NFI Group Announces First Quarter 2018 Orders and Backlog

WINNIPEG, April 15, 2018 /CNW/ - (TSX: NFI) New Flyer Industries Inc. ("NFI Group") the largest bus and motor coach manufacturer and parts distributor in North America, today announced its order activity and backlog update for the 13-week period ended April 1, 2018 ("Q1 2018").  Year-over-year comparisons reported in this release compare Q1 2018 to the 13-week period ended April 2, 2017 ("Q1 2017"). 

Deliveries, Order Activity, and Option Expiry

NFI Group delivered 993 equivalent units ("EUs") in Q1 2018, an increase of 101 EUs compared to Q1 2017 . Total inventory at April 1, 2018 increased 151 EUs from the previous quarter to 633 EUs, which reflects typically historically slower sales of motor coaches in the first quarter.

NFI Group's total new orders in Q1 2018 totaled 736 EUs, which included firm orders of 365 EUs (valued at $160.1 million) and option orders of 371 EUs (valued at $177.6 million).  In addition, 441 option EUs were converted to firm orders (valued at $240.7 million).

Total reported orders do not include 904 EUs of new firm and option orders that were pending from customers at the end of the quarter, where approval of the award to New Flyer 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 are therefore not yet included in the backlog.

NFI Group's last twelve months ("LTM") Book-to-Bill ratio (defined as new firm and option orders divided by deliveries) was 149% and has been greater than 100% for 15 consecutive quarters.

The majority of public transit contracts have a term of five years and include both firm orders and options. The following table 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. 

Total Backlog and 2018 Production

At the end of Q1 2018, NFI Group's total backlog was 11,548 EUs (valued at $5.8 billion) compared to 12,157 EUs (valued at $6.0 billion) at the end Q4 2017, and 9,984 EUs (valued at $5.1 billion) at the end of Q1 2017.

NFI Group's total backlog consists of transit buses and motor coaches primarily for public customers.  Transit buses and motor coaches incorporating clean propulsion systems including natural gas, diesel-electric hybrid, electric-trolley, and battery-electric represent approximately 55% of the total backlog.  Zero-emission buses and motor coaches (battery-electric, fuel cell-electric and electric-trolley) represent approximately 4.5% of total backlog. 

Market Demand

NFI Group'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 Q1 2018 active EUs were 6,453 and total Bid Universe was 23,538 EUs. 

Procurement of heavy-duty 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, NFI Group does not publish a Bid Universe metric for private sector buses or motor coaches.

Sales of cutaway and medium-duty buses manufactured by ARBOC are generated on a transactional purchase order basis through third party dealers who hold contracts directly with the operators.  Bids are submitted by and agreements are held with a network of dealers and therefore cutaway and medium-duty bus activity is not included in the Bid Universe metric.

Parts Activity

Total shipments by NFI Parts for Q1 2018 increased by 9.7% compared to the previous quarter, and increased by 4.2% compared to Q1 2017.

Gross orders received by NFI Parts increased by 1.2% in Q1 2018 compared to Q4 2017, while increasing by 6.6% over  Q1 2017 orders.

ARBOC aftermarket parts orders and shipments are not included in these figures as they are not material.

Outlook

Management continues to expect bus procurement activity by public transit agencies throughout the U.S. and Canada to remain robust based on an aging fleet, healthy overall economic conditions, expected customer fleet replacement plans, and active or anticipated procurements.  As the population ages and ease of access becomes more of a focus, management also believes the demand for low-floor cutaway and medium-duty buses with greater accessibility will grow from its current level of 5% of the total market, following the migration that occurred in heavy-duty transit bus space.

Management continues to anticipate stable private sector demand for motor coaches through 2018 given market dynamics including the economy, travel trends and credit markets.

NFI Group's master production schedule combined with current backlog and orders anticipated to be awarded by customers under new procurements is expected to enable NFI Group to deliver approximately 4,350 EUs in fiscal 2018 with production rates varying from quarter to quarter due to product mix and award timing.

2018 deliveries are expected to comprise of the following vehicle types:

While parts sales remain difficult to forecast, management expects the parts market to remain relatively stable in 2018, but may experience quarter-to-quarter volatility, which is typical for this segment of the business.

NOTE: All dollar amounts are stated in U.S. currency based on an exchange rate of U.S. $1.00 = CAD $1.2894 to calculate the value of the Canadian contracts in this release.

About NFI Group

NFI Group and its subsidiaries comprise the largest bus and motor coach manufacturer and parts distributor in North America, with 32 fabrication, manufacturing, distribution, and service centers located across Canada and the United States and employing nearly 6,000 team members.

NFI Group provides a comprehensive suite of mass transportation solutions under several brands: New Flyer^® (heavy-duty transit buses), ARBOC^® (low-floor cutaway and medium-duty buses), MCI^® (motor coaches), and NFI Parts™ (bus and coach parts, support, and service). NFI Group's vehicles incorporate the widest range of drive systems available ranging from clean diesel, natural gas, diesel-electric hybrid, trolley-electric, battery-electric, and fuel cell-electric.

• New Flyer is North America's heavy-duty transit bus leader and offers the most advanced product line under the Xcelsior^® and Xcelsior CHARGE™ brands. New Flyer actively supports over 44,000 heavy-duty transit buses (New Flyer, NABI, and Orion) currently in service, of which 7,300 are powered by electric motors and battery propulsion and 1,600 are zero-emission.
  
  
• ARBOC is North America's low-floor, body-on-chassis ("cutaway") bus leader serving transit, paratransit, and shuttle applications. With more than 3,000 buses in service, ARBOC leads the low-floor cutaway bus market providing unsurpassed passenger accessibility and comfort over traditional high-floor cutaway vehicles. ARBOC also offers a medium-duty bus for transit and shuttle applications.
  
  
• Motor Coach Industries is North America's motor coach leader offering the J-Series, the industry's best-selling intercity coach for 11 consecutive years, and the D-Series, the industry's best-selling motor coach line in North American history. MCI actively supports over 28,000 coaches currently in service.
  
  
• NFI Parts is North America's most comprehensive parts organization, providing replacement parts, technical publications, training, service, and support for NFI Group's bus and motor coach product lines.

Further information is available at www.newflyer.com, www.arbocsv.com, and www.mcicoach.com. The common shares of NFI Group 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 NFI Group 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 those 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, NFI Group 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.