Press Releases

New Flyer Announces 2016 Second Quarter Results

Summary (U.S. Dollars except as noted):

  • 2016 results include the acquisition of Motor Coach Industries (“MCI”) effective December 18, 2015
  • Revenue of $586.9 million increased by 56.5% compared to 2015 Q2 revenue of $375.0 million.
  • Adjusted EBITDA of $80.3 million increased by 104.8% compared to 2015 Q2 of $39.2 million.
  • Net earnings of $34.7 million increased 180.9% compared to $12.4 million in 2015 Q2 and earnings per share of $0.58 increased from $0.22 in 2015 Q2.
  • Liquidity improved by $45.9 million to $242.8 million.
  • Free Cash Flow of C$60.8 million increased 130.3% compared to $26.4 million in 2015 Q2 while dividends of C$14.2 million were declared compared to C$8.4 million during 2015 Q2.
  • 2016 YTD Free Cash Flow payout ratio of 20.2% improved as compared to 42.7% in 2015 YTD.


WINNIPEG, August 10, 2016 – New Flyer Industries Inc. (TSX:NFI) (TSX:NFI.DB.U) (the “Company”), the largest transit bus and motor coach manufacturer and parts distributor in North America, today announced its results for the 13-week period ended July 3, 2016 (“2016 Q2”).  The unaudited interim condensed financial statements and Management’s Discussion and Analysis (the “MD&A”) are available at the Company’s web site at: www.www.newflyer.com. Unless otherwise indicated all monetary amounts in this press release are expressed in U.S. dollars.

Operating Results

Transit Bus and Coach Deliveries 2016 2015 % 2016 2015 %
Equivalent Units (“EUs”) Q2 Q2 change YTD YTD change
New transit bus and coach 912 594 53.5 % 1,741 1,166 49.3 %
Pre-owned coach 106 100.0 % 210 100.0 %
Number of Total EUs delivered 1,018 594 71.4 % 1,951 1,166 67.3 %
New transit bus and coach average selling price $ 513.0 $ 481.1 6.6 % $ 513.4 $ 494.4 3.8 %
Pre-owned coach average selling price 123.6 100.0 % 128.5 100.0 %
Total average EU selling price ($US in ‘000s) $ 472.4 $ 481.1 (1.8) % $ 472.0 $ 494.4 (4.5) %


Consolidated Revenue 2016 2015 % 2016 2015 %
(U.S. dollars in millions) Q2 Q2 change YTD YTD change
Transit Bus and Coach Manufacturing $ 480.9 $ 285.8 68.3 % $ 920.9 $ 576.5 59.7 %
Aftermarket 106.0 89.2 18.8 % 219.3 178.8 22.7 %
Total Revenue $ 586.9 $ 375.0 56.5 % $ 1,140.2 $ 755.3 51.0 %

Revenue from transit bus and coach manufacturing operations for 2016 Q2 increased by 68.3% compared to 2015 Q2, primarily resulting from a 71.4% increase in total transit bus and coach deliveries compared to the 13-week period ended June 28, 2015 (“2015 Q2”) and a 6.6% increase in the average selling price of new buses and coaches. The deliveries increased primarily as a result of the inclusion of MCI’s new and pre-owned coaches.  Similarly, bus and coach revenue for the 27-week period ended July 3, 2016 (“2016 YTD”) increased by 59.7% compared to the 26-week period ended June 28, 2015 (“2015 YTD”), primarily as a result of an increase in bus deliveries of 67.3% and an increase in average selling price of new transit buses and coaches.

Revenue from aftermarket operations increased by 18.8% compared to 2015 Q2 and increased 22.7% in 2016 YTD compared to 2015 YTD, primarily as a result of MCI’s aftermarket revenues. The pro forma aftermarket business revenue (which includes MCI) for 2015 Q2 was $124.5 million and $107.7 million when excluding the revenue from the mid-life overhaul program for Chicago Transit Authority (“CTA”). Therefore, the core aftermarket revenue in 2016 Q2 decreased 1.6% compared to the pro forma aftermarket revenue for the core business in 2015 Q2, but increased 2.7% in 2016 YTD compared to 2015 YTD. 2016 YTD also had an extra week compared to 2015 YTD.

