New Flyer Announces First Quarter 2015 Orders and Backlog

WINNIPEG, April 14, 2015 /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 its order activity and backlog update for the first fiscal quarter ended March 29, 2015 ("Q1 2015").

Bus Deliveries, Order Activity, and Option Expiry

New Flyer delivered 572 equivalent units ("EUs") in Q1 2015, compared to 554 deliveries in the first fiscal quarter ended March 30, 2014 ("Q1 2014").  The total work-in -process ("WIP") for the Company at March 29, 2015 was 384 EUs, an increase of 26 EUs from the previous quarter.

New Flyer's new bus orders (firm and options) in Q1 2015 totaled 1,020 EUs. 

At the end of the period, an additional 494 EUs of new firm and option orders were pending from customers where approval of the award 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 therefore not yet included in the backlog.

Order activity in the period included:

  • New firm orders for 235 EUs (valued at $102.6 million)
  • New option orders for 785 EUs (valued at $360.2 million)
  • Options for 157 EUs (valued at $68.3 million) converted to firm orders

New Orders

in Quarter

(Firm and

Option EUs)

LTM New

Orders 

(Firm and

Option EUs)

Option EUs

Converted in

Quarter 

Option EUs

Converted

LTM 

Q1 2014

559

3,834

506

883

Q2 2014

476

3,797

121

966

Q3 2014

109

1,475

359

1,209

Q4 2014

1,325

2,469

163

1,149

Q1 2015

1,020

2,930

157

800

New Flyer's last twelve months ("LTM") Book-to-Bill ratio (defined as new firm and option orders divided by deliveries) was 119% and has been greater than 100% for eight of the last nine quarters.

The New Flyer backlog and orders anticipated to be awarded by customers under new procurements are expected to enable the Company to continue to operate at a corporate average line entry rate of approximately 51 EUs (including MiDi®) per production week for fiscal 2015.  Management expects the corporate average line-entry rate to remain stable at this level for 2015 as the Company executes on the rationalization of the NABI bus product lines to the Xcelsior® platform.  Production rates may vary from quarter to quarter due to sales mix and the introduction of the Xcelsior into the Anniston, AL facility in 2015.

In Q1 2015, no option EUs expired.  Remaining options in the current backlog will expire if not exercised, as follows:

Year of option expiry 

2015

2016

2017

2018

2019

2020

Total Option EUs

Remaining Options (EUs) 

946

587

573

1,625

1,096

444

5,271

Total Backlog

At the end of Q1 2015, New Flyer's total backlog was 7,193 EUs (valued at $3.57 billion) compared to 6,745 EUs (valued at $3.39 billion) at the end of the fourth quarter of 2014 ("Q4 2014") and 7,683 EUs (valued at $3.69 billion) at the end of Q1 2014.





Total Backlog 

Firm Orders 

Options

Total

(EUs)

(EUs)

(EUs)

Ending backlog at Q4 2014

2,102

4,643

6,745

New orders in Q1 2015

235

785

1,020

Options exercised in Q1 2015

157

(157)

-

Deliveries in Q1 2015

(572)

-

(572)

Cancelled/expired options in Q1 2015

0

0

0

Ending Backlog at Q1 2015 

1,922

5,271

7,193

New Flyer's backlog consists of 30', 35', 40' and 60-foot bus lengths.  Buses incorporating clean propulsion systems (such as natural gas, diesel-electric hybrid, electric-trolley, and battery-electric) represent approximately 75% of the total.

Total Backlog

Firm Orders

Options 

Total

(EUs)

(EUs)

(EUs)

30, 35 and 40-foot buses

1,178

3,019

4,197

60-foot articulated buses

744

2,252

2,996

Total Backlog at Q4 2014

1,922

5,271

7,193

Funding Environment

On December 16, 2014, President Obama signed the combined Omnibus Appropriations and Continuing Resolution that will fund the U.S. federal government through the end of fiscal year 2015.  The resolution extends transit funding to September 30, 2015, and results in full-year funding levels under MAP-21 of approximately $10.7 billion, which is $167 million more than the prior year.

On March 30, 2015, U.S. Department of Transportation Secretary Anthony Foxx issued a revised version of the GROW AMERICA Act, the Administration's proposal for a multi-year surface transportation bill. The revised bill extends funding through fiscal year 2021 and increases the overall authorization level to $478 billion. Other highlights of the revised bill include a 76% increase to transit formula grants, an increase to the state of good repair funding and a discretionary grant program dedicated to bus rapid transit ("BRT") spending.

