(TSX: NFI, OTC: NFYEF, TSX: NFI.DB) NFI Group Inc.
(“NFI” or the “Company”), a leading independent bus and coach
manufacturer and a leader in electric mass mobility solutions,
today provided an update on discussions with its banking partners
regarding amendments to the Company’s credit facilities. NFI
believes the discussions are advancing well, with draft terms
prepared and reviewed by NFI and its banking partners. While NFI
had originally expected to complete the amendments during the
second quarter of 2022, the Company now expects the amendments will
be completed prior to August 3, 2022.
The detailed discussions relate to amendments to
the Company’s existing $1.25 billion senior revolving credit
facility and its £50 million revolving UK credit facility
(collectively, the “Credit Facilities”) where NFI is pursuing
covenant relief that reflects NFI’s trailing twelve-month financial
results and its expected financial performance for the remainder of
2022.
NFI is primarily seeking (among other things)
longer-term amendments to the Total Leverage Ratio (“TLR”)1 and
Interest Coverage Ratio (“ICR”)2 covenants that are expected to be
in effect into 2023. The Company today received a waiver on its TLR
and ICR until August 3, 2022, the date NFI plans to release its
second quarter 2022 financial results. Previous waivers on the ICR
and TLR were in place until June 30 and July 3, 2022, respectively.
NFI believes that it will receive additional waivers required to
support completion of the amendments should they not be complete by
August 3, 2022.
Under the waiver, NFI’s minimum liquidity3 must
be equal to or greater than $300 million (was previously $50
million). NFI’s current liquidity is approximately $600 million and
the Company continues to believe that, with the anticipated
covenant relief, the Company's cash position and capacity under the
Credit Facilities, combined with anticipated future cash flows and
access to capital markets, will be sufficient to fund operations,
meet financial obligations as they come due and provide the funds
necessary for capital expenditures, dividend payments and other
operational needs, including the temporary build-up of
work-in-process inventory from supply chain disruptions.
While NFI has demonstrated strong access to
capital markets, given its existing liquidity position and
expectations that it will receive the anticipated covenant relief,
the Company does not currently have any plans to raise additional
external capital, including to address the Credit Facility covenant
issues.
About NFI
Leveraging 450 years of combined experience, NFI
is leading the electrification of mass mobility around the world.
With zero-emission buses and coaches, infrastructure, and
technology, NFI meets today’s urban demands for scalable smart
mobility solutions. Together, NFI is enabling more livable cities
through connected, clean, and sustainable transportation. NFI also
operates the Vehicle Innovation Center (“VIC”), the first and only
innovation lab of its kind dedicated to advancing bus and coach
technology and providing workforce development. Since opening late
2017, the VIC has hosted over 300 interactive events, welcoming
5,000 industry professionals for electric vehicle (“EV”) and
infrastructure training.
With 7,500 team members in nine countries, NFI
is a leading global bus manufacturer of mass mobility solutions
under the brands New Flyer® (heavy-duty transit buses), MCI® (motor
coaches), Alexander Dennis Limited (single and double-deck buses),
Plaxton (motor coaches), ARBOC® (low-floor cutaway and medium-duty
buses), and NFI Parts™. NFI currently offers the widest range of
sustainable drive systems available, including zero-emission
electric (trolley, battery, and fuel cell), natural gas, electric
hybrid, and clean diesel. In total, NFI supports its installed base
of over 105,000 buses and coaches around the world. NFI’s common
shares trade on the Toronto Stock Exchange (“TSX”) under the symbol
NFI and its convertible unsecured debentures trade on the TSX under
the symbol NFI.DB. News and information is available at
www.nfigroup.com, www.newflyer.com, www.mcicoach.com,
www.nfi.parts, www.alexander-dennis.com, www.arbocsv.com, and
www.carfaircomposites.com.
Non-IFRS Measures
Adjusted EBITDA is a non-IFRS measure, which the
Company uses in evaluating its performance and which is used under
the terms of the Credit Facilities. Adjusted EBITDA is not a
recognized earnings or cash flow measure under International
Financial Reporting Standards (“IFRS”) and does not have a
standardized meaning prescribed by IFRS. Readers of this press
release are cautioned that Adjusted EBITDA should not be construed
as an alternative to net earnings or loss or cash flows from
operating activities determined in accordance with IFRS as an
indicator of NFI’s performance. NFI’s method of calculating
Adjusted EBITDA can be found in the Company’s Management’s
Discussion and Analysis for the first quarter of 2022. Such method
of calculation may differ materially from the methods used by other
issuers and, accordingly, may not be comparable to similarly titled
measures used by other issuers.
