NFI Announces First Quarter Results

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Record backlog of $13.7 billion and improvements in Revenue, Adjusted EBITDA¹ and ROIC¹; reaffirms 2025 Guidance

WINNIPEG, Manitoba, May 08, 2025 (GLOBE NEWSWIRE) -- (TSX: NFI, OTC: NFYEF, TSX: NFI.DB) NFI Group Inc. ("NFI" or the "Company"), a leader in propulsion-agnostic bus and coach mobility solutions, today announced its unaudited interim condensed consolidated financial results for the first quarter of 2025. All figures quoted in U.S. dollars unless otherwise noted.

First Quarter Highlights

• Deliveries: 1,028 equivalent units ("EUs"), with 33.9% being battery- and fuel cell-electric buses ("ZEBs”)
• Revenue: $841.4 million, an increase of 16.4% year-over-year
• Gross Margin: $94.0 million, an increase of 36.3% from 2024 Q1, with margin percentage of 11.2%
• Net Loss: $6.5 million, an improvement of $2.9 million from 2024 Q1, with Net Loss per Share of $0.05
• Adjusted EBITDA¹: $62.7 million, an increase of 84.4% year-over-year
• Backlog¹: $13.7 billion (6,236 EUs firm and 10,291 EUs options), up 16.6% year-over-year; ZEBs represent 36.5% of total backlog¹ EUs
• ROIC¹: increased to 7.5%, up from 1.8% in 2024 Q1
• Total Liquidity¹: $127.9 million, up $1.1 million from 2024 Q4. In May 2025, entered into a new $845 million credit agreement that further supported liquidity growth in the second quarter of 2025

Key financial metrics for 2025 Q1 are included in the table below:

CEO Comments

"First quarter performance reflects our continued momentum with significant year-over-year growth in financial metrics, record order backlog¹, and the highest zero-emission bus deliveries in Company history,” said Paul Soubry, President and Chief Executive Officer, NFI. "Improvements in quarterly Manufacturing gross margins displayed the improved financial profile of our firm orders and our aftermarket business provided another strong contribution. We were also pleased to add over 2,500 EUs to our total backlog¹ in the quarter, a reflection of the strong demand environment in North American markets.

"While we have seen some improvements in overall seat supply performance, challenges remain. We continue to actively support the supplier's recovery with dedicated onsite resources and have started to receive seat deliveries from an alternative established supplier who is expected to be ramping up production throughout the remainder of the year. In the near-term, seat related headwinds may impact deliveries and inventory balances, but this has not changed our overall outlook for 2025,” Soubry continued. "Market conditions in the UK market remained challenging, impacting our orders and deliveries. In response, we are looking to adjust our operations and reduce costs.”

"We recently achieved a major milestone by entering into a new credit agreement that provides us with greater stability, improved covenants, increased financial flexibility and higher total liquidity. We remain well positioned to adapt to the evolving global trade environment, as our localized manufacturing and aftermarket distribution networks, combined with improved contract structures, lower our total exposure and enable us to respond quickly to changing market dynamics,” Soubry concluded.

Segment Results

Manufacturing

• Manufacturing revenue increased by $126.1 million, or approximately 22.4%, from 2024 Q1, reflecting higher ZEB deliveries, improved pricing on heavy-duty transit and coach deliveries, and higher low-floor cutaway deliveries.
• Manufacturing Net earnings of $7.2 million, increased by $20.6 million year-over-year, driven by favourable sales mix and higher gross margins from heavy-duty transit and coach deliveries, and as 2024 Q1 included legacy inflation impacted contracts.
• Manufacturing Adjusted EBITDA¹ improved by $35.4 million from 2024 Q1. The increase was primarily driven by the same items as net earnings plus the impact of a $10.6 million adjustment to reflect the non-recurring impact of seat disruption and associated production inefficiencies.
• At quarter-end, the Company's total backlog¹ (firm and options) of 16,527 EUs (value of $13.7 billion) increased by 11.8% on an EU basis and 16.6% on a dollar basis, from 2024 Q1.
• NFI added 2,523 EUs of new orders, supporting an LTM Book-to-Bill ratio¹ of 139.3%. The average price of an EU in backlog¹ is now $0.83 million, a 4.8% increase from 2024 Q4, reflecting the ongoing improvements in new order pricing.