The proposal also calls for changes to the Buy America requirements that would increase the U.S. content requirements for transit buses from the current 60 percent U.S. content to 70 percent U.S. content in 2016. The U.S. content requirement would then increase to 80 percent in 2017, 90 percent in 2018 and 100 percent in 2019.

As in the previous version, the Administration recommends that surface transportation programs be funded through a restructured Transportation Trust Fund, which includes current Highway Trust Fund revenue supplemented by a transition tax on the foreign earnings that U.S. companies have accumulated overseas.

Economic Environment and Ridership

Preliminary data from the Nelson Rockefeller Institute indicates state tax collections increased in the third quarter of 2014 by four percent over the previous year. State tax collections include personal income tax and sales tax, both of which have increased for 18 of the last 19 quarters, and corporate income taxes have increased for the past five quarters.  Transit ridership in both Canada and the United States remains stable. The American Public Transportation Association's ("APTA") ridership report indicated that as at December 31, 2014, ridership during 2014 remained stable. The report indicated an increase of 0.95% in all modes of U.S. transit ridership during that period compared with the previous year, with a slight decrease in bus ridership of 1.13%.  The same report indicates Canadian ridership increased by 1.27% in all modes of transit ridership during the same period as compared to the previous year. Specific data regarding Canadian bus ridership however, is not available.

Transit Bus Demand

In 2008, New Flyer created the Bid Universe metric as an indicator for overall transit bus market demand and active bids in Canada and the United States.  The Bid Universe is a point-in-time snapshot of the estimated EUs for: all requests for proposals ("RFPs") received and in process of review at New Flyer, bids or proposals submitted by New Flyer awaiting customer action, and management's forecast of all expected EUs to be placed out for competition over the next five years. 

The number of EUs in the total Bid Universe at the end of Q1 2015 was 19,381 EUs. The total number of Active EUs (defined as RFPs received and in process of review at New Flyer and bids or proposals submitted by New Flyer awaiting customer action) at the end of Q1 2015 was 7,067 EUs which is an increase of 338 EUs or 5% from the previous quarter.


RFPs
(EUs) in
process at
New Flyer

Bids or
Proposals
(EUs)
submitted
by New
Flyer


Forecasted
New
Procurements
(EUs) over the
next 5 years


Total
Active

EUs

Total EUs in

Bid Universe

Q1 2014

3,626

2,045

5,671

15,567

21,328

Q2 2014

2,772

1,926

4,698

15,030

19,728

Q3 2014

2,864

3,419

6,283

15,490

21,773

Q4 2014

3,335

3,394

6,729

14,727

21,456

Q1 2015

4,177

2,890

7,067

12,314

19,381

Management anticipates that the amount of bus procurement activity by public transit agencies throughout the U.S. and Canada should remain robust based on expected customer fleet replacement plans and active procurements.

New Flyer Aftermarket

The aftermarket parts business continues to show signs of growth, which is partially offsetting the slowing down of sales for the Chicago Transit Authority mid-life upgrade program as it approaches completion in the second quarter of 2015.  

Gross parts orders received by New Flyer's aftermarket business during Q1 2015 decreased 6.9% compared to Q1 2014, while parts shipments in Q1 2015 increased 22.6% over Q1 2014.

Quarter-over-quarter, gross parts orders decreased by 23.5% over Q4 2014, while parts shipments were up 6.7% over the previous quarter.

NOTE: All dollar amounts are stated in U.S. currency based on an exchange rate of U.S. $1.00 = CAD $ 1.26 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 the United States and Canada. The Company is the industry technology leader and offers the broadest product line of transit buses including drive systems powered by: clean diesel, natural gas, diesel-electric hybrid, electric trolley and now, battery-electric. All buses are supported by an industry-leading comprehensive warranty and support program, and service network. New Flyer also operates the industry's most sophisticated aftermarket parts organization, sourcing parts from hundreds of different suppliers and providing support for all types of transit buses.

The New Flyer group of companies employ over 3,000 team members with manufacturing, fabrication, parts distribution and service centers in both Canada and the United States. Over 32,000 New Flyer and NABI heavy-duty transit buses are in operation today. Further information is available on New Flyer's website at http://www.newflyer.com.

The common shares and convertible unsecured subordinated debentures of the Company are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, respectively.

Forward-Looking Statements

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.

SOURCE New Flyer Industries Inc.

For further information: Jon Koffman, Investor Relations, Tel: 204-224-6672

RELATED LINKS
http://www.newflyer.com

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