Consolidated Adjusted EBITDA 2016 2015 % 2016 2015 %
(U.S. dollars in millions) Q2 Q2 change YTD YTD change
Transit Bus and Coach Manufacturing $ 60.6 $ 22.4 170.5 % $ 106.0 $ 37.1 185.7 %
Aftermarket 19.7 16.8 17.3 % 42.5 33.5 26.9 %
Total Adjusted EBITDA $ 80.3 $ 39.2 104.8 % $ 148.5 $ 70.6 110.3 %
Adjusted EBITDA % of revenue
Transit Bus and Coach Manufacturing 12.6 % 7.8 % 4.8 % 11.5 % 6.4 % 5.1 %
Aftermarket 18.6 % 18.8 % -0.2 % 19.4 % 18.7 % 0.7 %
Total 13.7 % 10.4 % 3.3 % 13.0 % 9.3 % 3.7 %

Consolidated Adjusted EBITDA increased by 104.8% and 110.3% during 2016 Q2 and 2016 YTD respectively, compared to their corresponding periods in the previous year, which is primarily a result of increased unit deliveries and improved margins.  Contributors to the increase in margin in the period is a very favourable sales mix (experienced in the past few quarters), combined with the full impact from the New Flyer and NABI product rationalization.

Margins vary significantly between orders due to factors such as pricing, order size, propulsion system, product type and components specified by the customer. Management cautions readers that quarterly transit bus and coach manufacturing Adjusted EBITDA can be volatile and should be considered over a period of several quarters.

The 2016 Q2 aftermarket operations Adjusted EBITDA increased 17.3% compared to 2015 Q2, primarily as a result of the addition of MCI’s aftermarket business. As well, the 2016 YTD aftermarket Adjusted EBITDA increased 26.9% compared to 2015 YTD.

Net earnings 2016 2015 $ 2016 2015 $
(U.S. dollars in millions) Q2 Q2 change YTD YTD change
Earnings from operations $ 64.8 $ 23.8 41.0 $ 108.7 $ 44.0 64.7
Non-cash (loss) gain (1.6) 0.9 (2.5) 1.0 (1.2) 2.2
Interest expense (10.2) (3.1) (7.1) (21.7) (7.2) (14.5)
Income tax expense (18.3) (9.2) (9.1) (30.6) (12.4) (18.2)
Net earnings $ 34.7 $ 12.4 22.3 $ 57.4 $ 23.2 34.2
Net earnings per share (basic) $ 0.58 $ 0.22 $ 0.36 $ 0.99 $ 0.42 $ 0.57

Net earnings increased by 180.9% compared to 2015 Q2, primarily as a result of improved Earnings from Operations offset by the increase in interest and income tax expense. This resulted in net earnings per common share (“Share”) of $0.58 compared to $0.22 per Share generated during 2015 Q2. Similarly, net earnings for 2016 YTD increased by 146.9% compared to 2015 YTD.


Free Cash Flow 2016 2015 % 2016 2015 %
(CAD dollars in millions) Q2 Q2 change YTD YTD change
Free Cash Flow $ 60.8 $ 26.4 130.3 % $ 122.3 $ 38.8 215.2 %
Declared dividends $ 14.2 $ 8.4 69.0 % $ 24.7 $ 16.6 48.8 %

The Company generated Free Cash Flow of C$60.8 million compared to C$26.4 million in 2015 Q2, primarily as a result of improved Earnings from Operations. The Company declared dividends of C$14.2 million increased compared to C$8.4 million in 2015 Q2, primarily as a result of conversion of Debentures to Shares and the 35.7% annual dividend rate increase announced in May 2016.  During the last twelve months ended July 3, 2016, there were 3.9 million Shares issued as a result of Debenture conversions. As at July 3, 2016, approximately 60% of the original $65 million of Debentures issued had been converted to Shares at a conversion price of $10 per Share. The current annual dividend rate is C$0.95 per Share. The Company’s policy of paying dividends changed to a quarterly basis. The first quarterly dividend on the Shares in the amount of C$0.2375 per Share (being C$0.95 per Share annually) was paid in July 2016.

The Company generated Free Cash Flow of C$122.3 million during 2016 YTD compared to C$38.8 million in 2015 YTD. The Company declared dividends in 2016 YTD of C$24.7 million compared to C$16.6 million in 2015 YTD.  The 2016 YTD Free Cash Flow payout ratio of 20.2% improved compared to 42.7% in 2015 YTD.

The July 3, 2016 liquidity position of $242.8 million is comprised of available cash of $1.7 million and $241.1 million available under the Revolver compared to a liquidity position of $196.9 million at April 3, 2016. The liquidity has improved $45.9 million or 23.3% during 2016 Q2 resulting from improved cash flow from operations.  Management believes these funds, together with equity and debt issuances, other borrowings capacity and the cash generated from the Company’s operating activities, will provide the Company with sufficient liquidity and capital resources to meet its current financial obligations as they come due, as well as providing funds for its financing requirements, capital expenditures, dividend payments and other operational needs for the foreseeable future.



