New Flyer Announces Third Quarter 2017 Orders and Backlog

New Flyer deliveries in the third quarter were up from last year, but down slightly from the previous quarter.

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New Flyer Industries Inc., the largest transit bus and motor coach manufacturer and parts distributor in North America, announces its order activity and backlog update for the 13-week period ended October 1, 2017 (Q3 2017). 

The order and delivery activity and backlog for Q3 2017 reported in this release includes activity for heavy-duty transit buses manufactured by the company’s subsidiaries, New Flyer Industries Canada ULC and New Flyer of America Inc. (together, New Flyer), and motor coaches manufactured by its subsidiaries, Motor Coach Industries Limited and Motor Coach Industries, Inc. (together, MCI).

The order and delivery activity and backlog as reported excludes pre-owned motor coaches. Year-over-year comparisons reported in this release, compare Q3 2017 to the period ended October 2, 2016 (Q3 2016).

Deliveries, Order Activity, and Option Expiry

The company delivered 877 equivalent units (EUs) in Q3 2017, an increase of 100 EUs compared to Q3 2016 and a decrease of 114 EUs over the second fiscal quarter of 2017 (Q2 2017). Total bus and coach inventory at October 1, 2017 was 566 EUs, an increase of 32 EUs from the previous quarter.

The company’s new transit bus and coach orders (firm and options) in Q3 2017 totaled 1,634 EUs. Order activity in the period included:

  • New firm orders for 536 EUs (valued at $276.2 million)
  • New option orders for 1,098 EUs (valued at $518.1 million)
  • 559 EUs of Options were converted to firm orders (valued at $406.8 million)

The company’s last 12 months (LTM) Book-to-Bill ratio (defined as new firm and option orders divided by deliveries) was 128% and has been greater than 100% for 18 of the last 19 quarters, demonstrating overall growth in the company’s total backlog. 

In addition, 1,969 EUs of new firm and option orders were pending from customers at the end of the period, where approval of the award to the company had been made 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. 

The majority of public transit contracts have a term of five years. The table below shows the number of option EUs that have either expired or been exercised annually over the past 5 years, as well as the current backlog of options that will expire each year if not exercised. 

Total Backlog and 2017 Production

At the end of Q3 2017, the company’s total backlog was 10,537 EUs (valued at $5.39 billion) compared to 9,901 EUs (valued at $5.04 billion) at the end Q2 2017, and 9,808 EUs (valued at $5.08 billion) at the end of Q3 2016. 

The company’s backlog consists of transit buses, and motor coaches primarily for public customers. Buses incorporating clean propulsion systems (such as natural gas, diesel-electric hybrid, electric-trolley, and battery-electric) represent approximately 43% of the total backlog. Zero-emission buses (battery-electric, fuel-cell and electric-trolley) represent approximately 3% of total backlog. 

The company’s master production schedule combined with current backlog and orders anticipated to be awarded by customers under new procurements is expected to enable the company to deliver approximately 3,800 EUs in fiscal 2017. Production rates vary from quarter to quarter due to product mix and award timing.

Market Demand

The company’s Bid Universe metric reports active public sector competitions in Canada and the United States, and provides an overall indicator of active bid activity and expected heavy-duty transit bus and motor coach market demand. It is a point-in-time snapshot of: (i) EUs in active competitions, defined as all requests for proposals received and in process of review plus bids submitted and awaiting customer action, and (ii) management’s forecast based on public customer projection of expected EUs to be placed out for competition over the next 5 years.

Procurement of transit buses and motor coaches by the public sector is typically accomplished through formal multi-year contracts, while procurement by the private sector is typically through transactional sales. As a result, the Company does not publish a Bid Universe metric for private sector buses and motor coaches.

Management continues to expect that transit bus and motor coach procurement activity by public transit agencies throughout the U.S. and Canada should remain robust based on an aging fleet, improved overall economic conditions, expected customer fleet replacement plans and active or anticipated procurements. Management also expects stable private sector demand for motor coaches through 2017 given healthy market dynamics including the economy, travel trends and credit markets.


Total shipments by the company’s aftermarket business for Q3 2017 decreased by 6.6% compared to the previous quarter, and decreased by 4.9% compared to Q2 2016.

New gross orders received in Q3 2017 decreased by 1.6% compared to the previous quarter, while increasing by 2.3% compared to Q3 2016.

Surveys and interviews with a number of large customers indicate a combination of parts orders and sales effects ranging from: inventory reduction objectives, budgetary constraints and fleet modernization impacts.