(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 its anticipated third quarter results
and market conditions resulting from continued supply constraints
and unreliable supplier performance.
“The third quarter was another very challenging
period as we saw strong demand for our products and services,
offset by continuing supply disruption resulting in production
inefficiencies and the inability to complete and deliver
contractually committed buses. In addition, we continued to
experience short-term margin pressure from higher inflation and
surcharge driven input costs,” said Paul Soubry, President and
Chief Executive Officer, NFI Group Inc. “We have worked diligently
with our customers, suppliers, and sub-tier suppliers to mitigate
these challenges, and our actions have generated numerous
positives, including customer price adjustments, the introduction
of many alternative parts and components, and a consistent supply
of control modules (which were previously impacting vehicle
completion).
“Despite these efforts, certain critical
suppliers have continued to miss committed delivery schedules,
creating additional challenges in completing bus builds and
achieving our vehicle delivery targets, with many of these misses
escalating in late September and October. In response, we have
expanded our ongoing action plan to include temporary halts in
certain new vehicle starts and a delay in planned new vehicle
production increases in the fourth quarter. This will provide time
for our suppliers to provide materials required to complete
vehicles missing components, improve new vehicle supply lead times,
and lower cash consumption from work-in-progress inventory.
“Supply chain constraints and underperformance
is not unique to NFI, and we continue to view the current situation
as temporary, although the disruption has been elevated or extended
for certain critical suppliers. We anticipate an increase in
production in 2023, supported by supply chain improvements. In
addition, our extremely strong order book provides increased
visibility for future builds and most of our contracts now reflect
current market pricing, although there will be some lower margin
deliveries in the fourth quarter of 2022 and into 2023. I am
confident in our team’s ability to execute and deliver improved
results as we move forward,” Soubry concluded.
NFI will provide its full financial results and
additional details regarding the matters referred to in this press
release, in its 2022 Q3 Management’s Discussion & Analysis and
Financial Statements, which will now be released on November 15,
2022. The reporting date has been moved from November 2 to November
15, 2022, to provide management with additional time to finalize
results as it navigates through the recent elevations in supply
challenges.
Ongoing Supply Chain
Disruption
Certain critical parts within NFI’s supply chain
remain disrupted creating continued labour inefficiencies and an
increased inventory of nearly completed vehicles, which reached
over 400 units at the end of the third quarter. These disruptions
also inhibit the Company’s ability to increase production rates for
firm orders in the near term. While the company has been receiving
most of the parts required to complete vehicles, certain critical
suppliers have continued to miss agreed upon delivery timelines due
to their inability to secure parts (primarily electronic controls
or other electrical components). NFI believes that these ongoing
disruptions will continue in the near-term, but the Company has
initiated an action plan to position it for a strong production
recovery as supply challenges ease.
The previously disrupted control module supply
(originally announced in the second quarter of 2022) that impacted
the completion of a significant number of North American transit
buses has recovered according to plan. The Company is now receiving
a consistent supply of modules, by working with the primary
supplier and by also sourcing microprocessors directly on the open
market. NFI has now delivered most of the vehicles that were
missing these components.
Action Plan
NFI’s action plan in response to the ongoing
supply related disruption includes the following critical
items:
- Immediately halting new vehicle
starts across New Flyer for two production weeks to allow time for
suppliers to deliver components required to complete awaiting
vehicles.
- Following the temporary halt, New
Flyer will resume new vehicle starts at rates consistent with those
from before the halt and will only increase production once
confidence in supply chains has improved.
- The Company will continue ongoing
reviews of new bus production rates relative to supply chain health
and action any required corrective measures or cost
reductions.
- Continuing to work directly with
suppliers and sub-suppliers to search for alternate or substitute
parts where possible, increase production line parts inventories
and develop longer lead times to better support new vehicle
production.
- Continuing the NFI Forward and NFI
Forward 2.0 cost reduction initiatives, which includes overhead
reductions, facility rationalizations and strategic sourcing
savings programs. Since the pandemic began in 2020, NFI has:
- Closed two production facilities,
one fabrication facility and nine parts distribution locations. The
MCI motor coach completion facility in Pembina, ND is currently
being wound down and will be closed in the first quarter of
2023.