The Company’s Fiscal 2016 annual operating plan for the 53-weeks ending January 1, 2017 is focused on defending and growing its leading market position in the heavy-duty transit bus and motor coach markets through enhanced competitiveness and completing the integration of New Flyer and NABI’s aftermarket businesses (referred to as Project Convergence). Management has now successfully completed the primary milestone for Project Convergence, being the consolidation of all aftermarket parts sales and operations functions to a single organization.

Management continues to gain knowledge and experience about the motor coach business and is actively developing a long-term integration/combination plan for operating the acquired MCI.

The focus has been on culture, facilities upgrades, investigating information technology harmonization potential, coach build quality and customer service.  To date, MCI has performed to the acquisition case, and management believes approximately $5.0 million of the initially targeted annual cost saving synergies of approximately $10 million have been achieved through the rationalization of corporate costs and the coordination of basic sourcing and purchasing activities.

Management is taking the necessary time to evaluate and assess the various scenarios before determining further strategic actions to pursue longer term synergies and improved competitiveness. With the customized nature of the public transit bus and coach market, and the increasing U.S. content requirements resulting from the FAST Act, procurement synergies resulting from sourcing leverage are not easily attained. Further material changes must take into consideration an evaluation from several lenses such as: current supplier agreements, customer specified components, bus reliability and performance, and aftermarket serviceability and spare parts implications.

The current master production schedule combined with the backlog and orders anticipated to be awarded by customers under new procurements is expected to enable the Company to deliver approximately 3,450 EUs for Fiscal 2016 which compares to 3,265 EUs (New Flyer plus pro-forma MCI) in Fiscal 2015 (52-week period).

As previously reported on July 11, 2016, MCI received notice of an Executive Order by the Governor of New Jersey that required an immediate and orderly shutdown of all ongoing work under a contract to build commuter coaches for New Jersey Transit (“NJT”).  MCI currently has a contract with NJT to build 184 coaches in the first year, of which 142 were to be delivered in 2016, to replace older coaches that are now past their useful life and are very expensive to maintain.

The Company is closely monitoring the situation and as part of the orderly shutdown it will complete the NJT coaches already in process.

In addition, the Company has adjusted its master production schedule to bring other customers’ units forward, into production, allowing more time for an acceptable funding resolution in the state of New Jersey to be developed. At this time, the Company has insufficient information to determine if its 2016 annual delivery expectation may drop below the 3,450 EUs for which it had previously provided guidance, but there is that risk.  On July 18, 2016, MCI began its previously scheduled three week summer shutdown and during this period there are no production line entries.

Management maintains its guidance that the core aftermarket business (excluding CTA mid-life overhaul revenue) is expected to grow by approximately 5% in Fiscal 2016.

Conference Call

A conference call for analysts and interested listeners will be held on Thursday August 11, 2016 at 8:00 a.m. (ET). The call-in number for listeners is 888-231-8191, 647-427-7450 or 403-451-9838. A live audio feed of the call will also be available at:


A replay of the call will be available from 11:00 a.m. (ET) on August 11, 2016 until 11:59 p.m. (ET) on August 18, 2016. To access the replay, call 855-859-2056 or 416-849-0833 and then enter pass code number 50533762. The replay will also be available on New Flyer’s web site at www.www.newflyer.com.

Non-IFRS Measures

“Earnings from Operations” refer to earnings before interest, income taxes and unrealized foreign exchange losses or gains on non-current monetary items. “Adjusted EBITDA” consists of earnings before interest, income taxes, depreciation, amortization and other non-cash charges and certain other non-recurring charges as set out in the MD&A. “Free Cash Flow” means net cash generated by operating activities adjusted for changes in non-cash working capital items, interest paid, interest expense, income taxes paid, current income tax expense, effect of foreign currency rate on cash, past service costs, defined benefit funding, non-recurring transitional costs relating to business acquisitions, costs associated with assessing strategic and corporate initiatives, product rationalization costs, defined benefit expense, cash capital expenditures, realized investment tax credits, fair value adjustment to MCI’s inventory and deferred revenue,  proportion of the total return swap realized and principal payments on capital leases.  Management believes Earnings from Operations, Adjusted EBITDA and Free Cash Flow are useful measures in evaluating the performance of the Company. However, Earnings from Operations, Adjusted EBITDA and Free Cash Flow are not recognized earnings measures and do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS”) and may not be comparable to similarly titled measures used by other issuers. Readers are cautioned that Earnings from Operations and Adjusted EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with IFRS as an indicator of the Company’s performance, and Free Cash Flow should not be construed as an alternative to cash flows from operating, investing and financing activities determined in accordance with IFRS, as a measure of liquidity and cash flows. A reconciliation of Adjusted EBITDA and Free Cash Flow to net earnings and cash flow from operations, respectively, is provided in the MD&A.

