New Flyer Announces Third Quarter 2012 Orders and Backlog
WINNIPEG, Oct. 15, 2012 /CNW/ - (TSX: NFI) (TSX: NFI.DB.U) New Flyer Industries Inc. ("New Flyer" or the "Company"), the leading manufacturer of heavy-duty transit buses in Canada and the United States, announced order activity for the third fiscal quarter ended September 30, 2012 ("Q3 2012").
The New Flyer order activity increased during Q3 2012 as new firm orders of 357 equivalent units ("EUs") with a total value of $137.9 million, increased significantly compared to firm orders of 12 EUs valued at $4.3 million in third fiscal quarter ended October 2, 2011 ("Q3 2011"). There were also 90 EUs of new options awarded in Q3 2012 which is comparable to the 90 EUs of options received in Q3 2011. In addition, the Company was also successful at converting options comprised of 224 EUs with a total value of $117.3 million as compared to 328 EUs ($131.7 million) in Q3 2011.
Deliveries of 386 EUs in Q3 2012 decreased compared to 442 EUs in Q3 2011 as a result of a previously announced delay in receiving a notice to proceed ("NTP") from a large U.S. customer for an order of 90 Xcelsior 60-foot articulated buses or 180 EUs which caused an adjustment to the production schedule. The NTP has now been received and production has begun.
|2012 (Current Year)||2011 (Prior Year)|
|(EUs)||Firm orders||Options||Firm orders||Options|
|Ending Backlog - Q2||1,267||4,946||1,887||6,384|
|New orders in Q3||357||90||12||90|
|Ending Backlog - Q3||1,462||4,744||1,785||5,940|
As noted in the company's September 17, 2012 press release, the total backlog combined with the recent order intake is expected to allow New Flyer to average a production line entry rate of approximately 34 EUs per week for fiscal 2012. Management expects the line entry rate during the fourth fiscal quarter of 2012 will average approximately 36 EUs per week. This line entry rate reflects twelve weeks of production as the Company does not plan to line enter new buses into production during the winter holiday period occurring the last six days of this year.
At the end of the period, firm and option orders of 402 new buses (472 EUs) for New Flyer were pending from a number of customers where approval had been granted 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 total backlog at the end of Q3 2012 is 6,206 EUs with a total value of $2.64 billion. The decline in the backlog appears to be slowing as it has decreased by 0.3% from the backlog at the end of the second fiscal quarter of 2012 ("Q2 2012") as compared to the 19.4% decrease from the backlog at the end of Q3 2011. New Flyer's backlog consists of the following mix of products, with clean propulsion vehicles (such as, hybrid, CNG, LNG, Trolley, all-electric), representing approximately 65% of the total:
|Firm EUs||Option EUs||Total|
|35/40 foot buses||622||2,148||2,770|
|60 foot buses||840||2,596||3,436|
In the first three fiscal quarters of 2012 ("YTD 2012"), 187 option EUs expired or 3.0% of the total New Flyer backlog. Remaining options included in the total backlog will expire, if not exercised, as follows:
|Option year of expiry||2012||2013||2014||2015||2016||2017||Total Options|
|Remaining Option (EUs)||549||3,116||423||510||56||90||4,744|
New Flyer Bid Universe
The New Flyer bid universe is a summary of the EUs for: all bids received and in process at New Flyer, bids submitted and awaiting customer action and management's forecast of all expected EUs to be ordered over the next five years. The bid universe was created by management in 2008 as an indicator of management's forecast for overall market demand and bid activity.
|Bids in Process||Bids Submitted||
In addition to the increased bid universe activity over the last year, management believes the overall transit market continues to show some positive signs. Preliminary data from the September 19, 2012 data alert issued by the Rockefeller Institute on U.S. state tax collections shows an increase in the second quarter of 2012 for the 10th consecutive quarter, with a reported 3.0% increase over the prior year.
The latest data from the American Public Transportation Association's (APTA) ridership report indicated an increase of 1.62% in all modes of U.S. transit ridership during the second quarter of 2012 compared with the previous year, with bus ridership specifically up by 0.7%.
In the aftermarket, gross orders received during Q3 2012 for New Flyer core parts sales increased by 9.8% compared to Q3 2011 and increased 11.5% compared to Q2 2012. Gross orders during YTD 2012 were up 2.7% at $86.8 million compared to $84.5 million for the same period in 2011.
NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = CAD $0.983 to calculate the value of the Canadian contracts in this release.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in Canada and the United States. The Company's three manufacturing facilities - in Winnipeg, MB; St. Cloud, MN and Crookston, MN - are all ISO 9001, ISO 14001 and OHSAS 18001 certified. The Company currently operates a parts fabrication facility in Elkhart, IN and four parts distribution centers in Winnipeg, MB; Brampton, ON; Erlanger, KY and Fresno, CA. The Company also operates a service center in Arnprior, ON.
With a skilled workforce of over 2,000 employees, New Flyer is a technology leader, offering the broadest product line in the industry, including drive systems powered by clean diesel, LNG, CNG and electric trolley as well as energy-efficient diesel-electric hybrid vehicles. New Flyer has delivered over 32,000 heavy-duty buses in Canada and the United States. All products are supported with an industry-leading, comprehensive parts and service network. Further information is available on New Flyer's web site at www.newflyer.com.
The common shares and convertible unsecured subordinated debentures of New Flyer are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, respectively.
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 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.
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