Summary (U.S. Dollars except as noted):
- Revenue of $553.2 million
increased by 45.5% compared to 2015 Q1 revenue of $380.3 million.
- Adjusted EBITDA of $68.2
million increased by 117.0% compared to 2015 Q1 of
$31.4 million.
- Net earnings of $22.6 million
in 2016 Q1 increased 108.1% compared to $10.9 million in 2015 Q1 and earnings per share
of $0.40 increased from $0.20 in 2015 Q1.
- Liquidity improved by $23.0 million
to $196.9 million during 2016 Q1.
- Free Cash Flow of C$61.5
million generated in 2016 Q1 increased 400.0% compared to
$12.3 million in 2015 Q1 while
dividends of C$10.4 million were
declared in 2016 Q1 compared to C$8.1
million during 2015 Q1.
- Annual dividend rate increased 35.7% to C$0.95, effective for dividends declared
subsequent to May 12, 2016. This
increase is based on the Free Cash Flow payout ratio for 2016 Q1 of
17%.
WINNIPEG, May 12, 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 14-week period ended April
3, 2016 ("2016 Q1"). Full unaudited interim condensed
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
|
|
|
|
Transit Bus and
Coach Deliveries
|
2016
|
2015
|
%
|
(U.S. dollars in
thousands)
|
Q1
|
Q1
|
change
|
New transit bus and
coaches
|
|
829
|
|
572
|
44.9
|
%
|
Pre-owned
coaches
|
|
104
|
|
—
|
100.0
|
%
|
Number of Total
equivalent units ("EUs") delivered
|
|
933
|
|
572
|
63.1
|
%
|
|
|
|
|
|
|
|
New transit bus and
coaches average selling price
|
$
|
514.0
|
$
|
508.2
|
1.1
|
%
|
Pre-owned coaches
average selling price
|
|
133.6
|
|
—
|
100.0
|
%
|
Total average EU
selling price
|
$
|
471.6
|
$
|
508.2
|
(7.2)
|
%
|
|
|
|
|
|
|
|
Consolidated
Revenue
|
2016
|
2015
|
%
|
(U.S. dollars in
millions)
|
Q1
|
Q1
|
change
|
Transit Bus and Coach
Manufacturing
|
$
|
440.0
|
$
|
290.7
|
51.4
|
%
|
Aftermarket
|
|
113.3
|
|
89.6
|
26.4
|
%
|
Total
Revenue
|
$
|
553.3
|
$
|
380.3
|
45.5
|
%
|
The increase in 2016 Q1 revenue primarily resulted from a 63.1%
increase in total transit bus and coach deliveries compared to 2015
Q1 deliveries and a 7.2% decrease in average selling price per EU
in 2016 Q1 compared to 2015 Q1. The deliveries increased primarily
as a result of the inclusion of new and pre-owned coaches of Motor
Coach Industries' ("MCI") and an extra week in 2016 Q1 as compared
to 2015 Q1. The decrease in average selling price is the result of
changes in the product sales mix which now includes pre-owned
coaches.
The increase in aftermarket operations revenue in 2016 Q1 is
primarily a result of aftermarket revenues generated by MCI and an
extra week in 2016 Q1 as compared to 2015 Q1. The pro forma
aftermarket business revenue (which includes MCI) for 2015 Q1 was
$122.3 million and $105.9 million when excluding the revenue from
the Chicago Transit Authority ("CTA") mid-life overhaul program.
Therefore, the core aftermarket revenue in 2016 Q1 increased
7.0% when compared to the pro forma aftermarket revenue for
the core business in 2015 Q1.
|
|
|
|
Consolidated
Adjusted EBITDA
|
2016
|
2015
|
%
|
(U.S. dollars in
millions)
|
Q1
|
Q1
|
change
|
Transit Bus and Coach
Manufacturing
|
$
|
45.4
|
$
|
14.7
|
207.9%
|
Aftermarket
|
22.8
|
|
16.7
|
36.8%
|
Total Adjusted
EBITDA
|
$
|
68.2
|
$
|
31.4
|
117.0%
|
|
|
|
|
|
|
Adjusted EBITDA %
of revenue
|
|
|
|
|
|
Transit Bus and Coach
Manufacturing
|
10.3%
|
|
5.1%
|
5.2%
|
Aftermarket
|
20.1%
|
|
18.6%
|
1.5%
|
Total
|
12.3%
|
|
8.3%
|
4.0%
|
Consolidated Adjusted EBITDA for 2016 Q1 increased compared to
2015 Q1 primarily as a result of the increase in transit bus and
coach manufacturing Adjusted EBITDA. Transit bus and coach
manufacturing Adjusted EBITDA increased primarily as a result of
increased deliveries and improved margins. Contributors to the
increase in margin is a favourable sales mix, improved pricing and
the positive impact from product rationalization. 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. Management cautions readers
that quarterly transit bus and coach manufacturing Adjusted EBITDA
can be volatile and should be considered over a period of several
quarters.
