WINNIPEG, July 15, 2013 /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 second fiscal quarter ended June 30, 2013 ("Q2 2013").
The order and delivery activity and backlog for Q22013 reported herein does not include any activity from North American Bus Industries, Inc., now called NABI Bus LLC ("NABI Bus"), which was acquired by New Flyer on June 21, 2013. The Company is currently reviewing all active contracts contributing to the reported NABI Bus total backlog of 1,579 equivalent units ("EUs") (of which 593 were firm and 986 were options). The Company will synchronize and ensure consistent classification and reporting practices for the combined backlog commencing with the Q2 2013 reporting period including Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and the related earnings press release. Management expects NABI Bus to build at an average line entry rate of approximately 12 EUs per production week at the Anniston, Al production facilities for the remainder of fiscal 2013.
Order Activity, Option Expiry and Deliveries
New orders (firm and options) for New Flyer in Q2 2013 totaled 513 EUs, an increase from just 90 EUs in second fiscal quarter ended July 1, 2012 ("Q2 2012").
- New firm orders were received for 253 EUs (valued at $108.7 million)
- New options in Q2 2013 were received for 260 EUs (valued at $115.4 million).
- In addition, New Flyer was successful at converting options for 38 EUs (valued at $17.6 million) in Q2 2013.
|(EUs)|| New Orders
| LTM New Orders
| LTM Option
New Flyer delivered 474 EUs in Q2 2013, an increase of 33 EUs over the 441 EUs delivered in Q2 2012. The total New Flyer backlog combined with the recent order intake is expected to enable the Company to continue to build at an average line entry rate of approximately 36 EUs per production week at the New Flyer production facilities for fiscal 2013.
In Q2 2013, a total of 174 option EUs expired, related to three contracts which reached the end of their respective contract terms. The maximum term for a contract permitted by the US Federal Transit Administration is five years. Remaining options included in the New Flyer backlog will expire, if not exercised, as follows:
|Year of option expiry||2013||2014||2015||2016||2017||2018||Total Options|
|Remaining Option (EUs)||2,415||1,117||497||99||545||1003||5,676|
Note that 1,520 of the options that are eligible to expire in December 2013 relate to the deferred customer order added to the backlog in 2008.
New Flyer Book-to-Bill ratio (defined as new order intake - both firm and options - divided by deliveries in the quarter) was 232% over the last twelve months. Consistent with the backlog reporting, the Book-to-Bill ratio does not include the activity of the company's newly acquired subsidiary NABI Bus.
At the end of the period, new firm and option orders of 50 buses (100 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.
In addition to these pending orders, the Company was advised in the week following the end of Q2 2013 of the following upcoming awards:
- New Flyer has been selected by a major US public transit agency to provide up to 350 40' and up to 180 60' electric trolley Xcelsior buses (a total of up to 710 EUs). The agency has issued New Flyer a letter of Intent to Award, and has commenced all pre-award audits. Once all required approvals and audits are completed, a notice to proceed ("NTP") will be issued, at which time New Flyer will add the order to the backlog and issue a press release.
- NABI Bus has been selected by a major US public transit agency to provide up to 238 40' diesel-electric hybrid BRT buses, up to 370 40' CNG BRT buses, and up to 71 60' diesel-electric hybrid BRT buses (a total of up to 750 EUs). The agency has issued NABI a letter of Intent to Award, and has completed pre-award audits. Once all required documentation is complete, a NTP will be issued, at which time New Flyer will add the order to the backlog and issue a press release.
At the end of Q2 2013, New Flyer's total backlog decreased to 7,392 EUs (for a total value of $3.25 billion) which is a decrease of 1.8% from the backlog at the end of the first quarter of 2013 ("Q1 2013"). The firm backlog includes 65 EUs from five different customers where orders and contract documentation was received prior to the end of Q2 2013 but announcements outlining the details of these contracts are awaiting customer approval prior to release.
|Total Backlog (EUs)||2013 (Current Year)|
| Firm Orders
| Ending backlog: Q1-13
New orders in Q2-13
Options exercised in Q2-13
Deliveries in Q2-13
Cancelled/Expired options in Q1-13
|Ending Backlog: Q2-13||1,716||5,676|
New Flyer's backlog consists of the following mix of bus lengths, with clean propulsion vehicles (such as, electric-hybrid, electric-trolley, CNG, LNG, and all-electric), representing approximately 75% of the total:
|Firm EUs||Option EUs||Total|
|35 and 40 foot heavy-duty buses||1,082||2,966||4,048|
|60 foot heavy-duty articulated buses||634||2,710||3,344|
New Flyer Bid Universe
The bid universe was created by New Flyer in 2008 as an indicator for overall transit bus market demand and active bids. 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 forecast of all expected EUs to be placed out for competition over the next five years. Unlike the order and backlog activity, the New Flyer bid universe has been reconciled with NABI's bid universe and approximately 300 additional EUs were added in Q2 2013.
| RFPs (EUs) in
Process at NFI
| Bids or
| Forecasted New
over the next 5 years
Management believes that the transit bus market continues to show positive signs of recovery. The total number of active EUs where RFPs were received and in process of review at New Flyer, and bids or proposals submitted by New Flyer awaiting customer action at the end of Q2 2013 remains high at 8,489 EUs, compared to 7,318 EUs at the end of Q1 2013.
Management also remains encouraged with US general economic health improvement with preliminary data from the Rockefeller Institute (Data Alert on June 5, 2013) reporting State tax collections increasing in the first quarter of 2013 for the 13th consecutive quarter, with a 9.3% increase over the prior year.
The latest data from the American Public Transportation Association's (APTA) ridership report indicated a decrease of 1.91% in all modes of U.S. transit ridership during Q1 2013 compared with the previous year; and a decrease in bus ridership of 2.17%. The same report indicates Canadian ridership decreased by 2.62% in all modes of transit ridership during the first quarter of 2013 as compared to the previous year.
New Flyer Aftermarket
Gross orders received by New Flyer's aftermarket business during Q2 2013 for core parts sales increased 49% compared to Q2 2012, while shipments in Q1 2013 increased 17.1% over Q1 2012. Order intake in Q2 2013 has been significantly impacted as ramp up for the previously announced Chicago Transit Authority Midlife Overhaul program begins in earnest and orders from the Orion parts business, which was acquired in the first quarter of 2013, are included in the aftermarket order intake.
Q2 2013 orders also rose 18.9% over Q1 2013 and shipments were up 6.9% over Q1 2013. Management continues to experience a challenging price environment.
Similar to the NABI Bus order and backlog activity, New Flyer will synchronize and ensure consistent classification and reporting practices for the combined aftermarket orders and shipments commencing with the Q2 2013 reporting period including the MD&A and the related press release.
NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = CAD $1.0518 to calculate the value of the Canadian contracts in this release.
About New Flyer
New Flyer is a 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 including drive systems powered by: clean diesel, natural gas and electric trolley as well as energy-efficient diesel-electric hybrid vehicles. All buses are supported by an industry-leading comprehensive warranty and support program, and service network. New Flyer and its recently acquired subsidiary NABI, also operate the transit industry's most sophisticated aftermarket parts organization, sourcing parts from hundreds of different suppliers and providing support for all types of heavy-duty transit buses.
Together New Flyer and NABI employ over 3,000 team members with manufacturing, fabrication, parts distribution and service centers in both Canada and the United States. Further information is available on New Flyer's web site at www.newflyer.com.
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.
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