WINNIPEG, July 13, 2017 /CNW/ - (TSX:NFI) New Flyer
Industries Inc. (the "Company"), the largest transit bus and motor
coach manufacturer and parts distributor in North America, announced its order activity
and backlog update for the 13-week period ended July 2, 2017 ("Q2 2017").
The order and delivery activity and backlog for Q2 2017 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, Inc.
(together, "MCI").
The order and delivery activity and backlog as reported excludes
pre-owned motor coaches. Year-over-year comparisons reported
in this release, compare Q2 2017 to the period ended July 3, 2016 ("Q2 2016").
Deliveries, Order Activity, and Option Expiry
The Company delivered 991 equivalent units ("EUs") in Q2 2017,
an increase of 79 EUs compared to Q2 2016 and an increase of 99 EUs
over the first fiscal quarter of 2017 ("Q1 2017"). Total bus and
coach inventory at July 2, 2017 was
534 EUs, a decrease of 13 EUs from the previous quarter.
The Company's new transit bus and coach orders (firm and
options) in Q2 2017 totaled 958 EUs. Order activity in the
period included:
- New firm orders for 888 EUs (valued at $448.7 million)
- New option orders for 70 EUs (valued at $31.4 million)
- 389 EUs of Options were converted to firm orders (valued at
$189.1 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
2016
|
1,428
|
4,865
|
597
|
1,815
|
Q3
2016
|
585
|
4,317
|
288
|
1,890
|
Q4
2016
|
1,522
|
4,594
|
597
|
2,064
|
Q1
2017
|
708
|
4,243
|
218
|
1,700
|
Q2
2017
|
958
|
3,773
|
389
|
1,492
|
The Company's last twelve months ("LTM") Book-to-Bill ratio
(defined as new firm and option orders divided by deliveries) was
103% and has been greater than 100% for 17 of the last 18 quarters,
demonstrating overall growth in the Company's total backlog.
In addition, 2,055 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 majority of public transit contracts have a term of five
years. The table below shows the number of option EUs that have
either expired or been exercised annually over the past five years,
as well as the current backlog of options that will expire each
year if not exercised.
In
EUs
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
A) Options
Expired
|
1,094
|
965
|
504
|
550
|
69
|
|
|
|
|
|
B) Options
Exercised
|
601
|
1,149
|
1,339
|
2,064
|
607
|
|
|
|
|
|
C) Current Options
by
year of expiry
|
|
|
|
|
430
|
990
|
1,180
|
1,297
|
2,239
|
177
|
D) Conversion rate
%
= B/ (A+B)
|
35%
|
54%
|
73%
|
79%
|
90%
|
|
|
|
|
|
Total Backlog and 2017 Production
At the end of Q2 2017, the Company's total backlog was 9,901 EUs
(valued at $5.04 billion) compared to
9,984 EUs (valued at $5.09 billion)
at the end Q1 2017, and 10,010 EUs (valued at $5.24 billion) at the end of Q2 2016.
The Company's backlog consists of transit buses, and motor
coaches primarily for public customers. Buses incorporating
clean propulsion systems (such as natural gas, diesel-electric
hybrid, electric-trolley, and battery-electric) represent
approximately 59% of the total backlog. Zero-emission buses
(battery-electric, fuel-cell and electric-trolley) represent
approximately 5.9% of total backlog.
Total
Backlog
|
Firm Order
(EUs)
|
Options
(EUs)
|
Total
(EUs)
|
Ending backlog at Q1
2017
New orders in Q2
2017
Options exercised in Q2 2017
Deliveries in Q2
2017
Cancelled/expired
options in Q2 2017
|
3,302
888
389
(991)
-
|
6,682
70
(389)
-
(50)
|
9,984
958
-
(991)
(50)
|
Ending Backlog at
Q2 2017
|
3,588
|
6,313
|
9,901
|
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
approximately 3,750 EUs in fiscal 2017. Production rates vary from
quarter to quarter due to product mix and award timing.
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 active bid activity and 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 based on public customer projection of
expected EUs to be placed out for competition over the next five
years.
At the end of Q2 2017 the number of active EUs was 8,105 EUs and
total Bid Universe was 22,271 EUs.
|
Bids in
Process
(EUs)
|
Bids
Submitted
(EUs)
|
Total Active
(EUs)
|
Forecast
New
Procurements
over next 5
Years
(EUs)
|
Total
Bid
Universe
(EUs)
|
Q1
2016
|
1,750
|
5,536
|
7,286
|
15,632
|
22,918
|
Q2
2016
|
1,407
|
2,791
|
4,198
|
15,134
|
19,332
|
Q3
2016
|
3,474
|
3,123
|
6,597
|
17,138
|
23,735
|
Q4
2016
|
1,984
|
4,616
|
6,600
|
14,538
|
21,138
|
Q1
2017
|
2,424
|
5,660
|
8,084
|
14,060
|
22,144
|
Q2
2017
|
1,253
|
6,852
|
8,105
|
14,166
|
22,271
|
Procurement of transit buses and motor coaches by the public
sector is typically accomplished through formal multi-year
contracts, while procurement by the private sector is typically
through transactional sales. As a result, the Company does
not publish a bid universe metric for private sector buses and
motor coaches.
Management continues to expect that transit bus and motor coach
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 expects stable
private sector demand for motor coaches through 2017 given healthy
market dynamics including the economy, travel trends, and credit
markets.
Aftermarket
Total shipments by the Company's aftermarket business for Q2
2017 decreased by 3.3% compared to the previous quarter, and
decreased by 6.0% compared to Q2 2016.
New gross orders received in Q2 2017 increased by 4.2% compared
to the previous quarter, while decreasing by 5.8% compared to Q2
2016.
Surveys and interviews with a number of large customers indicate
a combination of parts orders and sales effects ranging from:
inventory reduction objectives, budgetary constraints and fleet
modernization impacts.
NOTE: All dollar amounts are stated in U.S. currency based on an
exchange rate of U.S. $1.00 = CAD
$ 1.2977 to calculate the value of
the Canadian contracts in this release.
About the Company
The Company employs over 5,400 team members and is North America's largest transit bus and motor
coach manufacturer and parts distributor 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
industry's best selling product line (Xcelsior®)),
incorporating the broadest range of drive systems available,
including: clean diesel, natural gas, diesel-electric hybrid,
electric-trolley and battery-electric. New Flyer actively supports
over 44,000 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 in North American history. MCI is also the
exclusive distributor of Daimler's SETRA models 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 of
the Company are traded on the Toronto Stock Exchange under the
symbol NFI.
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 suspend or 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.