- Generated $67 million in annualized
savings by lowering overhead and administrative expenses.
- Discussing additional financing
solutions with banking and federal and provincial government
partners to allow for covenant flexibility through this period of
supply chain unreliability.
These measures are designed to improve vehicle
manufacturing efficiency, generate cash flow from the final
delivery of vehicles currently missing components, and avoid
further build-up of incomplete vehicles. This is expected to
strengthen NFI’s balance sheet to take advantage of the Company’s
backlog and increased market demand.
Market Demand
NFI’s backlog remained near record levels with
more than 4,150 equivalent units in firm orders and over 4,350
equivalent option units at the end of the third quarter. The
Company also had more than 1,350 units in bid awards pending, where
a customer has selected NFI as the preferred provider, but formal
contract documentation had not yet been received. These will drive
future backlog growth.
Overall market demand remains extremely strong
in North America. The public transit active bid universe reached
record levels of 10,107 equivalent units at the end of the quarter,
an increase of 46.5% from the same time last year. This period also
saw NFI submit its highest number of bids ever. In addition, there
were 20,377 equivalent units in the five-year outlook4, providing
long-term visibility for future orders. NFI expects this strong bid
environment to continue into 2023 as customers utilize record
investments by governments in public transit.
Focus on Liquidity and Covenant
Compliance
NFI’s quarter-end liquidity position was over
$470 million, subject to a minimum liquidity covenant of $250
million. The Company anticipates its liquidity position will
improve to over $500 million by the end of 2022 based on expected
decreases in work-in-process inventory balances.
NFI believes that through its action plan and in
working with its banking, and federal and provincial government
partners it can obtain temporary relief from the credit facility
covenants that would otherwise become applicable on January 1,
2023. The Company continues to believe that, when combined with
this relief, its cash position and capacity under its existing
credit facilities, 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 dividends, capital expenditures, and other
operational needs. See “Forward-Looking Statements”.
2022 Financial Guidance
Management is still finalizing NFI’s financial
results for 2022 Q3, but, based on preliminary information, NFI
expects to deliver revenue of $500 million to $520 million and
Adjusted EBITDA of ($15) million to ($17) million in the third
quarter5.
Reflecting challenging year-to-date results,
including expected third quarter performance, and ongoing supply
disruption, NFI is lowering its Adjusted EBITDA guidance for Fiscal
2022 to ($40) million to ($60) million. Despite the headwinds, the
Company anticipates improvement in fourth quarter vehicle
deliveries, revenue and Adjusted EBITDA when compared to the first
three quarters of 2022.
Fiscal 2022 Financial Guidance |
Revenue |
$2.0 billion to $2.2 billion (lowered from $2.3 billion to $2.6
billion) |
ZEB (electric) as a percentage of manufacturing sales |
20% to 25% (unchanged) |
Adjusted EBITDA |
($40) million to ($60) million (lowered from $15 million to $45
million) |
Cash Capital Expenditures – including NFI Forward |
$35 million to $45 million (unchanged) |
The above table outlines guidance ranges for
selected Fiscal 2022 consolidated financial metrics. These ranges
take into consideration management's current outlook combined with
year-to-date results and are based on the assumptions set out
below. The purpose of the financial guidance is to assist
investors, shareholders, and others in understanding management's
expectations for the Company's financial performance in Fiscal
2022. The information may not be appropriate for other purposes.
Information about guidance, including the various assumptions
underlying it, is forward-looking and should be read in conjunction
with the section “Forward-Looking Statements” and the related
disclosure and information about various assumptions, factors, and
risks that may cause actual future financial and operating results
to differ from management’s current expectations.
The guidance provided above is driven by
numerous expectations and assumptions including, but not limited
to, the following:
- Revenue: Revenue
projections based on year-to-date results and anticipated vehicle
and aftermarket sales for the fourth quarter, including higher
volume of zero-emission bus (“ZEB”) sales and product mix. Guidance
range lowered to reflect year-to-date results plus changes to
planned vehicle production rates and delivery schedules.
- ZEB Sales:
Expected growth in the percentage of ZEB sales is based on
year-to-date sales combined with the Company’s existing vehicle
inventory and planned fourth quarter production.
