New Flyer Announces First Quarter 2011 Orders and Backlog
Winnipeg, Manitoba, Canada, April 15, 2011: 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 order activity for the first fiscal quarter of 2011 ended April 3, 2011 (“Q1 2011”) of 208 buses or 218 equivalent production units (“EUs”), with a total value of US $93 million. This order activity comprises new firm and new option orders of 131 buses (131 EUs) and exercised options of 77 buses (87 EUs). The order intake level was 39% higher than during the first fiscal quarter of 2010 (“Q1 2010”), being 218 EUs compared to 156 EUs. Total orders received over the last four (4) quarters, at 2,814 EUs, was 2% higher than the 2,752 EUs ordered during fiscal 2010.
These first 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, and compressed natural gas (“CNG”) propulsion systems. Approximately 30% of the EUs in these orders are for clean-propulsion (i.e., hybrid or CNG) vehicles.
Some of the order activity during Q1 2011 included:
- The Board of New York’s Metropolitan Transportation Authority (“MTA”) voted to award New Flyer a contract for 90 diesel 40’ Xcelsior model buses, and management expects to enter into a contract with MTA in due course. The MTA operates New York City Transit, the largest transit agency in North America.
- The Central Area Transportation Authority of State College, PA selected New Flyer as the successful bidder for up to 40 diesel 40’ Xcelsior model buses. CATA expects to place a firm order for 11 buses and will retain options for a further 29 units.
- Mississauga Transit, Mississauga ON converted options to firm orders for an additional 8 – 40’ Xcelsior diesel buses.
- The San Diego Metropolitan Transit System of San Diego, CA converted an additional 26 options into firm orders for CNG-powered 40’ buses.
- Sound Transit, the regional operator in the Seattle WA area, ordered an additional 10 – 60’ diesel articulated buses via converted options.
- The Pioneer Valley Transit Authority of Springfield, MA ordered a total of 10 hybridelectric 40’ Xcelsior buses, from assigned options. Five of the buses will be operated in regular urban service, and the other five will provide service in and around the University of Massachusetts.
During Q1 2011 options to purchase 36 EUs expired compared to options for 37 EUs expiring in Q1 2010.
Bus deliveries in Q1 2011 were 468 EUs and, as a result, new firm orders and options received in the quarter of 131 EUs represent 28% of buses delivered during the quarter. Management advises that order activity is not consistent on a quarterly basis and therefore believes the ratio of orders received to deliveries is more meaningful, compared on an annual basis. Over the past four quarters the company has delivered 2,039 EUs and received new orders (firm and options) totaling 2,045 EUs. The annual ratio of new orders received to deliveries has approximated 1.0 to 1.0 for the past three quarters. In comparison, the annual ratio of new orders received to deliveries was approximately 0.75 to 1 in the first half of fiscal 2010. New Flyer’s large option backlog includes the widest available range of bus models, lengths, and propulsion options for prospective customers with varying needs. The total backlog at the end of Q1 2011 was 8,339 EUs, a decrease of 4% from the 8,712 EUs in the backlog at the end of the fourth quarter of 2010 ended December 31, 2010 (“Q4 2010”). The firm portion of the total backlog is 1,617 EUs, compared with 1,897 EUs at the end of Q4 2010. The value of the order backlog at the end of Q1 2011 decreased to $3.54 billion, compared with $3.68 billion at the end of Q4 2010. Clean propulsion vehicles represent approximately 68% of the total backlog.
New Flyer’s current backlog consists of the following mix of products:
|Firm EUs||Options EUs||Total|
|40 foot and under buses||999||3,516||4,515|
|60 foot buses||618||3,206||3,824|
Options included in the backlog expire, if not exercised, as follows:
|Expiry Year||Options EUs|
At the end of Q1 2011, there were approximately 12,900 EUs in New Flyer’s new potential pipeline or bid universe for heavy-duty transit buses, a slight increase from the approximately 12,600 EUs reported at the end of Q4 2010. The anticipated release of a number of large tenders from major agencies in 2011 is expected to increase the level of bid activity.
During Q1 2011, New Flyer received its first order for ten of the used articulated buses previously owned by the City of Ottawa. As previously reported, New Flyer agreed to take back 226 used articulated buses as part of an order with Ottawa for 306 new articulated buses. All of the new buses have been shipped to the City of Ottawa and by the end of Q1 2011 New Flyer had received 217 of the used buses. Following extensive refurbishment at New Flyer’s Arnprior, ON maintenance facility, these ten used buses are expected to be shipped to a US customer in the second quarter of 2011. The Company intends to report revenue from the sale of these used buses in the results of its aftermarket operations and accordingly, the used buses are not reflected in the bus order backlog.
The Company’s aftermarket parts order backlog has improved from a 12-month low that occurred at the beginning of Q4 2010. Aftermarket parts orders received during Q1 2011 exceeded orders received in each of the previous three fiscal quarters.
Funding challenges for transit agencies in the United States have been affected by the political events that nearly led to a shutdown of the US federal government in early April 2011. While certain types of transit grants were eliminated or greatly reduced in the resulting compromise budget, the main budget categories from which transit bus procurements are funded were largely left intact at 2010 levels. At the same time, the American Public Transportation Association (“APTA”) reported that U.S. transit bus ridership declined 1.9% in the 4th quarter of 2010 year over year and declined 2.4% in 2010 over 2009, indicating that the rate of decline may be slowing. During late February and early March 2011, gasoline prices in the United States increased and APTA has reported that transit systems are experiencing slight increases in ridership.
NOTE: All dollar amounts are stated in US currency based on an exchange rate of US $1.00 = Cdn. $0.96 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 manufacturing facilities — in Winnipeg, MB, St. Cloud, MN and Crookston, MN – are all ISO 9001, ISO 14001 and OHSAS 18001 certified.
During 2010, New Flyer’s footprint expanded in three key locations. Service centers were added in Arnprior, Ontario and in New York City as the Company’s Customer Services group worked to enhance revenue in keeping with corporate strategic plans. In addition, New Flyer acquired TCB Enterprises, LLC of Elkhart, IN. TCB is now operated as an indirect subsidiary of New Flyer and is a high quality manufacturer and supplier of transit interior lighting, stanchions, and seating. New Flyer has recently announced its intention to open a fourth Parts Distribution Centre in southern Ontario, Canada in the fall of 2011.
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. 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
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, parts and services 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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