More report of Cameron Doerksen NBCQ1 results ahead of expectations Total revenue was $524 million versus NBF at $525 million and consensus of $517 million, with bus deliveries coming in at 792 units versus our 775 forecast. The adjusted EBITDA was a positive $7.4 million versus NBF at a loss of $19 million and the consensus for a loss of $9 million. Supply chain improving NFI noted that the number of suppliers in the high-risk/severe impact category stood at seven at the end of April, down from 24 at the end of December. Moderate risk suppliers were also down to 54 at the end of April versus 75 at the end of December. The company's WIP, however, was still impacted by supply chain challenges in Q1, increasing $95 million compared to Q4, but this should be worked down in H2/23. Demand strong, backlog at record levels Backlog at the end of Q1 stood at 10,071 firm orders and options worth a record $6.7 billion (versus 9,186 EUs worth $5.6 billion at the end of Q4). Notably, the average price of an EU in backlog increased ~20% compared to Q1/22. Total active bids (submitted or in process) increased 99% y/y to 11,066 EUs while the active bid universe was up 18% y/y. Raised to Outperform We are raising our rating on NFI Group shares to Outperform from Sector Perform. Although uncertainty remains around the company’s credit facility negotiations and whether there will be a requirement for additional equity, we believe much of this risk is already reflected in the stock. In the meantime, the Q1 report had numerous positives (supply chain improvements, ongoing strong demand) that we believe will support a higher share price once the new credit agreements are in place. Our C$13.00 target is unchanged.