About the Company

The Company is the largest transit bus and motor coach manufacturer and parts distributor in North America with fabrication, manufacturing, distribution and service centers in Canada and the United States and employs approximately 5,000 team members.

Through its Canadian and U.S. subsidiaries, NFI ULC and NFAI, the Company is North America’s heavy-duty transit bus leader and offers a high quality transit bus product line (Xcelsior® and MiDi® models), incorporating the broadest range of drive systems available, including: clean diesel, natural gas, diesel-electric hybrid, electric-trolley and now battery-electric.  New Flyer actively supports over 42,000 heavy-duty transit buses (New Flyer, NABI and Orion) currently in service.

Through its Canadian and U.S. subsidiaries, Motor Coach Industries Limited and Motor Coach Industries, Inc., the Company is the leader in motor coaches in Canada and the U.S., MCI offers a J-model which is the industry’s best-selling intercity coach for 11 consecutive years, and the D-model, the industry’s best-selling coach line in North American motor coach history.  MCI is also the exclusive distributor of the Setra S417 and S407 in the United States and Canada.  MCI actively supports over 28,000 MCI motor coaches currently in service and offers 24-hour roadside assistance 365 days a year.

The Company also operates North America’s most comprehensive aftermarket parts organization providing support for all types of transit buses and motor coaches.  All New Flyer’s transit buses and MCI’s coaches are supported by an industry-leading comprehensive warranty, service and support network.

The common shares and convertible unsecured subordinated debentures of the Company are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, respectively.

Forward-Looking Statements

Certain statements in this press release are “forward‑looking statements”, which reflect the expectations of management regarding the Company’s future growth, results of operations, performance and business prospects and opportunities. The words “believes”, “anticipates”, “plans”, “expects”, “intends”, “projects”, “forecasts”, “estimates” and similar expressions are intended to identify forward‑looking statements. These forward‑looking statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Such differences may be caused by factors which include, but are not limited to, availability of funding to the Company’s customers to purchase transit buses and coaches and to exercise options and to purchase parts or services at current levels or at all, aggressive competition and reduced pricing in the industry, material losses and costs may be incurred as a result of product warranty issues and product liability claims, changes in Canadian or United States tax legislation, the absence of fixed term customer contracts and the suspension or the termination of contracts by customers for convenience, the current U.S federal “Buy-America” legislation, certain states’ U.S. content bidding preferences and certain Canadian content purchasing policies may change and/or become more onerous, production delays may result in liquidated damages under the Company’s contracts with its customers, the Company’s ability to execute its planned production targets as required for current business and operational needs, currency fluctuations could adversely affect the Company’s financial results or competitive position in the industry, the Company may not be able to maintain performance bonds or letters of credit required by its existing contracts or obtain performance bonds and letters of credit required for new contracts, third party debt service obligations may have important consequences to the Company, the covenants contained in the Company’s senior credit facility and the indenture governing its Debentures could impact the ability of the Company to fund dividends and take certain other actions, interest rates could change substantially and materially impact the Company’s profitability, the dependence on limited sources of supply, the timely supply of materials from suppliers, the possibility of fluctuations in the market prices of the pension plan investments and discount rates used in the actuarial calculations will impact pension expense and funding requirements, the Company’s profitability and performance can be adversely affected by increases in raw material and component costs, the availability of labour could have an impact on production levels, new products must be tested and proven in operating conditions and there may be limited demand for such new products from customers, the ability of the Company to successfully execute strategic plans and maintain profitability, risks related to acquisitions, joint ventures, and other strategic relationships with third parties and the ability to successfully integrate acquired businesses and assets into the Company’s existing business and to generate accretive effects to income and cash flow as a result of integrating these acquired businesses and assets. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in its press releases and materials filed with the Canadian securities regulatory authorities and available on SEDAR at www.sedar.com.

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. These forward‑looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws.

For further information:

Jon Koffman
Investor Relations
Tel: (204) 224-6672
E-mail: [email protected]