New Flyer Annual General Meeting (NFI, NFI.UN) Toronto May 10, 2012

Transcription

1 New Flyer Annual General Meeting (NFI, NFI.UN) Toronto May 10, 2012

2 2 Forward Looking Statements: Our remarks and answers to your questions today may contain forward-looking statements relating to New Flyer Industries Inc. and related companies or to the environment in which they operate, which are based on their operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond New Flyer s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in New Flyer s Annual Information Form. New Flyer assumes no obligation to update or revise any forward-looking statements to reflect new events or circumstances, except as required by applicable securities laws. All figures discussed today are in U.S. dollars unless otherwise noted. 2

3 A Proud History and a Bright Future Delivering Transit Buses for Over 80 Years 3 Founded and Headquartered in Winnipeg. Over 30,000 buses delivered. Bus manufacturing plants in Manitoba and Minnesota. Fabrication plant in Elkhart, IN Parts distribution centers in Manitoba, Ontario, Kentucky and California Service Center (Ontario) New Product Development Center (Winnipeg) The #1 Heavy Duty Transit Bus Manufacturer in Canada and the US Market share and innovation leader on both Transit Bus and Spare Parts Bus lengths range from 35, 40, to 60 articulating buses Diverse propulsion options: Clean Diesel, Electric Hybrid, Electric Trolley, CNG, LNG and Hydrogen Fuel Cells. Development of all-electric bus underway Buy America and Canadian content compliant Focused on being an Employer of Choice Over 2,200 employees Renewed labor contracts: CAW (MB) and CWA (MN)

4 4 North America s #1 Heavy Duty Bus Manufacturer 1% 9% 16% 35% 9% 30% Apr 25-12: Daimler announces Orion will close. Not accepting new orders. Source: New Flyer Database & Management Estimates

5 5 And North America s #1 Bus Parts Distributor 16% 9% 4% 9% 5% Source: New Flyer Database & Management Estimates

6 6 New Flyer Financial Performance (US$) Sales Adj EBITDA Parts Bus

7 Debt / Adjusted EBITDA 7 New Flyer is in Compliance with all Covenants Leverage Ratios (Debt to Adjusted EBITDA) Fixed Charge Coverage (Adjusted EBITDA less Capex and current taxes over debt service) 6.0 Covenant reset at Credit Renewals Q Q1 Senior Leverage Total Leverage Fixed Charge Coverage Dividend Suspension Senior Leverage Covenant Total Leverage Covenant Interest Deferral Fixed charge covenant Current New Flyer Debt Structure: IDS Debt ($C) $ 31M Bachelor Bonds ($C) $ 28M Term Loan ($US) $111M Revolver ($US) $ 7M $177M

8 US Fed Funds (US$ billions) 8 HD Transit Bus deliveries in NA dropped in 2011 to 5,150 $14 TEA 21 SAFETEA-LU Extension to SAFETEA-LU Cdn/US Bus Deliveries 7,000 $12 6,000 $10 $8 $6 $4 $2 Total Industry EU s Delivered 5,000 4,000 3,000 2,000 1,000 Deliveries (Equivalent Units) $ Source: US Federal filings, New Flyer management estimates

9 Some Positive Indicators & Transit Market Fundamentals 9

10 New Flyer Bid Universe (or new potential Pipeline) Now at an all-time high of 16,151 EU s Forecasted RFP s 10 Bids Submitted Bids in Progress US Federal Funding for US transit agencies continues with uncertainty. On Jun the latest interim extension to the transportation bill expires (which originally expired 2009). Initiative currently before Congress would further extend the last funding bill through Sep-12.

11 11 New Flyer Backlog totals 6,678 EU s (or $2.8B) Backlog has proved crucial in period of low industry orders Deferred Order Options Option Deferred Order Firm Firm

12 Production Plan has a LE s remaining at 36 EU s/wk CAW Strike Order Deferral Capacity Ramp Up Ottawa Order 22 NFI.UN IPO

13 13 Significant improvements in Operations continue Focused management for cultural and physical change Annual LEAN Assessment

14 14 As a result of OpEx, the # of buses in WIP has reduced

15 15 We continue with prudent Capex investments Providing operational flexibility & EBITDA enhancement Weld Kitting Target Cash Payback = 1.4 yrs BENCH MECH LINE WELD BENCH WELD Material Staging SOUTH LINE 2266 SQFT 855 SQFT Punch Machines and Shear NEW EQUIPMENT Small Parts Paint Upgrade Target Cash Payback = 1.4 yrs Potential In-Sourcing (approx. 6,000sft) 890 Booth Removed Double Line through Paint to Final Release Single Line/Single Shift Target Cash Payback = 1.8 yrs

16 Transit Private 16 New Flyer Strategy: a Full-Service Bus Manufacturer OEM & Parts Services Canada/US International Diversification & Growth Expand product offering beyond HD Transit Compete in more than one market Full scope offering: Bus, Parts & Services Increase % of aftermarket Investment/Acquisition Criteria Current/Potential leading market position Opportunity for cost synergy based on scale (OpEx, Purchasing and Overhead) plus ability to leverage R&D, technology and platforms Vertical integration potential for key or strategic value-added operations Seek to compete with the global bus players but be more nimble and responsive

17 17 We are successfully migrating to the next generation Bus 572 Xcelsior buses delivered to December % New Flyer EU s built in 2011 First delivery of production 60 Xcelsior occurred in Q2-12

18 18 Developing an all-electric Bus Prototype on target ebus Maiden Voyage: Friday, Apr. 20, 1:05 pm

19 19 We created a Joint Venture with Alexander Dennis Limited To launch a midi-bus in North America ion 2013 North America s largest Heavy Duty Transit Bus and Parts company The UK s largest Bus & Coach builder and world leader in midi-bus

20 Focus continues to grow our Bus Parts Business Margins under increased pressure since

21 21 Supply Chain Solutions: Putting Parts closer to Customers WESTERN PDC WINNIPEG, MANITOBA Opened 1998 ONTARIO PDC BRAMPTON, ONTARIO Opened 2011 SOUTHWESTERN PDC FRESNO, CALIFORNIA Opened 2009 MIDWEST PDC ERLANGER, KENTUCKY Opened 2008

22 Priorities 1. Recover backlog, increase market share and reduce costs 2. Innovation Launch the 60 ft Xcelsior into production Deliver all-electric accessory buses Launch full electric battery bus prototype Investigate alternate bus engine makers 2013 EPA engine launch and certification MiDi-bus investigation, development and launch 3. Product Optimization Continue migration to Xcelsior platform Product Control initiatives and pre-production process redesign PLM implementation and engineering process optimization 4. Aftermarket Increase aftermarket focus Grow supply solutions for customers (VMI) Launch New Flyer Connect and e-training

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