(TSX: NFI, OTC: NFYEF) NFI Group Inc. (“NFI” or
the “Company”), a leading independent bus and coach manufacturer
and a leader in electric mass mobility solutions, provides an
update on the first full year of “NFI Forward”, the Company’s
transformational cost reduction initiative, which is expected to
lower NFI’s overhead and selling general and administrative
(“SG&A”) expenses by 8% to 10%, respectively, from 2019 levels.
As part of this update, the Company today announced that Alexander
Dennis Inc.’s (“ADI”) North American facilities are being
integrated into NFI’s existing footprint.
Launched in July 2020 in response to the impacts
of the global COVID-19 pandemic, NFI Forward included a number of
major initiatives targeted to drive approximately $65 million in
annual overhead and SG&A expenses by the end of 2023 from 2019
levels, plus an additional $10 million in annualized Free Cash Flow
generation. In January 2021, NFI increased the total expected
SG&A and overhead savings to $67 million and management
continues to expect NFI Forward will deliver these anticipated
results.
Over the past year, the following NFI Forward
activities have been completed:
- the streamlining of administrative
and back-office functions, including Human Resources, Finance and
Treasury, into an integrated shared services model;
- the combination of New Flyer® and
MCI® into one consolidated North American operating business, while
retaining both market-leading transit bus and motor coach
brands;
- the rationalization of ADI’s North
American parts business into the NFI Parts™ business, reducing the
number of North American parts stocking locations from 22 to
7;
- cessation of chassis manufacturing
at Alexander Dennis Limited’s (“ADL”) Guildford facility; and
- the integration of all
Winnipeg-based fiberglass facilities into one facility.
Through these initiatives, NFI Forward has
achieved $28.6 million in cumulative Adjusted EBITDA savings, plus
$1.8 million in additional Free Cash Flow generation, as of March
28, 2021. NFI will provide further information on NFI Forward’s
financial impact with its second quarter 2021 financial results and
accompanying investor conference call on August 4, 2021.
NFI Forward projects currently in process
include:
- formalizing a Company-wide
strategic sourcing program to leverage purchasing scale and
optimize product designs across vehicle models and supply
chains;
- increasing dual production line
capabilities for heavy-duty transit buses and motor coaches within
select New Flyer and MCI facilities;
- expanding insourcing of production
components through NFI’s KMG parts manufacturing facility; and
- launching an acetone recycling
program within NFI’s fiberglass reinforced polymer components
business to reduce waste and emissions.
Earlier this year, NFI conducted a thorough
review of all of the Company’s Canadian and U.S. manufacturing
locations and today announces the integration of the ADI North
American manufacturing locations into NFI’s existing facilities. As
a result, the Company will close the ADI North American
manufacturing locations, including the facilities in Vaughan,
Ontario (to close in October 2021); and Nappanee and Peru, Indiana
(to close in 2022 Q1). Future manufacturing of ADL double deck
buses in North America will be carried out at existing NFI
manufacturing locations. Certain finance, sales, commercial
operations, procurement and service personnel will remain as part
of NFI’s North American Bus and Coach business to support existing
customers.
“After a thorough review of our North American
manufacturing locations, we have determined that rationalizing our
ADI North American manufacturing locations is the required approach
moving forward. As it is never easy to close locations and impact
individuals’ careers, this important decision was not taken
lightly. This integration, however, continues us on the necessary
path for NFI as we execute our plan of transforming our
organization into a more cost efficient, integrated operating
business,” said Paul Soubry, President and Chief Executive Officer,
NFI.
NFI will continue to offer ADL’s industry
leading double-deck products in North America, including the
world’s best-selling double deck bus, the Enviro500, and the
recently launched battery-electric model the Enviro500 EV
CHARGE.
“North America remains a vitally important
market for ADL, where we have over 1,200 vehicles in service
providing high-capacity, accessible mobility to customers across
all sectors,” said Paul Davies, President and Managing Director,
ADL. “While the pandemic created delays in customer order activity
and disruptions to manufacturing operations, we have begun to see
initial signs of recovery in end market demand. This integration
will allow us to provide an even stronger offering for our Canadian
and U.S. customers in the future. We look forward to continue
selling and delivering the world’s best-selling double deck bus and
rolling out our new Enviro500EV CHARGE to the market.”
About NFI
Leveraging 450 years of combined experience, NFI
is leading the electrification of mass mobility around the world.
With zero-emission buses and coaches, infrastructure, and
technology, NFI meets today’s urban demands for scalable smart
mobility solutions. Together, NFI is enabling more livable cities
through connected, clean, and sustainable transportation.