The 2016 Q1 aftermarket operations Adjusted EBITDA increased
compared to 2015 Q1 as a result of Adjusted EBITDA generated from
MCI's aftermarket business. As well, the Adjusted EBITDA as a
percentage of aftermarket revenue during 2016 Q1 increased 1.5%
when compared to 2015 Q1.
|
|
|
|
Net
earnings
|
2016
|
2015
|
$
|
(U.S. dollars in
millions)
|
Q1
|
Q1
|
change
|
Earnings from
operations
|
$
|
44.0
|
$
|
20.2
|
|
23.8
|
Non-cash (loss)
gain
|
|
2.5
|
|
(1.9)
|
|
4.4
|
Interest
expense
|
|
(11.5)
|
|
(4.1)
|
|
(7.4)
|
Income tax
expense
|
|
(12.4)
|
|
(3.3)
|
|
(9.1)
|
Net
earnings
|
$
|
22.6
|
$
|
10.9
|
|
11.7
|
|
|
|
|
|
|
|
Net earnings per
share (basic)
|
$
|
0.40
|
$
|
0.20
|
$
|
0.20
|
Net earnings during 2016 Q1 increased by 108.1% compared to 2015
Q1, primarily as a result of improved Earnings from Operations
offset by the increase in interest and income tax expense.
Liquidity
|
|
|
|
Free Cash
Flow
|
|
2016
|
|
2015
|
%
|
(CAD dollars in
millions)
|
|
Q1
|
|
Q1
|
change
|
Free Cash
Flow
|
$
|
61.5
|
$
|
12.3
|
400.0%
|
Declared
dividends
|
$
|
10.4
|
$
|
8.1
|
28.4%
|
The Company's 2016 Q1 Free Cash Flow increased compared to 2015
Q1 primarily as a result of the increased Adjusted EBITDA when
comparing the two periods. The amount of dividends declared
increased in 2016 Q1 primarily as a result of the previous increase
in the annual dividend rate from C$0.62 to C$0.70
per share.
Effective for dividends declared after May 12, 2016, the board of directors has approved
a 35.7% increase in the annual dividend rate from C$0.70 to C$0.95
per share. It is the Company's policy to pay dividends on a
quarterly basis. The first quarterly dividend on the shares in the
amount of C$0.2375 per share, if
declared in June 2016, is expected to
be paid in July 2016.
The April 3, 2016 liquidity
position of $196.9 million is
comprised of available cash of $39.8
million and $157.1 million
available under the revolving portion of the Company's credit
facility ("Revolver") as compared to a liquidity position of
$173.9 million at December 27, 2015. The increased liquidity
relates to improved cash flow from operations. As at
April 3, 2016, there were
$171.8 million of direct borrowings
and $14.1 million of outstanding
letters of credit related to the $343.0
million Revolver.
Outlook
The Company's annual operating plan for the 53-weeks ended
January 1, 2017 ("Fiscal 2016") is
focused on completing the integration of New Flyer and NABI's
aftermarket businesses, defending and growing leading market
position in the heavy-duty transit bus and motor coach markets and
developing an integration/combination plan for operating the
acquired MCI business.
Management continues to pursue cost and overhead savings as a
result of its decision to focus exclusively on the
Xcelsior® platform for transit buses as well as in daily
operations through its Operational Excellence ("OpEx") initiatives.
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
transit 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).
With respect to the integration of MCI, the Company continues to
target annual synergies of approximately $10
million through the rationalization of corporate costs and
deployment of New Flyer's OpEx and sourcing expertise. As of this
date, the Company has achieved approximately $3.0 million of annualized cost savings.
Management is taking the necessary time to evaluate and assess the
various scenarios before determining the strategic action required.
Once a course of action is determined, management will disclose the
expected related costs associated with the estimated synergies
savings.
Management maintains its guidance that the core aftermarket
business (excluding CTA mid-life overhaul revenue) is expected to
grow by approximately 5% in Fiscal 2016.
Conference Call
A conference call for analysts and interested listeners will be
held on Friday May 13, 2016 at
8:00 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=1184207&s=1&k=CDBDA9E4B7907EA43080753AD4A538D0
A replay of the call will be available from 11:00 a.m. (ET) on May 13,
2016 until 11:59 p.m. (ET) on
May 20, 2016. To access the replay,
call 855-859-2056 or 416-849-0833 and then enter pass code number
4508867. 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 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 and employs approximately 5,000 team
members.
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 comprehensive aftermarket parts organization
providing support for all types of transit buses and motor
coaches. All transit 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 transit buses and coaches 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.