- Adjusted EBITDA:
Based on year-to-date performance, expected third quarter 2022
results and anticipated fourth quarter production and delivery
schedules that reflect the ongoing supply challenges and heightened
inflation. Included in this range is NFI’s expectation that it will
generate annualized savings of $67 million under the NFI Forward
initiatives.
NFI's revised guidance for 2022 is subject to
the risk of extended duration of the current supply disruptions and
the risk of additional supply disruptions affecting other
components. In addition, the revised guidance does not reflect
potential escalated impact on supply chains or other factors
arising directly or indirectly as a result of the Russian invasion
of Ukraine, or disruption from lockdowns in China and other
jurisdictions. Although NFI does not have direct suppliers based in
Russia or Ukraine, additional supply delays and possible shortages
of critical components may arise as the conflict progresses and if
certain suppliers’ operations and/or subcomponent supply from
affected countries are disrupted further. In addition, there may
also be further general industry-wide price increases for
components and raw materials used in vehicle production as well as
further increases in the cost of labour and potential reductions in
the supply of labour. See “Forward Looking Statements”.
Despite these near-term headwinds, NFI reaffirms
its Fiscal 2025 longer-term targets, originally announced in
January 2021, to deliver $3.9 billion to $4.1 billion in revenue,
Adjusted EBITDA of $400 million to $450 million, with approximately
40% of vehicle sales coming from zero-emission vehicles. These
targets are driven by several factors and expectations, including
the recovery of supply chains and other COVID-19-related impacts, a
higher percentage of ZEB sales (which provide a higher revenue and
dollar margin benefit), the mitigation of inflationary pressures,
end markets recovery to pre-pandemic levels, realization of NFI
Forward initiatives driving volume leverage, growth of cutaway and
medium-duty products, aftermarket expansion, and continuous
improvement initiatives.Conference Call
A conference call for analysts and interested
listeners will be held on October 24, 2022, at 8:30 a.m. Eastern
Time (ET). For attendees who wish to join by webcast, registration
is not required; the event can be accessed at
https://edge.media-server.com/mmc/p/cbm6xdpt. NFI encourages
attendees to join via webcast as a results presentation will be
presented and users can also submit questions to management through
the platform.
Attendees who wish to join by phone must visit
the following link and pre-register:
https://register.vevent.com/register/BIf2db5f3b68b94a8086b33ef3802247bb. An
email will be sent to the users registered email address, which
will provide the call-in details. Due to the possibility of emails
being held up in spam filters, we highly recommend that attendees
wishing to join via phone register ahead of time to ensure receipt
of their access details.
A replay of the call will be accessible from
11:30 a.m. ET on October 24, 2022, until 11:59 p.m. ET on October
23, 2023, at https://edge.media-server.com/mmc/p/cbm6xdpt. The
replay will also be available on NFI's website at:
www.nfigroup.com.
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.
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 (“Shares”) trade on the Toronto Stock Exchange (“TSX”) under
the symbol NFI and its convertible unsecured debentures
(“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.
For investor inquiries, please contact:Stephen
KingP: 204.224.6382Stephen.King@nfigroup.com
Appendices
Appendix A - Non-IFRS
Measures
References to “Adjusted EBITDA” are to earnings
before interest, income taxes, depreciation and amortization after
adjusting for the effects of certain non-recurring and/or
non-operations related items that do not reflect the current
ongoing cash operations of the Company. These adjustments include
gains or losses on disposal of property, plant and equipment, fair
value adjustment for total return swap, unrealized foreign exchange
losses or gains on non-current monetary items and forward foreign
exchange contracts, costs associated with assessing strategic and
corporate initiatives, past service costs and other pension costs
or recovery, non-operating costs or recoveries related to business
acquisition, fair value adjustment to acquired subsidiary company's
inventory and deferred revenue, proportion of the total return swap
realized, equity settled stock-based compensation, recovery of
currency transactions, prior year sales tax provision, COVID-19
costs and impairment loss on goodwill and non-operating
restructuring costs. "Liquidity" is not a recognized measure under
IFRS and does not have a standardized meaning prescribed by IFRS.
