WINNIPEG, July 15,
2016 /CNW/ - (TSX:NFI) (TSX:NFI.DB.U) New Flyer
Industries Inc. (the "Company"), the leading manufacturer of
heavy-duty transit buses, motor coaches and parts distribution in
Canada and the United States, announced its order
activity and backlog update for the second fiscal quarter ended
July 3, 2016 ("Q2 2016").
The order and delivery activity and backlog for
Q2 2016 reported in this release includes activity for heavy-duty
transit buses manufactured by the Company's subsidiaries, New Flyer
Industries Canada ULC and New Flyer of America Inc (together, "New
Flyer"), and motor coaches manufactured by its subsidiaries, Motor
Coach Industries Limited and Motor Coach Industries International,
Inc (together, "MCI").
The order and delivery activity and backlog as
reported excludes pre-owned coaches and transit buses.
Deliveries, Order Activity, and Option
Expiry
The Company delivered 912 equivalent units
("EUs") in Q2 2016, an increase of 318 EUs compared to 594 EUs in
the second fiscal quarter ended June 28,
2015 ("Q2 2015"). Total bus and coach inventory at
July 3, 2016 was 559 EUs, a decrease
of 12 EUs from the previous quarter.
The Company's new transit bus and coach orders
(firm and options) in Q2 2016 totaled 1,428 EUs. Order
activity in the period included:
- New firm orders for 247 EUs (valued at $147.6 million)
- New option orders for 1,181 EUs (valued at $666.9 million)
- Options for 597 EUs converted to firm orders (valued at
$274.6 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
|
Q2
2015
|
531
|
2,985
|
546
|
1,225
|
Q3
2015
|
1,133
|
4,009
|
213
|
1,079
|
Q4
2015
|
1,245
|
3,929
|
423
|
1,339
|
Q1
2016
|
1,059
|
3,968
|
582
|
1,764
|
Q2
2016
|
1,428
|
4,865
|
597
|
1,815
|
In addition, 1,071 EUs of new firm and option
orders were pending from customers at the end of the period, where
approval of the award to the Company 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.
The last twelve months ("LTM") Book-to-Bill ratio
(defined as new firm and option orders divided by deliveries) was
159% and has been greater than 100% for thirteen of the last
fourteen quarters, demonstrating overall growth in the Company's
total backlog.
In Q2 2016, 214 option EUs expired, compared to
176 option EUs that expired in the first fiscal quarter of 2016
("Q1 2016"). Remaining options in the current backlog will
expire if not exercised, as follows:
Year of
option
expiry
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
Total Option
EUs
|
Remaining Options
(EUs)
|
403
|
438
|
1,276
|
1,310
|
1,412
|
2,136
|
6,975
|
Total Backlog
At the end of Q2 2016, the Company's total
backlog was 10,010 EUs (valued at $5.24
billion) compared to 9,718 EUs (valued at $5.00 billion) at the end Q1 2016 and 7,011 EUs
(valued at $3.49 billion) at the end
of Q2 2015.
Total
Backlog
|
Firm
Orders
(EUs)
|
Options
(EUs)
|
Total
(EUs)
|
Ending backlog at Q1
2016
New orders in Q2
2016
Options exercised in Q2
2016
Deliveries in Q2
2016
Cancelled/expired options
in Q2
2016
|
3,113
247
597
(912)
(10)
|
6,605
1,181
(597)
-
(214)
|
9,718
1,428
-
(912)
(224)
|
Ending Backlog at Q2
2016
|
3,035
|
6,975
|
10,010
|
The Company's backlog consists of 30', 35', 40'
and 60-foot heavy duty transit buses, and 45' motor coaches.
Buses incorporating clean propulsion systems (such as natural gas,
diesel-electric hybrid, electric-trolley, and battery-electric)
represent approximately 64% of the total backlog.
Market Demand
The Company's Bid Universe metric reports active
public sector competitions in Canada and the
United States, and provides an overall indicator of expected
heavy duty transit bus and motor coach market demand. It is a
point-in-time snapshot of: (i) EUs in active competitions, defined
as all requests for proposals received and in process of review
plus bids submitted and awaiting customer action, and (ii)
management's forecast of all expected EUs to be placed out for
competition over the next five years.
Procurement of transit buses and coaches by the
public sector is typically accomplished through formal multi-year
contracts, while procurement of transit buses and coaches by the
private sector is typically accomplished through transactional
sales of small orders of vehicles. As a result, the Company
is unable to develop longer range forecasts for private sector
buses and coaches.
The total number of active EUs at the end of Q2
2016 was 4,198 EUs which is a decrease of 3,088 EUs over the
previous quarter, largely as a result of orders awarded during the
quarter. The number of EUs in the total Bid Universe at the
end of Q2 2016 was 19,332 EUs, which is a decrease of 3,586 EUs
over Q1 2016.
|
Bids in
Process (EUs)
|
Bids Submitted
(EUs)
|
Total Active
(EUs)
|
Forecasted
New
Procurements
over the next 5
Years
(EUs)
|
Total Bid
Universe
(EUs)
|
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
|
Q1
2016
|
1,750
|
5,536
|
7,286
|
15,632
|
22,918
|
Q2
2016
|
1,407
|
2,791
|
4,198
|
15,134
|
19,332
|
* New Flyer Bid Universe Only (excludes MCI)
Management continues to anticipate that bus
procurement activity by public transit agencies throughout the U.S.
and Canada should remain robust
based on an aging fleet, improved overall economic conditions,
expected customer fleet replacement plans and active or anticipated
procurements. Management also anticipates stable private sector
demand for motor coaches through 2016 given the stability of market
dynamics including the general economy, travel trends and credit
markets. The 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
deliver approximately 3,450 EUs in fiscal 2016. Production
rates will vary from quarter to quarter due to sales mix and award
timing.
On July 11, 2016,
MCI received notice that required an immediate and orderly shutdown
of all ongoing work under a contract to build commuter coaches for
New Jersey Transit (NJT), however the Company has insufficient
information to determine if the Company needs to adjust its annual
delivery guidance.
Aftermarket
Gross orders received by the Company's
aftermarket business in Q2 2016 decreased 5% compared to Q1 2016,
primarily due to the impact of five fewer workdays in the fiscal
calendar in Q2. Gross orders increased 52% in Q2 2016
compared to the same quarter in 2015. The increase in year over
year gross orders is attributed to the acquisition of MCI.
Q2 2016 total shipments decreased 5% compared to
Q1 2016, primarily due to the impact of five fewer workdays in the
fiscal calendar in Q2. Total shipments increased by 16%
compared to the same quarter in 2015. The increase in total
shipments year over year due is primarily attributed to the
acquisition of MCI, offset by the completion of the CTA midlife
program.
NOTE: All dollar amounts are stated in U.S.
currency based on an exchange rate of U.S. $1.00 = CAD $
1.2917 to calculate the value of the Canadian contracts in
this release.
About the Company
The Company employs over 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, 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 the leader in motor coaches in Canada and the U.S., 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 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.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.