Aftermarket

• Aftermarket revenue of $152.6 million, a decrease of 4.6% from 2024 Q1, primarily driven by lower midlife program revenues in North American public markets.
• Aftermarket Net earnings decreased by $6.1 million, or 18.6%, compared to 2024 Q1, driven by sales mix and lower midlife program revenues.
• Aftermarket Adjusted EBITDA¹ decreased by $4.5 million, or 11.9%, impacted by the same items as net earnings.

Consolidated Net Earnings, Adjusted Net Earnings, and Return on Invested Capital¹

• Net loss of $6.5 million ($0.05 per Share), representing a $2.9 million improvement from 2024 Q1, driven by increases in revenue and gross profit, somewhat offset by higher interest and financing expenses.
• Adjusted Net Earnings¹ of $2.9 million ($0.02 per Share) improved from Adjusted Net Loss¹ of $15.6 million in 2024 Q1. Impacted by the same items as net loss, adjusted for the prepayment option on the Company's second-lien debt, and other normalization adjustments, including non-recurring impacts of seat supply disruption and associated production inefficiencies.
• ROIC¹ increased to 7.5% from 1.8% in 2024 Q1, primarily due to the increase in Adjusted EBITDA¹ offset by an increase in the invested capital base¹, which saw a gradual increase in long-term debt, higher working capital balances and an increase in the fair market value of the prepayment option on the Company's second lien debt.

Total Liquidity²

The Company's Total Liquidity¹ position, which combines cash on-hand plus available capacity under its senior first lien credit facilities (without consideration given to the waived minimum liquidity requirement of $50 million), was $127.9 million as at the end of 2025 Q1, up $1.1 million from the end of 2024 Q4. The small increase in the Total liquidity¹ position was due to increased milestone billings and advance payments - reflected in the Company's deferred revenue balances.

Subsequent to quarter end, NFI entered into a new two-year first lien secured revolving credit facility (First Lien Facility) with a total borrowing limit of $845 million, which includes $300 million in letter of credit availability. Taking into account the new First Lien Facility, on a pro-forma basis NFI's 2025 Q1 ending liquidity would have been $171.9 million.

Please refer to NFI's news release dated May 7, 2025, for more information regarding the terms and conditions of the new First Lien Facility.

Market Outlook

Management anticipates improvements to revenue, gross profit, net earnings, Adjusted EBITDA¹, Free Cash Flow¹, and ROIC¹, in the near-and longer-term as the Company executes on its backlog¹, increases bus and coach production, delivers a higher number of ZEBs, grows its aftermarket business and benefits from the growing demand for its buses, coaches and parts, and the services provided by Infrastructure Solutions™.

Management's growth expectations are driven by several key factors:

• Continued Growth in New Orders: NFI received 2,523 orders in 2025 Q1, with expectations for further orders in 2025 that will further grow backlog¹. Numerous awards are for multi-year programs with firm and option orders (with options extending to 2029).
• Market Demand: Public transportation remains a critical driver of economic and environmental benefits and the Company's North American Public Bid Universe reflects strong demand with active bids of 5,306 EUs, and a five-year forecasted customer demand of 23,139 EUs. NFI has also seen overall increases in market demand for public and private coaches and low-floor cutaways markets fueled by growing ridership, increased travel, aging fleet assets and ongoing return to work initiatives.
• Increasing Public Transit Ridership and Increasing Fleet Age: According to the American Public Transit Association (APTA), fourth quarter 2024 ridership saw a 7.1% year-over-year growth driven by expanded services and new bus routes, and return-to-office mandates. APTA estimates that the average fleet age in North America has increased to 8.3 years, up from the estimated 7.0 years in 2018 reflecting the impact of lower industry deliveries from 2020 to 2024.
• Improvements in Overall Supplier Health: NFI has seen a significant decline in the number of moderate and high-risk suppliers, driven by a combination of improvements in global supply chain health and actions taken by NFI's supply and sourcing teams. Within the Company's top 750 suppliers, only a few have high-risk ratings. While still challenged, seat supply performance has seen some improvement in 2025, but remains an area of focus. Due to the complex nature of NFI's production, overall supply chain risk does remain.

NFI's strategy to provide the broadest offering of propulsion agnostic buses and coaches has positioned the Company well to realize upon growing demand as it can support customers diverse fleet plans. This offering includes low and zero-emission buses and coaches, alongside its broader solutions offering of aftermarket parts, training, Infrastructure Solutions™, and financing.

NFI's UK and international business has seen slower demand when compared to North America, primarily due to increased foreign and domestic competition. NFI is reviewing its production footprint and overhead costs in the UK to appropriately respond to these market conditions with a focus on lowering costs in 2025.