The Company defines liquidity as cash on-hand plus available
capacity under its credit facilities. "Backlog" value is not a
recognized measure under IFRS and does not have a standardized
meaning prescribed by IFRS.
Management believes Adjusted EBITDA is a useful
measure in evaluating the performance of the Company. However,
Adjusted EBITDA is not a recognized earnings or cash flow measure
under 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,
Liquidity and Backlog may differ materially from the methods used
by other issuers and, accordingly, Adjusted EBITDA, Liquidity and
Backlog may not be comparable to similarly titled measures used by
other issuers. Dividends are not assured, and the actual amount of
dividends received by shareholders will depend on, among other
things, the Company's financial performance, debt covenants and
obligations, working capital requirements and future capital
requirements, all of which are susceptible to a number of risks, as
described in NFI’s public filings available on SEDAR at
www.sedar.com.
Appendix B - 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 future growth, financial
performance, and liquidity 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, supply chain disruptions and plans to address them, and
the Company's expectation of receiving further covenant relief
under its senior credit facilities. 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 and operational challenges,
production improvement, the recovery of the Company’s markets and
the expected benefits to be obtained through its “NFI Forward”
initiative) 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
and the Company’s strategic initiatives, plans, business prospects
and opportunities, including the Company’s plans and expectations
relating to the duration, impact of and recovery from the COVID-19
pandemic, supply chain disruptions and inflationary pressures, will
not occur or be achieved. In connection with obtaining the
necessary covenant relief under the Company's senior 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 under its senior credit facilities or
that dividends will continue to be paid.
A number of factors that may cause actual
results to differ materially from the results discussed in the
forward-looking statements include: the Company’s business,
operating results, financial condition and liquidity may be
materially adversely impacted by the ongoing COVID-19 pandemic and
related supply chain, employee absenteeism and inflationary
effects; the Company’s business, operating results, financial
condition and liquidity may be materially adversely impacted by the
Russian invasion of Ukraine due to factors including but not
limited to further supply chain disruptions and inflationary
pressures; funding may not continue to be available to the
Company’s customers at current levels or at all, the Company’s
business is affected by economic factors and adverse developments
in economic conditions which could have an adverse effect on the
demand for the Company’s products and the results of its
operations; currency fluctuations could adversely affect the
Company’s financial results or competitive position; interest rates
could change substantially, materially impacting the Company’s
revenue and profitability; an active, liquid trading market for the
Shares and/or the Debentures may cease to exist, which may limit
the ability of securityholders to trade Shares and/or Debentures;
the market price for the Shares and/or the Debentures may be
volatile; if securities or industry analysts do not publish
research or reports about the Company and its business, if they
adversely change their recommendations regarding the Shares or if
the Company’s results of operations do not meet their expectations,
the Share price and trading volume could decline, in addition, if
securities or industry analysts publish inaccurate or unfavorable
research about the Company or its business, the Share price and
trading volume of the Shares could decline; competition in the
industry and entrance of new competitors; current requirements
under U.S. “Buy America” regulations may change and/or become more
onerous or suppliers’ “Buy America” content may change; failure of
the Company to comply with the U.S. Disadvantaged Business
Enterprise (“DBE”) program requirements or the failure to have its
DBE goals approved by the U.S. Federal Transit Administration;
absence of fixed term customer contracts, exercise of options and
customer suspension or termination for convenience; local content
bidding preferences in the United States may create a competitive
disadvantage; requirements under Canadian content policies may
change and/or become more onerous; the Company’s business may be
materially impacted by climate change matters, including risks
related to the transition to a lower-carbon economy); operational
risk resulting from inadequate or failed internal processes, people
and/or systems or from external events, including fiduciary
breaches, regulatory compliance failures, legal disputes, business
disruption, pandemics, floods, technology failures, processing
errors, business integration, damage to physical assets, employee
safety and insurance coverage; international operations subject the
Company to additional risks and costs and may cause profitability
to decline; compliance with international trade regulations,
tariffs and duties; dependence on unique or limited sources of
supply (such as engines, components containing microprocessors or,
in other cases, for example, the supply of transmissions, batteries
for battery-electric buses, axles or structural steel tubing)
resulting in the Company’s raw materials and components not being
readily available from alternative sources of supply, being
available only in limited supply, a particular component may be
