New Flyer Announces Second Quarter 2010 Orders and Backlog
Winnipeg, Manitoba, Canada, July 16, 2010: New Flyer Industries Inc. (TSX:NFI.UN) (“New Flyer” or the “Company”), the leading manufacturer of heavy-duty transit buses in Canada and the United States, announced total orders for the second quarter of 2010 totaled 804 buses or 1,146 equivalent production units or “EUs”, for a total of US $417 million. This total order activity comprised new firm and new option orders of 584 buses (852 EUs) and exercised options of 220 buses (294 EUs).
New Flyer’s order backlog as of July 4, 2010 was 8,492 EUs, consistent with the 8,513 EUs in the backlog as of April 4, 2010. The firm portion of the total backlog increased in the second quarter by 351 EUs, from 1,785 EUs to 2,136 EUs. The dollar value of the order backlog as of July 4, 2010 was approximately $3.5 billion, compared with a value of $3.6 billion as of April 4, 2010. Clean propulsion vehicles represent approximately 63% of the total backlog.
With the orders received in the second quarter, New Flyer’s manufacturing plan averaging 41 EUs per week is now fully sold out through the end of 2010. The second quarter orders are from both current and new customers and are for a variety of vehicle configurations and propulsion systems, including 35-, 40- and 60-foot buses with clean diesel, diesel-electric hybrid, gasoline-electric hybrid and compressed natural gas (“CNG”) propulsion systems. Approximately 14% of the EUs representing these orders (or 165 EUs) are clean-propulsion (i.e., hybrid or CNG) vehicles.
Some of the order activity during the quarter included:
- The City of Ottawa, ON has agreed to purchase 306 – 60 foot diesel buses in a unique arrangement that provides for New Flyer to re-purchase 226 used 60 foot diesel buses for resale and the provision of additional services to the City of Ottawa. This order was the subject of a previous press release by the Company.
- The City of Brampton, ON has awarded a new contract to New Flyer for 30 – 40’ diesel buses and 47 further options. Brampton also exercised options from a previous order for 16 additional 40’ hybrid buses. All of the new buses ordered by Brampton are the new Xcelsior model.
- The City of Ft. McMurray, AB has awarded a contract for 14 – 40’ diesel buses.
- Kings County Public Transit of Hanford, CA has ordered 5 – 35’ CNG buses, in addition to 20 further options.
- York Region, ON has exercised options for 38 – 40’ diesel buses.
- The Maryland Transit Administration, Baltimore MD, has exercised options for 41 – 40’ hybrid buses.
- Metro Transit of Minneapolis MN has exercised options for 11 – 60’ diesel buses.
- The City of Winnipeg MB has exercised options for 30 – 40’ diesel buses.
- Community Transit of Everett WA has awarded a contract for 9 – 40’ diesel buses, 15 – 40’ hybrid buses, and 155 additional options.
During the second quarter, New Flyer was also awarded a contract by the National Joint Powers Alliance in partnership with the State of Georgia for a variety of bus lengths and propulsion systems. This contract will expire on May 27, 2011 and includes provisions for 3 additional one-year extensions. Agencies that wish to join the cooperative purchasing program may purchase buses under the contract as permitted by the program’s rules and regulations. The potential options arising from this program are not included in New Flyer’s option backlog. Management cannot predict whether customers will purchase buses under the contract nor the number of buses that may be purchased; however the contract does offer New Flyer’s customers additional opportunities to procure buses with minimal delays.
This contract is similar in approach structure to a contract announced by New Flyer during the first quarter of 2010. New Flyer is currently and actively in discussions with a number of potential customers to sell buses from this other cooperative purchasing contract.
Finally, the Company is currently negotiating the sale of the 14 incomplete articulated buses (28 EUs) that were built in 2009 for a US customer prior to their order deferral. A firm purchase order has been received from one customer for two of the buses and a second customer has publically announced their intention to purchase the other 12 buses, pending completion of negotiations with New Flyer and upon receiving approval from its board. Management expects that all 14 buses will be completed and delivered in 2010.
New Flyer’s current backlog consists of the following mix of products:
|40 foot and under buses||1,050||3,290||4,340|
|60 foot buses||1,086||3,066||4,152|
Options included in the backlog expire, if not exercised, as follows:
There were 328 option EUs that expired in the second quarter of 2010, 267 of which are from one customer who has expressed their desire to extend the option term. The Company is waiting for the customer’s documentation to extend such options and once received they will be added back to the option backlog totals.
There are approximately 13,900 EUs in New Flyer’s current new potential pipeline or bid universe for heavy-duty transit buses, an increase from the approximately 13,500 EUs reported as of April 4, 2010. The current potential pipeline is now at the highest level since the Company began formally tracking it in the fourth quarter of 2008 and as reported in its press release issued on January 15, 2009.
NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = Cdn. $1.05 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’s three facilities — in Winnipeg, MB, St. Cloud, MN and Crookston, MN – are all ISO 9001, ISO 14001 and OHSAS 18001 certified. 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 gasoline-electric and diesel-electric hybrid vehicles. All products are supported with an industry-leading, comprehensive parts and service network. The Company’s income deposit securities are traded on the Toronto Stock Exchange under the symbol NFI.UN. Further information is available on New Flyer’s web site at www.www.newflyer.com.
This press release may contain forward-looking statements relating to expected future events and financial and operating results of New Flyer and New Flyer Industries Canada ULC (“NFI ULC”) 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 transit agencies to purchase buses 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, New Flyer and NFI ULC disclaim 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.
For further information, please contact:
New Flyer Industries Inc.
Chief Financial Officer
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