North America's
heavy-duty transit bus leader and offers a high quality 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, A "motor coach" or "coach" is a 40-foot or 45-foot
over-the-highway bus typically used for intercity transportation
and longer distances than heavy-duty transit buses, and is
typically characterized by (i) two axles in the rear (which allows
higher speeds), (ii) high deck floor, (iii) baggage compartment
under the floor, (iv) high-backed seats with a coach-style interior
(often including a lavatory and underfloor baggage compartments),
and (v) no room for standing passengers.
MCI offers a J-Series which is the industry's best-selling
intercity coach for 11 consecutive years, and the D-Series, the
industry's best-selling coach line in North American motor coach
history. MCI is also the exclusive distributor of the Setra
S417 and S407 in the United States
and Canada. MCI actively supports
over 28,000 MCI 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.
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 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.