specified by a customer, the Company’s products have been
engineered or designed with a component unique to one supplier or a
supplier may have limited or no supply of such raw materials or
components or sells such raw materials or components to the Company
on less than favorable commercial terms; the Company’s vehicles and
certain other products contain electronics, microprocessors control
modules, and other computer chips, for which there has been a surge
in demand, resulting in a worldwide supply shortage of such chips
in the transportation industry, and a shortage or disruption of the
supply of such microchips could materially disrupt the Company’s
operations and its ability to deliver products to customers;
dependence on supply of engines that comply with emission
regulations; a disruption, termination or alteration of the supply
of vehicle chassis or other critical components from third-party
suppliers could materially adversely affect the sales of certain of
the Company’s products; the Company’s profitability can be
adversely affected by increases in raw material and component
costs; the Company may incur material losses and costs as a result
of product warranty costs, recalls and remediation of transit buses
and motor coaches; production delays may result in liquidated
damages under the Company’s contracts with its customers;
catastrophic events, including those related to impacts of climate
change, may lead to production curtailments or shutdowns; the
Company may not be able to successfully renegotiate collective
bargaining agreements when they expire and may be adversely
affected by labor disruptions and shortages of labor; the Company’s
operations are subject to risks and hazards that may result in
monetary losses and liabilities not covered by insurance or which
exceed its insurance coverage; the Company may be adversely
affected by rising insurance costs; the Company may not be able to
maintain performance bonds or letters of credit required by its
contracts or obtain performance bonds and letters of credit
required for new contracts; the Company is subject to litigation in
the ordinary course of business and may incur material losses and
costs as a result of product liability and other claims; the
Company may have difficulty selling pre-owned coaches and realizing
expected resale values; the Company may incur costs in connection
with regulations relating to axle weight restrictions and vehicle
lengths; the Company may be subject to claims and liabilities under
environmental, health and safety laws; dependence on management
information systems and cyber security risks; the Company’s ability
to execute its strategy and conduct operations is dependent upon
its ability to attract, train and retain qualified personnel,
including its ability to retain and attract executives, senior
management and key employees; the Company may be exposed to
liabilities under applicable anti-corruption laws and any
determination that it violated these laws could have a material
adverse effect on its business; the Company’s risk management
policies and procedures may not be fully effective in achieving
their intended purposes; internal controls over financial
reporting, no matter how well designed, have inherent limitations;
there are inherent limitations to the effectiveness of any system
of disclosure controls and procedures, including the possibility of
human error and the circumvention or overriding of the controls and
procedures; ability to successfully execute strategic plans and
maintain profitability; development of competitive or disruptive
products, services or technology; development and testing of new
products or model variants; acquisition risk; reliance on
third-party manufacturers; third-party distribution/dealer
agreements; availability to the Company of future financing; the
Company may not be able to generate the necessary amount of cash to
service its existing debt, which may require the Company to
refinance its debt; the Company’s substantial consolidated
indebtedness could negatively impact the business; the restrictive
covenants in the Company’s credit facilities could impact the
Company’s business and affect its ability to pursue its business
strategies; payment of dividends is not guaranteed; a significant
amount of the Company’s cash is distributed, which may restrict
potential growth; the Company is dependent on its subsidiaries for
all cash available for distributions; the Company may not be able
to make principal payments on the Debentures; redemption by the
Company of the Debentures for Shares will result in dilution to
holders of Shares; Debentures may be redeemed by the Company prior
to maturity; the Company may not be able to repurchase the
Debentures upon a change of control as required by the trust
indenture under which the Debentures were issued (the “Indenture”);
conversion of the Debentures following certain transactions could
lessen or eliminate the value of the conversion privilege
associated with the Debentures; future sales or the possibility of
future sales of a substantial number of Shares or Debentures may
impact the price of the Shares and/or the Debentures and could
result in dilution; payments to holders of the Debentures are
subordinated in right of payment to existing and future Senior
Indebtedness (as described under the Indenture) and will depend on
the financial health of the Company and its creditworthiness; if
the Company is required to write down goodwill or other intangible
assets, its financial condition and operating results would be
negatively affected; and income and other tax risk resulting from
the complexity of the Company’s businesses and operations and the
income and other tax interpretations, legislation and regulations
pertaining to the Company’s activities being subject to continual
change.
