NFI Group announces its 2024 Q2 financial results

On July 31, 2024, NFI announced its financial results for Q2 2024.

All figures quoted in U.S. dollars unless otherwise noted:

• 2024 Q2 revenue of $851 million; 1,246 equivalent units ("EUs") delivered, up 34% from 2023 Q2, with 284 EUs, or 23% of total deliveries being battery- and fuel cell-electric buses ("ZEBs").
• 2024 Q2 Net earnings of $3 million; Net earnings per Share of $0.02, and Adjusted Net Earnings per Share2 of $0.03. First positive net earnings quarter since 2021 Q2.
• New orders of 1,114 EUs and total ending backlog2 position (both firm and options) of 14,605 EUs (valued at $11.8 billion), ZEBs represent 41% of total backlog2.
• 2024 Q2 Adjusted EBITDA2 of $59 million. Free Cash Flow of $1.1 million and Total Liquidity2 position of $179 million.
• Aftermarket segment delivers record quarterly revenue of $162 million, with $35 million of Adjusted EBITDA2.
• Reconfirm financial guidance for Fiscal 2024 as announced on January 17, 2024, including Adjusted EBITDA2 range of $240 to $280 million; and 2025 Adjusted EBITDA2 target of greater than $350 million.

"The second quarter of 2024 delivered on our expectations with sequential and annual improvements in bus and coach deliveries, higher zero-emission bus deliveries, strong aftermarket performance and an increase in Adjusted EBITDA that contributed to positive net earnings and Free Cash Flow," said Paul Soubry, President and Chief Executive Officer, NFI.

“Manufacturing segment operations continued to see improvement with increases in new vehicle production rates driving margin improvements and improved fixed cost absorption. These improvements were somewhat offset by the delivery of legacy inflation impacted contracts, which have now all been materially completed. The aftermarket segment also saw another period of growth with record quarterly revenue.

“Our supply chain health has improved, although there are still certain areas where a few suppliers are experiencing delivery delays leading to inconsistent parts availability. We anticipate this will continue throughout 2024 as suppliers ramp-up their production to meet our increased demand. In addition, we will be producing more zero-emission buses, which have a more nascent supply base, and working to improve labour efficiency rates as we train new team members.

“Period ending liquidity was stronger than anticipated, supported by positive quarterly Free Cash Flow and our teams focus on working capital management. We continue to advance discussions with customers regarding proposed changes to U.S. contract structures, making efforts to include progress payments and milestone billing structures as standard wherever possible. Subsequent to the quarter, we made amendments to our Export Development Canada performance guarantee program that will support our liquidity and bonding flexibility going forward. We anticipate a decrease in liquidity in the third quarter as we continue to increase production of higher cost buses, but are confident that our current capacity, combined with our efforts to lower working capital investments, leave us well positioned.

"Our first half performance, including our first positive net earnings since the second quarter of 2021, has further strengthened our confidence in our ability to achieve our 2024 guidance and 2025 targets as we realize upon our nearly $12 billion backlog. The second half of 2024 is expected to be a period of significant year-over-year growth as we deliver more vehicles, especially zero-emission buses, and benefit from improved margin performance," Soubry concluded.

Read the full financial report, presentation, and supporting documents: NFI Group

Footnotes:

1. Results noted herein are for the 13-week period ("2024 Q2”) and the 52-week period ("2024 Q2 LTM”) ended June 30, 2024. The comparisons reported in this press release compare 2024 Q2 to the 13-week period ("2023 Q2") and 2024 Q2 LTM to the 53-week period ("2023 Q2 LTM") ended July 2, 2023. Comparisons and comments are also made to the 13-week period (“2024 Q1”) ended December 31, 2023. The term “LTM” is an abbreviation for “Last Twelve Month Period”.
2. Adjusted EBITDA, Adjusted Net Loss, and Free Cash Flow represent non-IFRS measures; Adjusted Net Loss per Share and Return on Invested Capital ("ROIC") are non-IFRS ratios; and Total Liquidity and Backlog are supplementary financial measures. Such measures and ratios are not defined terms under IFRS and do not have standard meanings, so they may not be a reliable way to compare NFI to other companies. Adjusted Net Loss per Share is based on the non-IFRS measure Adjusted Net Loss. ROIC is based on net operating profit after tax and average invested capital, both of which are non-IFRS measures. See “Non-IFRS Measures” and detailed reconciliations of IFRS Measures to non-IFRS Measures in the Appendices of this press release. Readers are advised to review the unaudited interim condensed consolidated financial statements (including notes) (the “Financial Statements”) and the related Management's Discussion and Analysis (the "MD&A").