NFI continues to navigate seat supply disruption within its North American transit business. In response, NFI maintained lower production rates during the quarter, maintained dedicated team members onsite at the supplier's facility and is working directly with the supplier's management team and an external consultant on their recovery plan.

At the end of the quarter, NFI had 113 EUs of buses in inventory essentially complete, apart from seats. This was a decrease from the end of 2024 Q4. This number reduced to approximately 91 EUs as of May 2, 2025. In addition, a new Buy America compliant seat supplier has started seat deliveries and is expected to significantly ramp up production in the second half of 2025 that is expected to further support overall improvements to seat supply performance. NFI had expected to see significant improvements in seat supply performance and a reduction in its inventory of buses that are complete, but missing seats, through the second quarter of 2025, however recent developments with the impacted supplier may delay recovery timing and impact near-term deliveries, but does not change NFI's overall expectations for 2025 results.

Financial Guidance

NFI reaffirms its financial guidance for Fiscal 2025:

Please refer to NFI's MD&A dated March 13, 2025, for information regarding the assumptions and expectations for 2025 guidance. Note that the guidance numbers above do not include the impact of U.S. and Canadian tariffs and any changes resulting from U.S. funding policy developments discussed below.

Impact of U.S. and Canadian Tariffs and U.S. Policy Developments

NFI is taking numerous actions to alleviate the impacts of U.S. and Canadian tariffs, including leveraging the Company's localized production facilities, regionalized service and aftermarket parts distribution networks, and contractual terms of its firm orders. However, there remains a significant amount of imports and exports of parts, components, partially and fully assembled buses that travel across the U.S. and Canada border.

During the first quarter, NFI was subject to tariffs on imports of steel and aluminum in the U.S. and Canada, and tariffs on imports of goods from China. The Company's finished buses and coaches, completed in Canada or the U.S., and bus shells started in Canada, currently move between the U.S. and Canada without additional tariffs under the provisions of the United States, Mexico and Canada Free Trade Agreement (commonly referred to as the USMCA).

Going forward, NFI anticipates that the impact of tariffs will increase with U.S. tariffs now in effect on imports from most countries and as suppliers increase prices to reflect the impact of those tariffs. NFI anticipates that a significant portion of increased costs resulting from U.S. and Canadian tariffs impacting its public transit buses and public motorcoaches can be passed on to end customers through contractual obligations and through general price increases. This is likely to require negotiation with customers and such contractual protections may not cover all costs or be effective for extended periods.

It may be more difficult to pass on the impacts of increased input costs in private coach markets, as they do not have the same contractual terms. NFI anticipates that tariffs may lead to a reduction in private coach demand (and associated production) within North America. In addition, there may also be near-term cash flow implications due to the payment timing of tariffs and there may also be a decrease in order sizes due to higher prices.

The recent announcement of funding appropriations for Fiscal Year 2025 provides further support for ongoing funding to support future bus and coach orders and future option conversions. However, U.S. funding policy developments may evolve in unpredictable ways, particularly in the case of electric vehicles, which may have material impacts on the Company's future orders and option conversion. As the Company offers a wide range of propulsion agnostic bus and coach models, it expects that any decrease in electric vehicle orders would likely be replaced by orders for other propulsion types, including clean diesel, compressed natural gas or diesel electric hybrids.

The impact tariffs, U.S. funding developments and other trade measures could have general economic conditions, supply chain health, customer demand and the Company's business is uncertain and could be materially adverse. In addition, the current seat supply disruptions may be extended and/or exacerbated beyond management's current expectations, there remains a risk of additional supply or operational disruptions. See Appendix A Forward Looking Statements for a description of risks and other factors and the Company's filings on SEDAR+ at www.sedarplus.ca.

First Quarter 2025 Results Conference Call

A conference call for analysts and interested listeners will be held on Friday, May 9, 2025, at 8:30 a.m. Eastern Time (ET). An accompanying results presentation will be available prior to market open on May 9, 2025, at www.nfigroup.com. 

For attendees who wish to join by webcast, registration is not required; the event can be accessed at https://edge.media-server.com/mmc/p/t9op4a47.

Attendees who wish to join by phone must pre-register at the following link: https://register-conf.media-server.com/register/BIb27089ba29a84717819864d8a9c18d2e. An email will be sent to the user's registered email address, which will provide the call-in details. Due to the possibility of emails being held up in spam filters, we highly recommend that attendees wishing to join via phone register ahead of time to ensure receipt of their access details.

