NFI Group Inc T.NFI

Alternate Symbol(s): NFYEF | T.NFI.DB

Industrials

NFI Group Inc. is a Canada-based independent global bus manufacturer. The Company provides a suite of mass transportation solutions under brands: New Flyer (heavy-duty transit buses), Alexander Dennis (AD) (single and double-deck buses), Plaxton (motor coaches), MCI (motor coaches), ARBOC (low-floor cutaway and medium-duty buses) and NFI Parts (aftermarket parts sales). It operates through two segments: Manufacturing Operations and Aftermarket Operations. The Manufacturing Operations segment manufactures, services and supports transit buses, coaches, medium-duty, and cutaway buses. The Aftermarket Operations segment is engaged in the sale of aftermarket parts for transit buses, coaches and medium- duty/cutaway buses, both for the Company's and third-party products. Its product type includes Heavy-duty transit buses, Single deck buses, Double-deck buses, Articulated buses, motor coaches, low floor cutaway, and medium-duty buses.

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NFI Group Inc

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Post by retiredcfon May 06, 2021 11:42am

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Post# 33140903

TD

NFI Group Inc.

(NFI-T) C$27.59

Q1/21 First Look: Solid Quarter; Industry Green Shoots Emerging Event

NFI reported Q1/21 Adj. EBITDA of $54.8mm (incl. $21.8mm of CEWS and U.K. furlough grants), 41% above TD/consensus at $39.0mm/$37.6mm reflecting better-than-expected margins of 9.5% (TD: 7.2%).
2021 full-year Adj. EBITDA guidance maintained ($220-$240mm).

Impact: MIXED

Q1 saw improved financial results and we were encouraged to see the pick up in new orders/active bids, with the backlog ticking higher for the first time in five quarters. Management indicated that its seeing increasing bidding activity and expects a gradual recovery across 2021, particularly with many new transit funding initiatives now approved (granted, it will still take time to work through the system). Q1 did include sizable government support. However, management noted that had it not been accessible, options existed to lower costs. Furthermore, it reiterated that its full-year guidance only includes modest contribution from government support and it's not a requirement to achieve guidance. On the negative side, the quarter did include a large working capital investment and negative tax revision.

Consolidated Q1/21 revenue of $574.1mm was above TD's $543.6mm. NFI delivered 955 new buses in Q1/21 (TD: 931). Aftermarket revenues rose modestly and were up 10.8% q/q.
Consolidated margins: 9.5%, above TD's 7.2% reflecting the benefits of higher- than-expected government subsidies. Manufacturing margins 7.8% (TD: 5.2%), aftermarket margins: 19.6% (TD: 17.1%).
FCF (pre-w/c) of $13.8mm (-$100.41mm after w/c), above TD's $11.2mm estimate.
Balance sheet: Q1/21 net debt decreased slightly to $986mm (excl. IFRS 16) from $1,070mm as at Q4/20 reflecting the net impact of $114mm of negative working capital offset by the C$250mm equity raise. Leverage: 4.52x (ND/ EBITDA), $319mm of total available liquidity.
Management noted that its 2021 ETR would be >31% reflecting a fixed payment of $18-22mm plus 21-23% variable rate (implies ~60% rate on TD estimates).
Backlog: +1% q/q to 8,586 orders ($4.4bln) driven by increased order activity in the UK, Europe, and North America. New Q1 orders: 1,212, plus 474 additional sales pending formal documentation. Management's total bid universe held relatively stable q/q at 23,387 EUs. ZEBs represent 18.2% of the existing backlog (up from 5.8% Q4/20) and are projected to represent 20-25% of 2021 production.