WINNIPEG, July 11, 2016 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U)
Motor Coach Industries ("MCI"), a subsidiary of New Flyer
Industries Inc. (the "Company"), the largest bus and motor coach
manufacturer and parts distributor in North America, announced that MCI received
notice from New Jersey Transit (NJT) that "requires an immediate
and orderly shutdown of all ongoing work" under a contract to build
commuter coaches.
MCI was awarded a contract by NJT in November 2015 with a firm order for three
commuter coaches and options for an additional 1,219 over six
years. After delivering three pilot coaches which successfully
passed the in-service testing and evaluation phase, MCI received a
Notice to Proceed in May 2016 for the
first year's production of 184 commuter coaches, of which 142 were
to be delivered in calendar year 2016.
NJT advised MCI that the replenishment of the New Jersey
Transportation Trust Fund Account ("TTFA") has been delayed.
Accordingly, Governor Chris Christie
issued Executive Order No. 210 declaring a State of Emergency and
directing the Commissioner of the Department of Transportation and
the Executive Director of the NJT to plan an immediate and orderly
shutdown of all ongoing work that is funded by the TTFA. In
accordance with the Shutdown Order issued by Dennis J. Martin, Executive Director of the NJT,
all contract work financed by TTFA funds must begin an orderly
shutdown.
"As of today, MCI has delivered five coaches to NJT with an
additional 76 currently in various stages production or completed
and in transit" said Paul Soubry,
President and CEO. "We value MCI's long-term
relationship with NJT and are working cooperatively and diligently
to understand the impact of this funding disruption". Soubry
further explained "MCI will shortly commence its annual three week
summer shutdown and we will synchronize an orderly shutdown of NJT
production to coincide with it and we hope this will provide
sufficient time for the funding situation to be resolved".
The additional 61 commuter coaches to be delivered in 2016 that
have not yet commenced production represent just under 2% of the
total combined New Flyer and MCI annual bus manufacturing schedule
for 2016. The company cannot predict at this time whether
this issue will cause the Company to adjust its annual production
guidance.
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.
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Through its Canadian and U.S. subsidiaries, Motor
Coach Industries Limited and Motor Coach Industries, Inc.
(together, "Motor Coach Industries"), the Company is leader in
motor coaches in Canada and the US, 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.
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Through its Canadian and U.S. subsidiaries, New Flyer
Industries Canada ULC and New Flyer of America Inc. (together, "New
Flyer"), 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.
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The Company also operates North
America's most comprehensive 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.mcicoach.com and 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.