WINNIPEG, Oct. 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 third fiscal quarter ended September 29, 2013 ("Q3 2013").
This order and delivery activity and backlog for Q3 2013 reflects the consolidated Company activity of New Flyer including its NABI Bus, LLC ("NABI Bus") and NABI Parts, LLC ("NABI Parts") subsidiaries acquired on June 21, 2013.
Bus Deliveries, Order Activity, and Option Expiry
New Flyer delivered 577 equivalent units ("EUs"), in Q3 2013, an increase of 191 EUs over the 386 EUs delivered in the third fiscal quarter ended September 30, 2012 ("Q3 2012"). The work in process ("WIP") for the Company at September 29, 2013 was 320 EUs which represents an increase of 15 EUs during Q3 2013.
New bus orders (firm and options) for New Flyer in Q3 2013 totaled 2,431 EUs, an increase from 447 EUs in Q3 2012. Order activity in Q3 2013 included:
- New firm orders were received for 957 EUs (valued at $501.1 million)
- New options were received for 1,474 EUs (valued at $873.1 million).
- Successful option conversion of 116 EUs (valued at $53.3 million).
| New Orders
| LTM New Orders
| Option EU
| LTM Option EU
New Flyer's last twelve months ("LTM") Book-to-Bill ratio (defined as new firm and option orders divided by deliveries) was 309% compared to 33% just one year ago.
In Q3 2013, a total of 500 option EUs expired, related to three US contracts which reached the end of their respective contract terms. The maximum term for a contract permitted by the US Federal Transit Administration ("FTA") 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 Option EUs|
|Remaining Option (EUs)||1,761||1,668||866||222||663||1962||7,142|
Note that 1,800 EUs in the total backlog are eligible to expire in the fourth quarter of 2013 relating to a specific US customer order that was added to the New Flyer backlog in 2008 and then deferred by the customer in 2009. This order will reach its five year term in November 2013, and management expects to remove 240 firm EUs and options for 1,560 EUs from the New Flyer backlog. The Company has not included this deferred order in any of its production plans since 2009.
At the end of the period, new firm and option orders of 78 buses (101 EUs) were pending from a number of customers where approval had been granted to New Flyer 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.
At the end of Q3 2013, New Flyer's total backlog increased by 16% to 9,890 EUs (for a total value of $4.6 billion) from the backlog at the end of the second quarter of 2013 ("Q2 2013"). The total New Flyer backlog combined with the recent order intake is expected to enable the Company to continue to operate at a combined average line entry rate of approximately 48 EUs per production week at the New Flyer and NABI Bus production facilities for fiscal 2013.
The firm backlog includes 128 EUs from two different customers where orders and contract documentation was received by New Flyer prior to the end of Q3 2013, but announcements outlining the details of these contracts are awaiting customer approval prior to release.
|Total Backlog (EUs)|| Firm Orders
| Ending backlog at Q2 2013
New orders in Q3 2013
Options exercised in Q3 2013
Deliveries in Q3 2013
Cancelled/expired options in Q3 2013
|Ending Backlog at Q3 2013||2,748||7,142||9,890|
New Flyer's backlog consists of the following mix of bus lengths, with clean propulsion systems such as, electric-hybrid, electric-trolley, natural gas and all-electric representing approximately 77% of the total.
| Firm Orders
|35 and 40 foot heavy-duty buses||2,016||3,684||5,700|
|60 foot heavy-duty articulated buses||732||3,458||4,190|
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's forecast of all expected EUs to be placed out for competition over the next five years.
The number of EUs in the total New Flyer Bid Universe at the end of Q3 2013 was 19,941 EUs compared to 17,730 EUs at the end of Q3 2012. 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 Q3 2013 was 8,117 EUs, compared to 8,489 EUs at the end of Q2 2013.
| RFPs (EUs)
| Bids or
| Total Active
(EUs) over the
next 5 years
| Total EUs
Ridership and Funding Environment
The latest data from the American Public Transportation Association's (APTA) ridership report indicated an increase of 1.16% in all modes of U.S. transit ridership during Q2 2013 compared with the previous year; and an increase in bus ridership of 0.54%. The same report indicates Canadian ridership increased by 0.87% in all modes of transit ridership during the first quarter of 2013 as compared to the previous year. Note that the report does not specifically cite bus specific data on Canadian ridership.
Management remains encouraged by the general economic health improvement of the US states with preliminary data from the Rockefeller Institute (Data Alert on September 18, 2013) reporting state tax collections increasing in the second quarter of 2013 for the 14th consecutive quarter, with an 11% increase over the prior year.
The recent US federal government furlough has interrupted most FTA activity, including processing bus procurement grants or making payments to grantees. According to the Department of Transportation, during the shutdown FTA has four people designated as "essential" to perform "life and safety" activities authorized in MAP-21 and "oversee the lawful continuation of other functions".
While the furlough continues through its second week, according to various major news services President Obama and Congressional leaders have been in talks recently on issues ranging from a resolution on raising the debt ceiling to a possible continuing resolution funding the federal government.
The risk to the Company, depending on the duration of the furlough may include: the delay in the release of new RFPs, the delay in contract awards currently in process, the delay of purchase orders for programs already under contract, or delayed payment for invoiced orders. To date the impact on the Company has been immaterial.
New Flyer Aftermarket
Gross parts orders received by New Flyer's aftermarket business during Q3 2013 (inclusive of NABI Parts and the integrated Orion parts business) increased 102% compared to Q3 2012, while parts shipments in Q3 2013 increased 99% over Q3 2012. Quarter over quarter Q3 2013 gross parts orders rose 14% over Q2 2013, while parts shipments were up 16% over Q2 2013 (inclusive of NABI Parts and the integrated Orion parts business).
Order intake and delivery continues to be impacted by: the ramp up for the previously announced Chicago Transit Authority Midlife Overhaul program, the transition activities that culminated in the full integration of all Orion order taking and shipping activity into New Flyer and the addition of the NABI Parts business. Management continues to experience a challenging price environment.
NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = CAD $1.0303 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 subsidiaries NABI Bus and NABI Parts, 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.
The common shares and convertible unsecured subordinated debentures of the Company are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DBU, 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 including the potential effects of the current US government furlough on customers' abilities to issue new RFPs, award contracts and to order and pay for buses and parts and services. 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, the duration of the current US government furlough and the resulting economic impact on transit agencies ability to issue new RFPs, award contracts and to order and pay for buses and parts and 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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