New Flyer First Quarter Revenue Increases 8.2%

New Flyer's first fiscal quarter revenue increased 8.2%, resulting primarily from a 7.6% increase in total new transit bus and coach deliveries.

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    New Flyer Industries Inc., the largest transit bus and motor coach manufacturer and parts distributor in North America, announces its results for the 13-week period ended April 2, 2017 (2017 Q1). Unless otherwise indicated, all monetary amounts in this press release are expressed in U.S. dollars.

      2017 First Quarter Financial Results

        Year-over-year comparisons reported in the MD&A compare the13-week period in 2017 Q1 to the 14- week period ended April 3, 2016 (2016 Q1). 2016 Q1 was the first full fiscal quarter that included both New Flyer and MCI financial performance. As a result of the organizational changes effective January 2, 2017, the service function, which was previously managed as part of the aftermarket operations, is now the responsibility of the transit bus and coach manufacturing operations. To improve the comparability, the related prior year segment information has been restated to reflect these changes.

        Revenue from transit bus and coach manufacturing operations for 2017 Q1 increased by 8.2% compared to 2016 Q1. The increase in 2017 Q1 revenue primarily resulted from a 7.6% increase in total new transit bus and coach deliveries compared to 2016 Q1 deliveries and a 0.5% increase in average selling price per EU in 2017 Q1 compared to 2016 Q1.

        Revenue from aftermarket operations in 2017 Q1 decreased by 9.2% compared to 2016 Q1. The decrease in aftermarket operations revenue in 2017 Q1 is primarily a result of an extra week in 2016 Q1 as compared to 2017 Q1. As well, 2016 Q1 sales volume was exceptionally high due to timing of some large customer programs.

        Consolidated Adjusted EBITDA for 2017 Q1 increased by 4.7% compared to 2016 Q1. Transit bus and coach manufacturing Adjusted EBITDA increased primarily as a result of increased deliveries and improved margins. Contributors to the increase in margin in the period is a favourable sales mix, cost savings synergies relating to the MCI acquisition, continued cost reductions achieved through the company's operational excellence initiatives and the full impact from the New Flyer and NABI product rationalization.

        Profit margins can vary significantly between orders due to factors such as pricing, order size, propulsion system and 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 2017 Q1 aftermarket operations Adjusted EBITDA decreased 3.7% compared to 2016 Q1 as a result of one less week of operations during 2017 Q1. However, the Adjusted EBITDA as a percentage of aftermarket revenue during 2017 Q1 increased 1.2% when compared to 2016 Q1.

        Net earnings during 2017 Q1 increased by 67.8% compared to 2016 Q1, primarily as a result of improved Earnings from Operations and reduced interest expense offset by the increase in income tax expense. This resulted in net earnings per share in 2017 Q1 of $0.61 which represents an increase of 52.5% compared to $0.40 per Share generated during 2016 Q1.


        The company's 2017 Q1 Free Cash Flow decreased by 12.7% compared to 2016 Q1 primarily as a result of the increased cash capital expenditures and timing of current income tax expense when comparing the two periods. The amount of dividends declared increased in 2017 Q1 as a result of the previous increase in the annual dividend rate from C$0.70 to C$0.95 per share effective for dividends declared after May 12, 2016 and additional shares issued as a result of the conversion of Debentures.

        The April 2, 2017 liquidity position of $340.2 million is comprised of available cash of $26.0 million and $314.2 million available under the revolving portion of the company’s credit facility (Revolver) as compared to a liquidity position of $268.1 million at January 1, 2017. The increased liquidity relates to improved cash flow from operations. As at April 2, 2017, there were $18.0 million of direct borrowings and $10.8 million of outstanding letters of credit related to the $343.0 million Revolver. Management believes that these funds, together with share 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 provide funds for its financing requirements, capital expenditures, dividend payments and other operational needs for the foreseeable future.

        PPE cash expenditures in 2017 Q1 have increased by 120.7% compared to 2016 Q1 primarily as a result of investments in facilities as a result of insourcing activities and continuous improvement programs.

        Management believes that return on invested capital (ROIC) is an important ratio and tool that can be used to assess possible investments against their related earnings and capital utilization. The ROIC during 2017 Q1 LTM was 14.5% as compared to 13.0% during 2016 Q1 LTM.


        The company’s annual operating plan for the 52-weeks ended December 31, 2017 (Fiscal 2017) is focused on maintaining and growing its leading market position in the heavy-duty transit bus and motor coach markets, and aftermarket parts distribution through enhanced competitiveness.

        The company now expects to deliver approximately 3,750 EUs of new transit buses and motor coaches during Fiscal 2017, an increase of 6.8% from Fiscal 2016 based on a solid production schedule for Fiscal 2017, healthy order backlog and bid universe and management's belief that the transit bus and motor coach procurement activity by public transit agencies throughout the U.S. and Canada should remain robust.

        Based on the improvement in both earnings and cash flow, the board of directors of the company has decided to increase the annual dividend rate to C$1.30 per share, which represents an increase of 36.8% from the previously announced annual dividend rate of C$0.95 per share. The new annual dividend rate of C$1.30 per share is effective for dividends declared after May 10, 2017, although such distributions are not assured.