Factors relating to the global COVID-19 pandemic
include: the magnitude and duration of the global, national and
regional economic and social disruption being caused as a result of
the pandemic; the impact of national, regional and local
governmental laws, regulations and “shelter in place” or similar
orders relating to the pandemic which may materially adversely
impact the Company’s ability to continue operations; partial or
complete closures of one, more or all of the Company’s facilities
and work locations or the reduction of production rates (including
due to government mandates and to protect the health and safety of
the Company’s employees or as a result of employees being unable to
come to work due to COVID-19 infections with respect to them or
their family members or having to isolate or quarantine as a result
of coming into contact with infected individuals); production rates
may be further decreased as a result of the pandemic; ongoing and
future supply delays and shortages of parts and components, and
shipping and freight delays, and disruption to labor supply as a
result of the pandemic; the pandemic will likely adversely affect
operations of suppliers and customers, and reduce and delay, for an
unknown period, customers’ purchases of the Company’s products and
the supply of parts and components by suppliers; the anticipated
recovery of the Company’s markets in the future may be delayed or
increase in demand may be lower than expected as a result of the
continuing effects of the pandemic; the Company’s ability to obtain
access to additional capital if required; and the Company’s
financial performance and condition, obligations, cash flow and
liquidity and its ability to maintain compliance with the covenants
under its credit facilities, which may also negatively impact the
ability of the Company to pay dividends. There can be no assurance
that the Company will be able to maintain sufficient liquidity for
an extended period, obtain satisfactory covenant relief under its
credit facilities, or access to additional capital or access to
government financial support or as to when production operations
will return to previous production rates. There is also no
assurance that governments will provide continued or adequate
stimulus funding during or after the pandemic for public transit
agencies to purchase transit vehicles or that public or private
demand for the Company’s vehicles will return to pre-pandemic
levels in the anticipated period of time. The Company cautions that
due to the dynamic, fluid and highly unpredictable nature of the
pandemic and its impact on global and local economies, supply
chains, businesses and individuals, it is impossible to predict the
severity of the impact on the Company’s business, operating
performance, financial condition and ability to generate sufficient
cash flow and maintain adequate liquidity and any material adverse
effects could very well be rapid, unexpected and may continue for
an extended and unknown period of time.
Factors relating to the Company's “NFI Forward”
initiative include: the Company's ability to successfully execute
the initiative and to generate the planned savings in the expected
time frame or at all; management may have overestimated the amount
of savings and production efficiencies that can be generated or may
have underestimated the amount of costs to be expended; the
implementation of the initiative may take longer than planned to
achieve the expected savings; further restructuring and
cost-cutting may be required in order to achieve the objectives of
the initiative; the estimated amount of savings generated under the
initiative may not be sufficient to achieve the planned benefits;
combining business units and/or reducing the number of production
or parts facilities may not achieve the efficiencies anticipated;
and the impact of the continuing global COVID-19 pandemic, supply
chain issues and inflationary pressures. There can be no assurance
that the Company will be able to achieve the anticipated financial
and operational benefits, cost savings or other benefits of the
initiative.
Factors relating to the Company’s financial
guidance and targets disclosed in this press release include, in
addition to the factors set out above, the degree to which actual
future events accord with, or vary from, the expectations of, and
assumptions used by, NFI’s management in preparing the financial
guidance and targets and the Company’s ability to successfully
execute the “NFI Forward” initiative and to generate the planned
savings in the expected time frame or at all.
Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that could
cause actions, events or results not to be as anticipated,
estimated or intended or to occur or be achieved at all. Specific
reference is made to “Risk Factors” in the Company’s Annual
Information Form for a discussion of the factors that may affect
forward-looking statements and information. 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.
_________________1 Third quarter or 2022 Q3 refers to the
13-week period ended October 2, 20222 Fiscal 2022 refers to the
period from January 3, 2022 to January 1, 2023.3 This is a
non-IFRS measure. See Appendix A. As of October 2, 2022.4 See NFI’s
second quarter financial report for an explanation of the bid
universe and five-year outlook.
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