(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 announced it has amended the Company’s existing $1.25 billion
senior revolving credit facility and its £50 million revolving UK
credit facility (collectively, the “Credit Facilities”).
The amendments provide covenant relief and
additional flexibility to reflect NFI’s trailing twelve-month
financial results and its expected financial performance for the
remainder of 2022 and 2023.
“We are pleased to announce amendments to our
credit facilities that will allow us to move forward and capitalize
upon increasing customer demand and backlog growth that are
expected to drive results in 2023 and beyond,” said Pipasu Soni,
Chief Financial Officer, NFI. “These amendments come after detailed
discussions with all of our banking partners, who provided their
unanimous consent. Their support comes following detailed reviews
of our long-term financial projections and the benefits we expect
to realize as we move beyond current supply chain headwinds. We
want to thank our partners for their strong commitment to NFI and
look forward to a future of strong cash flow generation and
liquidity as we execute upon our strategic plans and lead the
ZEvolution to zero-emission mobility.”
Under the terms of the amended Credit
Facilities, the Company's banking partners have relaxed the Total
Leverage Ratio (“TLR”) and Interest Coverage Ratio (“ICR”) for the
remainder of 2022 and Fiscal 2023. In addition, NFI will have to
meet three additional covenants: 1) minimum cumulative Adjusted
EBITDA, 2) minimum liquidity, and 3) net debt to capitalization,
within different time frames. Full details on the covenants and
their respective timing are outlined in the table and notes
below:
NFI Credit Agreement Amended
Covenants
Quarter |
TLR1 |
ICR2 |
Total Net Debt to
Capitalization3 |
Minimum Cumulative Adjusted
EBITDA4 |
Minimum Liquidity5 |
2022 Q2 |
Waived |
Waived |
<0.70:1.00 |
n/a |
$300 million |
2022 Q3 |
Waived |
Waived |
<0.60:1.00 |
n/a |
$250 million |
2022 Q4 |
<5.00x |
>1.50x |
n/a |
>$45 million |
$250 million |
2023 Q1 |
<5.00x |
>1.50x |
n/a |
>$80 million |
$250 million |
2023 Q2 |
<5.00x |
>1.50x |
n/a |
>$125 million |
$250 million |
2023 Q3 |
<4.50x |
>2.00x |
n/a |
n/a |
$250 million |
2023 Q4 |
<4.00x |
>2.50x |
n/a |
n/a |
$250 million |
2024 Q1 and Thereafter |
<3.75x |
>3.00x |
n/a |
n/a |
$50 million |
Note: 2022 Q2 covenants were in place prior to
the announced amendments
- TLR is calculated as borrowings on
the Credit Facilities, not including the Company’s 5.0% convertible
debentures, less unrestricted cash and cash equivalents, divided by
Adjusted EBITDA, typically calculated on a trailing twelve-month
basis. When the TLR is reintroduced in 2022 Q4, Adjusted EBITDA
will be annualized until a full rolling four quarters of results
are available (i.e., period ending 2023 Q3); a detailed schedule
for the Adjusted EBITDA calculation is below:
- 2022 Q4 compliance Adjusted EBITDA: 2022 Q4 * 4
- 2023 Q1 compliance Adjusted EBITDA: (2022 Q4 + 2023 Q1) *
2
- 2023 Q2 compliance Adjusted EBITDA: (2022 Q4 + 2023 Q1 + 2023
Q2) * 4/3
- ICR is calculated as borrowings on
the Credit Facilities, plus the Company’s 5.0% convertible
debentures, less unrestricted cash and cash equivalents divided by
the same trailing twelve month Adjusted EBITDA as the TLR.
- Total Net Debt to Capitalization is
calculated as borrowings on the Credit Facilities, plus the
Company’s 5.0% convertible debentures, less unrestricted cash and
cash equivalents, divided by Shareholder’s Equity as shown on the
Company’s balance sheet.
- Cumulative Adjusted EBITDA starting
with 2022 Q4 results.
- Liquidity is calculated as
unrestricted cash and cash equivalents plus the aggregate amount of
credit available under the Credit Facilities.
Adjusted EBITDA and Liquidity are Non-IFRS
Measures. See notes on “Non-IFRS Measures” later in this press
release for details.
NFI’s current total liquidity is approximately
$540 million ($290 million higher than the minimum liquidity
covenant) and the Company continues to believe that, with the
amended Credit Facilities, 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
amendments to the Credit Facilities, the Company does not currently
have any plans to raise additional external capital.
The terms of the amended Credit Facilities will
not restrict the payment of dividends, provided the Company is in
compliance with the financial covenants, a cumulative Free Cash
Flow test that begins in 2023 Q2, and the dividend payments remain
at the current level for the remainder of the agreements (matures
in August 2024). The terms of the amended Credit Facilities do not
permit any acquisitions until 2024 and permit a maximum of $50
million in annual capital expenditures. Copies of the amendments to
the Revolver and the UK Facility, which will include additional
details regarding the covenants and other terms and conditions,
will be posted on SEDAR in due course.
The Bank of Nova Scotia is the Administrative
Agent for the Revolver, and The Bank of Nova Scotia, BMO Capital
Markets, and National Bank Financial Inc. are the Joint
Bookrunners. The Revolver syndicate also includes The Canadian
Imperial Bank of Commerce; Bank of America, Canada Branch; Wells
Fargo Bank, N.A., Canadian Branch; The Toronto Dominion Bank; HSBC
Bank Canada; MUFG Bank Ltd., Canada Branch; Export Development
Canada and ICICI Bank Canada.
For the UK Facility, HSBC UK acts as
Administrative Agent and HSBC UK and the Bank of America, Canada
Branch are the two co-lenders and Mandated Lead Arrangers.
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 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. There can be no assurance 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
NFI (TSX:NFI)
Historical Stock Chart
From Jun 2024 to Jul 2024
NFI (TSX:NFI)
Historical Stock Chart
From Jul 2023 to Jul 2024