New Flyer Announces First Quarter 2013 Orders and Backlog
Winnipeg, Manitoba, Canada, April 16, 2013: (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 update for the first fiscal quarter ended March 31, 2013 (“Q1 2013”).
Order Activity, Option Expiry and Deliveries
The total order activity in Q1 2013 has significantly improved and represents the fourth consecutive quarter of improved order intake. New orders (firm and options) for Q1 2013 totalled 2,004 equivalent units (“EUs”), which represents the highest level of order intake by New Flyer in a quarter since the fourth quarter of 2008.
- New firm orders were received for 493 EUs (valued at $229.0 million), a significant increase compared to firm orders of 28 EUs in the fiscal quarter ended April 1, 2012 (“Q1 2012”).
- New options in Q1 2013 were received for 1,511 EUs (valued at $719.8 million), compared to no new options awarded in Q1 2012. In addition, New Flyer was successful at converting options for 224 EUs (valued at $99.15 million) in Q1 2013, as compared to 148 EUs converted in Q1 2012.
(Firm & Options)
|LTM New Orders
(Firm & Option)
|Option Conversions||LTM Option
New Flyer delivered 490 EUs in Q1 2013, an increase over the 442 EUs in Q1 2012. The total backlog combined with the recent order intake is expected to enable New Flyer to continue to average a production line entry rate of approximately 36 EUs per week for fiscal 2013.
At the end of Q1 2013, the total backlog was comprised of 7,527 EUs, having a total value of $3.3 billion including 56 EUs from seven different customers where orders and contract documentation were received just prior to the end of Q1 2013. The Company is now preparing announcements outlining the details of these contracts, but first requires customer approval to release.
The total backlog at Q1 2013 increased by 19% from the backlog at the end of Q4 2012, resulting from an increase in firm order backlog of 227 EUs and an increase of 975 EUs in the option backlog.
|Total Backlog (EUs)||2013 Current Year|
|Ending backlog: Q4-12
New orders in Q1-13
Options exercised in Q1-13
Deliveries in Q1-13
Cancelled/Expired options in Q1-13
|Ending Backlog: Q1-13||1899||5629|
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 78% of the total:
|Firm EUs||Option EUs||Total|
|35 and 40 foot heavy-duty buses||1,067||2,918||3,985|
|60 foot heavy-duty articulated buses||832||2,710||3,542|
In Q1 2013 a total of 312 option EUs expired, related to four 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 total backlog will expire, if not exercised, as follows:
|Year of option expiry||2013||2014||2015||2016||2017||2018||Total|
|Remaining Option (EUs)||2,767||971||503||41||545||801||5628|
New Flyer Book-to-Bill ratio (defined as new order intake – both firm and options – divided by deliveries in the quarter) was 211% over the last twelve months.
At the end of the period, new firm and option orders of 464 buses (518 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.
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.
(EUs) over the
next 5 years
Management believes that the transit market continues to show positive signs of recovery. A number of large bids were awarded in Q1 2013, as reflected in the total bid universe decreasing by more than 4,000 EUs from the previous quarter. The total number of 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 2013 remains high at 7,318 EUs, compared to 5,497 EUs at the end of Q1 2012 and 2,586 EUs at the end of Q1 2011.
Management remains encouraged with US general economic health improvement with preliminary data from the Rockefeller Institute (Data Alert on March 6, 2013) reporting State tax collections increasing in the fourth quarter of 2012 for the 12th consecutive quarter, with a 5.7% increase over the prior year.
The latest data from the American Public Transportation Association’s (APTA) ridership report indicated a decrease of 2.04% in all modes of U.S. transit ridership during Q3 2012 compared with the previous year; however bus ridership remained flat. The same report indicates Canadian ridership increased by 2.82% in all modes of transit ridership during the fourth quarter of 2012 as compared to the previous year.
New Flyer Aftermarket
Gross orders received by New Flyer’s aftermarket business during Q1 2013 for core parts sales increased 11.3% compared to Q1 2012, while shipments in Q1 2013 increased 3.6% over Q1 2012. Q1 2013 orders also rose 5.4% over Q4 2012 and shipments were up 13.3% over Q4 2012. 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 $1.016 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 Canada and the United States. 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. The Company currently operates a parts fabrication facility in Elkhart, IN and four parts distribution centers in Winnipeg, MB; Brampton, ON; Erlanger, KY and Fresno, CA. The Company also operates a New Product Development center in Winnipeg, MB and a Service Center in Arnprior, ON.
With a skilled workforce of over 2,200 employees, New Flyer is a technology leader, offering the broadest product line in the industry, including drive systems powered by clean diesel, LNG, CNG, electric trolley as well as energy-efficient diesel-electric hybrid vehicles. New Flyer has delivered over 32,000 heavy-duty buses in Canada and the United States. All products are supported with an industry-leading, comprehensive parts and service network. Further information is available on New Flyer’s web site at www.www.newflyer.com.
The common shares and convertible unsecured subordinated debentures of New Flyer are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, 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. 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.
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