With 8,000 team members in nine countries, NFI
is a leading global bus manufacturer of mass mobility solutions
under the brands New Flyer® (heavy-duty transit buses), MCI® (motor
coaches), Alexander Dennis Limited (single and double-deck buses),
Plaxton (motor coaches), ARBOC® (low-floor cutaway and medium-duty
buses), and NFI Parts™. NFI currently offers the widest range of
sustainable drive systems available, including zero-emission
electric (trolley, battery, and fuel cell), natural gas, electric
hybrid, and clean diesel. In total, NFI supports its installed base
of over 105,000 buses and coaches around the world. NFI common
shares are traded on the Toronto Stock Exchange under the symbol
NFI. News and information is available at www.nfigroup.com,
www.newflyer.com, www.mcicoach.com, www.arbocsv.com,
www.alexander-dennis.com, and www.nfi.parts.
Appendix – Non-IFRS
Measures
References to “Adjusted EBITDA” are to earnings
before interest, income taxes, depreciation and amortization after
adjusting for the effects of certain non-recurring and/or
non-operations related items that do not reflect the current
ongoing cash operations of the Company. References to “Free
Cash Flow” mean net cash generated by or used in operating
activities adjusted for various items. The adjustments
referred to in these definitions are described in the Company’s
first quarter Management’s Discussion & Analysis available at
www.sedar.com. Management believes that Adjusted EBITDA and
Free Cash Flow are useful measures in evaluating the performance of
the Company. However, Adjusted EBITDA and Free Cash Flow, are not
recognized earnings or cash flow measures under IFRS and do
not have standardized meanings prescribed by IFRS. Readers of this
press release are cautioned that Adjusted EBITDA should not be
construed as an alternative to net earnings or loss or cash flows
from operating activities determined in accordance with IFRS as an
indicator of the Company’s performance, and that 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. The
Company’s method of calculating Adjusted EBITDA and Free Cash Flow
may differ materially from the methods used by other issuers and,
accordingly, may not be comparable to similarly titled measures
used by other issuers.
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, liquidity,
results of operations, performance and business prospects and
opportunities, such as the estimated amount of savings to be
generated and the efficiencies to be produced by the implementation
of management's "transformational initiative" and management's
expectations regarding the recovery of end market demand. The
words "believes", "anticipates", "plans", "expects", "intends",
"projects", "forecasts", "estimates", "may", "will" 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.
Actual results may differ materially and
adversely from management expectations as projected in such
forward-looking statements for a variety of reasons, including, but
not limited to, the Company's ability to successfully execute its
transformational initiative and to generate the planned savings in
the expected time frame or at all; management may have
overestimated the amount of savings that can be generated or may
have underestimated the amount of costs to be expended; the
implementation of the transformational initiative may take longer
than planned to achieve the expected savings; further restructuring
and cost-cutting may be required in order to achieve the objectives
set out in the transformational initiative; the estimated amount of
savings generated under the transformation initiative may not be
sufficient to achieve the planned benefits; combining business
units and/or the reduction of production or parts facilities may
not achieve the efficiencies anticipated by management; and the
impact of the COVID-19 pandemic. There can be no assurance that the
company will be able to achieve the ancticipated financial and
operational benfits, cost savings or other benefits of the
transformation initiative.
The Company is also subject to the other risks
and uncertainties detailed in the disclosure documents filed with
the Canadian securities regulatory authorities and available on
SEDAR at www.sedar.com. These various risks, if they occur,
may materially adversely impact the Company's business, operating
performance and financial condition, including a reduction to the
Company's cashflow, liquidity and its ability to maintain
compliance with covenants under its credit facilities.
The Company cautions that due to the dynamic,
fluid and highly unpredictable nature of the COVID-19 pandemic and
its impact on global and local economies, businesses and
individuals, it is impossible to predict the severity of the impact
on the Company's business, operating performance and financial
condition and ability to generate sufficient cash flow and maintain
adequate liquidity and any material adverse effects could very well
be rapid, unexpected and may continue for an extended and unknown
period of time.
Due to the potential impact of these and other
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.
For media inquiries, please
contact: Jacqueline Anderson+44 7796 715
607jacqueline.anderson@alexander-dennis.com
Lindy Norris P:
320.406.3386 Lindy_Norris@newflyer.com
For investor inquiries, please contact:Stephen
KingP: 204.224.6382Stephen.King@nfigroup.com
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