• New Flyer to rationalize to a common Xcelsior® platform for all heavy-duty and BRT transit buses;
• Allows for enhanced New Flyer lifecycle service, parts and customer support programs;
• Production of NABI LFW and BRT models to be phased out, with the Anniston, Alabama facility transitioning to Xcelsior in the second half of 2015;
• Aggressively promoting MiDi®, New Flyer’s medium-sized, low-floor bus, now in production in St Cloud, Minnesota;
• Enables transition to common information technology infrastructure and provides opportunities for cost reduction and avoidance and sourcing synergies to enhance New Flyer’s overall competitiveness.
New Flyer Industries Inc. (“New Flyer” or the “Company”), the leading manufacturer of heavy-duty transit buses in Canada and the United States, announced today plans to focus on a single heavy-duty transit and BRT bus platform that features its world-class Xcelsior.
Xcelsior is the latest generation of New Flyer’s low-floor vehicle platform that revolutionized North American transit in the early 1990s. Xcelsior comes with a variety of propulsion options including clean diesel, natural gas, diesel-electric hybrid, electric-trolley, and now, zero emission battery-electric. Similar to New Flyer’s previous bus models, Xcelsior is customized and configured to meet each customer’s unique specifications. New Flyer plans to further enhance its BRT styling options for the Xcelsior platform by building on NABI’s extensive BRT experience and New Flyer’s customer input.
“New Flyer has made significant investments to make Xcelsior a world-class product. Our focus on a single heavy-duty bus platform enhances our ability to innovate, optimize our supply chain, improve product quality and enhance our competiveness,” said Paul Soubry, New Flyer’s President and Chief Executive Officer. “We will transition production at NABI in Anniston, AL from the LFW and BRT to Xcelsior, which enables us to avoid redundant product upgrade costs and duplicate support infrastructure and demonstrates our continued investment in New Flyer’s future.”
Through the transition, New Flyer expects to:
• Improve its competiveness in the U.S. and Canadian markets by leveraging its combined bus volume, production, and purchasing for greater efficiencies,
• Streamline design, sourcing, standardization, and overhead for better product control (such as eliminating redundancy and future costs in designing products, including refreshing bus and propulsion platforms, testing and engineering), and
• Make product enhancements and optimize aftermarket support to better serve customer needs.
“New Flyer acquired North American Bus Industries, Inc. in June 2013 to broaden our market position, to improve our technology leadership and to expand our aftermarket parts business, while providing public transit operators with long-term stability and excellence in product support. Today’s announced plan is the natural evolution and optimization of product lines at New Flyer and NABI,” Soubry explained.
New Flyer expects to deliver orders as previously committed and to provide support for NABI customers of the LFW and BRT products for as long as those buses are in service. A number of NABI customers have already indicated an interest in transitioning to Xcelsior. The Company believes customers will benefit from the enhancements that result from its focus on a single heavy-duty platform.
“With the transition of the Anniston facility, we will manage the potential people impact over the coming months through redeployment, retirements and job attrition, where possible,” Soubry said. “We truly appreciate our employees’ dedication, hard work and ongoing efforts at New Flyer and NABI and for their focused commitment to our customers each and every day.”
During this transition period, management expects to invest approximately $20 million in direct operating costs and capital expenditures to complete the transition, utilizing operating cash flow and current credit facilities. Management anticipates these direct operating and capital expenditures will be paid back through captured cost reductions and synergies within approximately two to three years. Management expects to maintain the Company’s dividend policy.
Unless otherwise indicated all monetary amounts in this news release are expressed in U.S. dollars.
About New Flyer
New Flyer (newflyer.com) is the leading manufacturer of heavy-duty transit buses in the United States and Canada. The Company is the industry technology leader and offers the broadest product line of transit buses including drive systems powered by: clean diesel, natural gas, diesel-electric hybrid, electric trolley and now battery electric. All buses are supported by an industry-leading comprehensive warranty and support program, and service network. New Flyer also operates the industry's most sophisticated aftermarket parts organization, sourcing parts from hundreds of different suppliers and providing support for all types of transit buses.
The New Flyer group of companies employs over 3,000 team members with manufacturing, fabrication, parts distribution and service centers in both Canada and the United States.
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.
Xcelsior is a superior heavy-duty transit bus that delivers life-cycle savings and improves the transit experience for passengers and drivers. Xcelsior combines improved fuel economy, lighter weight, disc brakes and the industry’s first LED headlights with New Flyer’s legendary product reliability and industry-leading comprehensive aftermarket parts and services. Xcelsior provides transit operators the “Best Bus Value and Support for Life.”
MiDi is a low-floor bus ideal for use in medium-duty transit, community shuttle services and for connecting passengers to high-frequency transit routes. Its purpose-built, weight-optimized steel chassis and aluminum body structure provide a durable and fuel-efficient bus. Designed by Alexander Dennis, MiDi is manufactured in North America by the Company using primarily North American components and has been tested to the industry’s demanding transit bus standards.
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 financial 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, the ability to complete the product transition successfully, on budget and on schedule, 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, new products must be tested and proven in operating conditions and there may be no demand for such new products from customers, the Company’s ability to execute its planned production targets as required for current business and operational needs and the ability of the Company to successfully execute strategic plans and increase or maintain profitability. 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 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.