A replay of the call will be accessible from about 12:00 p.m. ET on May 9, 2025, until 11:59 p.m. ET on May 8, 2026, at https://edge.media-server.com/mmc/p/t9op4a47. The replay will also be available on NFI's website at: www.nfigroup.com.

About NFI Group

Leveraging 450 years of combined experience, NFI offers a wide range of propulsion-agnostic bus and coach platforms, including market leading electric models. Through its low- and zero-emission buses and coaches, infrastructure, and technology, NFI meets today's urban demands for scalable smart mobility solutions. Together, NFI is enabling more livable cities through connected, clean, and sustainable transportation.

With nearly 9,000 team members in ten countries, NFI is a leading global bus manufacturer of mass mobility solutions under the brands New Flyer^® (heavy-duty transit buses), MCI^® (motorcoaches), Alexander Dennis Limited (single and double-deck buses), ARBOC^® (low-floor cutaway and medium-duty buses), and NFI Parts™. NFI currently offers the widest range of sustainable drive systems available, including zero-emission electric (trolley, battery, and fuel cell), natural gas, electric hybrid, and clean diesel. In total, NFI supports its installed base of over 100,000 buses and coaches around the world. NFI's common shares ("Shares”) trade on the Toronto Stock Exchange ("TSX”) under the symbol NFI and its convertible unsecured debentures ("Debentures”) trade on the TSX under the symbol NFI.DB. News and information is available at www.nfigroup.com, www.newflyer.com, www.mcicoach.com, nfi.parts, www.alexander-dennis.com, arbocsv.com, and carfaircomposites.com.

For investor inquiries, please contact:

Stephen King

P: 204.224.6382

[email protected]

Footnotes:

1. Adjusted EBITDA, Adjusted Net Earnings (Loss), and Free Cash Flow represent non-IFRS measures; Adjusted Net Earnings (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 Earnings (Loss) per Share is based on the non-IFRS measure Adjusted Net Earnings (Loss). ROIC is based on net operating profit after tax and average invested capital, both of which are non-IFRS measures. Book-to-Bill Ratio is a non-IFRS measure and is defined as new firm orders and exercised options divided by new deliveries. 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 audited consolidated financial statements (including notes) (the "Financial Statements”) and the related Management's Discussion and Analysis (the "MD&A").
2. Results noted herein are for the 13-week period ("2025 Q1”) and the 52-week period ("2025 Q1 LTM”) ended March 30, 2025. The comparisons reported in this press release compare 2025 Q1 to the 13-week period ("2024 Q1") and 2025 Q1 LTM to the 52-week period ("2024 Q1 LTM") ended March 31, 2024. Comparisons and comments are also made to the 13-week period ("2024 Q4”) ended December 29, 2024. The term "LTM” is an abbreviation for "Last Twelve Month Period”.

Appendix A - Reconciliation Tables

Reconciliation of Net Earnings (Loss) to Adjusted EBITDA^NG and Net Operating Profit after Taxes^NG

Non-IFRS measures in the appendices of this press release have been denoted with an "NG". Please see Appendix B: "Non-IFRS and Other Financial Measures” section.

Management believes that Adjusted EBITDA^NG, and Net Operating Profit After Taxes ("NOPAT")^NG are important measures in evaluating the historical operating performance of the Company. However, Adjusted EBITDA^NG and NOPAT^NG are not recognized earnings measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS. Accordingly, Adjusted EBITDA^NG and NOPAT^NG may not be comparable to similar measures presented by other issuers. Readers of this MD&A are cautioned that Adjusted EBITDA^NG should not be construed as an alternative to net earnings or loss determined in accordance with IFRS Accounting Standards and NOPATNG should not be construed as an alternative to earnings (loss) from operations determined in accordance with IFRS Accounting Standards as an indicator of the Company's performance.

The Company defines Adjusted EBITDA^NG as earnings before interest, income tax, depreciation and amortization after adjusting for the effects of certain non-recurring, non-operating, and items occurring outside of normal operations that do not reflect the current ongoing cash operations of the Company. These adjustments are provided in the following table reconciling net earnings or losses to Adjusted EBITDA^NG based on the historical financial statements of the Company for the periods indicated. The Company defines NOPAT^NG as Adjusted EBITDA^NG less depreciation of plant and equipment, depreciation of right-of-use assets and income taxes at a rate of 31%.