New Flyer Announces Solid Results for the Second Quarter of 2008 Fiscal Year
2008-08-06 Source：english.chinabuses.com
New Flyer Industries Inc. (TSX:NFI.UN), the leading manufacturer of heavy-duty transit buses in Canada and the United States, today announced its results for the 13-week period ("2008 Q2") and for the 26-week period ("2008 YTD") ended June 29, 2008.
Full financial statements and Management's Discussion and Analysis (the "MD&A") are available at the Company's web site at: www.newflyer.com/index/financialreport. References in this press release to "New Flyer" or the "Company" are to New Flyer Holdings, Inc. ("NFL Holdings") and its consolidated subsidiaries immediately prior to, and to New Flyer Industries Inc. ("NFI") and its consolidated subsidiaries immediately following, the consummation of the transactions described in note 1 of the consolidated annual financial statements of NFI for the period ended December 30, 2007 under "July 12, 2007 transaction". All amounts are referred to in U.S. dollars unless otherwise noted. Increased bus production and delivery levels in response to the Company's growing bus order backlog and continued robust growth in aftermarket operations resulted in consolidated revenue for 2008 Q2 of $260.4 million, which represents an increase of 13.4% compared to consolidated revenue for the second quarter of 2007 ("2007 Q2") of $229.7 million. Bus manufacturing revenue in 2008 Q2 of $234.8 million increased by 12.5% compared to bus manufacturing revenue of $208.7 million in 2007 Q2. Total bus deliveries in 2008 Q2 were 586 equivalent units, which represents a volume increase of 10.4% compared to 2007 Q2 deliveries of 531 equivalent units. 2008 Q2 aftermarket operations revenue of $25.6 million increased by 22.3% compared to $20.9 million in 2007 Q2. The continued strong growth in aftermarket operations is a result of increase in market share as New Flyer buses continue to represent a larger share of the active installed fleet in the combined United States and Canadian market.
Consolidated Adjusted EBITDA for 2008 Q2 totaled $25.9 million compared to $24.9 million in 2007 Q2, which represents an increase of 3.8%. This increase in consolidated Adjusted EBITDA is a result of continued revenue and profit growth in aftermarket operations. 2008 Q2 bus manufacturing operations Adjusted EBITDA of $21.0 million decreased by 3.3% compared to bus manufacturing operations Adjusted EBITDA of $21.7 million in 2007 Q2 as a result of lower margins related to product sales mix. On a quarterly basis, Adjusted EBITDA from bus manufacturing operations per equivalent unit can be volatile due to sales mix. Increased production levels and deliveries resulted in a 12.2% quarterly reduction of equivalent units in work in process, however, lower production efficiencies were realized related to this reduction in work in process. The Company incurred an additional non-recurring $0.7 million charge as a result of a revision to a warranty estimate which relates to past deliveries of a product unique to one specific customer. 2008 Q2 aftermarket operations Adjusted EBITDA of $5.1 million (19.9% of revenue) increased by 19.0% compared to $4.3 million (20.4% of revenue) in 2007 Q2.
During 2008 Q2, a new distribution center in Kentucky was successfully opened to provide further growth opportunities. While this operation did not have any substantial sales in 2008 Q2, $0.3 million of start-up costs were incurred during the quarter which has negatively impacted Adjusted EBITDA margins in aftermarket operations. The Company reported a net loss of $10.7 million in 2008 Q2 compared to a net loss of $85.0 million in 2007 Q2. With consolidated Adjusted EBITDA of $25.9 million in 2008 Q2 compared to $24.9 million in 2007 Q2, the decrease in net losses is a result of lower non-cash charges offset by interest costs. In
2008 Q2, non-cash charges totaled $18.6 million compared to non-cash charges included in 2007 Q2 earnings of $87.5 million. This change in non-cash items included in earnings related to fair value adjustments to assets and liabilities, unrealized foreign exchange gains, and amortization. The Company generated Distributable Cash of C$18.0 million during 2008 Q2 and declared distributions of C$13.6 million, which represents a 2008 Q2 payout ratio of 75.7%. During 2008 YTD, New Flyer generated Distributable Cash of C$37.3 million and declared distributions of C$26.8 million, representing a payout ratio of 71.8%. As a result, over the twelve month period ended June 29, 2008, the Company has recorded excess Distributable Cash of C$15.6 million representing a payout ratio of 77.2% The Company's positive cash flow from operations has resulted in a net cash inflow of $9.2 million during 2008 Q2. As a result, the Company's liquidity position as at June 29, 2008 totaled $69.6 million comprised of cash balances of $29.6 million and a $40.0 million revolving credit facility, which was undrawn as at June 29, 2008. In comparison, the Company's liquidity position as at December 30, 2007 was $65.3 million.
The total order backlog (including firm orders and options) of approximately $3.3 billion (representing 7,960 equivalent units) as at June 29, 2008 increased by 17.7% compared to the total order backlog of approximately $2.8 billion (representing 6,916 equivalent units) as at December 30, 2007. Based on the significant increase in order activity in 2006 and 2007, and the current robust bid activity in the U.S. heavy-duty transit bus market, management believes that the market demand will remain strong for the remainder of 2008 and into 2009 and that the Company's solid product positioning will continue to grow market share. As a result of new order activity and deliveries during 2008 Q2, the firm order backlog as of June 29, 2008 is $1.2 billion, which represents 37.1% of the total backlog. The firm order backlog, which represents 2,754 equivalent units of production, provides the Company with the order visibility to efficiently plan production and supports the current and planned increases to production levels slated for the second half of 2008 and first half of 2009.
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