Liquidity is not a recognized measure under IFRS
and does not have a standardized meaning prescribed by IFRS.
Forward-Looking Statements
This press release contains “forward-looking
information” and “forward-looking statements” within the meaning of
applicable Canadian securities laws, which reflect the expectations
of management regarding the Company’s financial performance and
objectives, including the Company's expectation of receiving
covenant relief and waivers under its Credit Facilities and its
liquidity expectations. The words “believes”, “views”,
“anticipates”, “plans”, “expects”, “intends”, “projects”,
“forecasts”, “estimates”, “guidance”, “goals”, “objectives” and
“targets” and similar expressions of future events or conditional
verbs such as “may”, “will”, “should”, “could”, “would” are
intended to identify forward-looking statements. These
forward-looking statements reflect management’s current
expectations regarding future events (including the temporary
nature of the supply chain disruptions that the Company has been
experiencing, the recovery of the Company’s markets and the
expected benefits to be obtained through its “NFI Forward” and “NFI
Forward 2.0” initiatives) and the Company’s financial and operating
performance and speak only as of the date of this press release. By
their very nature, forward-looking statements require management to
make assumptions and involve significant risks and uncertainties,
should not be read as guarantees of future events, performance or
results, and give rise to the possibility that management’s
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that the assumptions may not be
correct and that the Company’s future growth, financial performance
and objectives, liquidity position and objectives and the Company’s
strategic initiatives, plans, business prospects and opportunities,
including the duration, impact of and recovery from the COVID-19
pandemic and supply chain disruptions, will not occur or be
achieved. In connection with obtaining the necessary covenant
relief under the Credit Facilities, it is possible that certain
other amendments could be made, including with respect to a
reduction in the size of the facilities, an increase in the
interest rates and other fees and additional restrictions on
dividends and acquisitions. There can be no assurance that the
Company will be successful in obtaining the necessary covenant
relief or additional waivers (to the extent necessary) under the
Credit Facilities, or that dividends will continue to be paid. It
is also possible that the Company’s liquidity position may come
under additional pressure beyond management’s current expectations,
which could require the Company to raise additional capital.
A number of factors may cause actual results to
differ materially from the results discussed in the forward-looking
statements. Readers of this press release should refer to the
Company’s most recent Annual Information From, Management’s
Discussion and Analysis for the first quarter of 2022 and the
Company’s press release dated May 19, 2022 for a discussion of the
risk factors related to the Company’s business, operating results,
financial condition and liquidity, risk factors related to the
global COVID-19 pandemic, risk factors related to the Company's
“NFI Forward” and “NFI Forward 2.0” initiatives and risk factors
related to the Company’s financial guidance and targets.
Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in forward-looking statements and information. The forward-looking
statements and information contained herein are made as of the date
of this press release (or as otherwise indicated) and, except as
required by law, the Company does not undertake to update any
forward-looking statement or information, whether written or oral,
that may be made from time to time by the Company or on its behalf.
The Company provides no assurance that forward-looking statements
and information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers and investors should not
place undue reliance on forward-looking statements and
information.
For inquiries, please contact:Stephen KingP:
204.224.6382Stephen.King@nfigroup.com
1 Calculated as total borrowings under the
Credit Facilities (excludes NFI’s 5.0% coupon Convertible
Debentures) divided by trailing twelve-month Adjusted EBITDA with
adjustments for IFRS 16 Leases accounting. See “Non-IFRS Measures”
at the end of this news release for more information regarding
Adjusted EBITDA.2 Calculated as trailing twelve month Adjusted
EBITDA divided by trailing twelve-month interest expense (which
includes interest from NFI’s 5.0% coupon Convertible Debentures)
with adjustments for IFRS 16 Leases accounting. 3 Calculated as
unrestricted cash and cash equivalents plus the aggregate amount of
credit available under the Company’s Credit Facilities. See
“Non-IFRS Measures.”
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