NFI Announces Third Quarter Results
Improvements in Deliveries, Revenue, Free Cash Flow1, Adjusted EBITDA1 and Liquidity1 with a total backlog of $13.2 billion
WINNIPEG, Manitoba, Nov. 06, 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 third quarter of 2025. All figures quoted in U.S. dollars unless otherwise noted.
Third Quarter Highlights
- Deliveries: 1,114 equivalent units ("EUs"), with 27.6% being battery- and fuel cell-electric buses (“ZEBs”)
- Revenue: $879.9 million, an increase of 23.7% year-over-year
- Gross Loss: $114.3 million, the Company would have reported a Gross Profit of $115.6 million, with gross margin of 13.1%, without the impact of the battery recall warranty provisions
- Net Loss: $140.9 million, with Net Loss per Share of $1.18, impacted by the battery recall warranty provisions
- Adjusted Net Earnings1: $12.1 million and Adjusted Net Earnings per Share1 of $0.10
- Net cash generated by operating activities: $83.9 million, positively impacted by working capital benefits from battery recall provision charges, advance customer payments, and decreases in interest and finance costs
- Adjusted EBITDA1: $80.9 million, an increase of 52.1% year-over-year
- Backlog1: $13.2 billion (5,774 EUs firm and 9,832 EUs options), up 7.0% year-over-year; ZEBs represent 35.1% of total backlog1 EUs
- ROIC1: increased to 9.1%, up from 5.3% in 2024 Q3
- Liquidity1: $386.0 million, a 169.0% increase from 2024 Q3
Key financial metrics for 2025 Q3 are included in the table below:
| in millions except deliveries and per share amounts | 2025 Q3 |
2024 Q3 |
2025 Q3 LTM |
2024 Q3 LTM |
|||||||||
| Deliveries (EUs) | 1,114 | 994 | 4,398 | 4,594 | |||||||||
| IFRS Measures | |||||||||||||
| Revenue | $ | 879.9 | $ | 711.3 | $ | 3,426.4 | $ | 3,082.0 | |||||
| Net loss | $ | (140.9 | ) | $ | (15.0 | ) | $ | (289.5 | ) | $ | (24.2 | ) | |
| Net loss per share | $ | (1.18 | ) | $ | (0.13 | ) | $ | (2.43 | ) | $ | (0.20 | ) | |
| Net cash generated (used) by operating activities | $ | 83.9 | $ | (45.2 | ) | $ | 72.6 | $ | 53.0 | ||||
| Non-IFRS Measures | |||||||||||||
| Adjusted EBITDA1 | $ | 80.9 | $ | 53.2 | $ | 282.4 | $ | 185.0 | |||||
| Adjusted Net Earnings1 | $ | 12.1 | $ | (4.8 | ) | $ | 39.7 | $ | (23.2 | ) | |||
| Adjusted Net Earnings per Share1 | $ | 0.10 | $ | (0.04 | ) | $ | 0.33 | $ | (0.20 | ) | |||
| Free Cash Flow1 | $ | 14.8 | $ | 2.0 | $ | 35.5 | $ | (15.7 | ) | ||||
| Return on Invested Capital (ROIC)1 | 9.1 | % | 3.5 | % | 9.1 | % | 3.5 | % | |||||
CEO Comments
"The third quarter saw improvements in delivery performance with improved revenue and expanded margins per unit delivered as we converted our stronger backlog into results. These operational gains translated into significant growth in Adjusted EBITDA and Free Cash Flow reinforcing our continued focus on deleveraging and growing liquidity,” said Paul Soubry, President and Chief Executive Officer, NFI. “These positives were partially offset by warranty charges related to a battery recall and associated support costs. We are in detailed discussions with the supplier who provides those systems and expect to reach an agreement on recall costs as we move through the fourth quarter.”
“We continued to drive performance enhancements to our supply chain, including a joint venture investment to take over the assets of American Seating. We feel this joint venture will stabilize and enhance operations, ensuring more consistent supply for their customers, including NFI, and the millions of riders who use those seats every day.”
“Our aftermarket business remained a strong contributor, even as quarterly margins were impacted by lower contribution from retrofit programs. We see opportunities for improved performance in that segment as it executes on several growth-related initiatives and fully reflect tariff impacts within its pricing models. The tariff environment continues to evolve, with a new tariff coming into effect on November 1st. We are working closely with suppliers and customers to ensure our pricing reflects these latest developments and continue to view tariffs primarily as pass-through costs, although private motor coach demand may be impacted.”
“Given our year-to-date performance we’ve narrowed our 2025 guidance ranges and remain confident in our ability to deliver strong revenue and margin growth in the fourth quarter. We expect this momentum will result in NFI recording it’s highest quarterly Adjusted EBITDA performance in Company history,” Soubry concluded.
2025 North American Battery Recall
During the quarter, NFI initiated a voluntary recall with the National Highway Traffic Safety Administration and Transport Canada. The recall impacted approximately 700 battery-electric buses and coaches (primarily New Flyer buses) equipped with certain battery modules from a common supplier, XALT Energy, LLC (referred to as XALT). After issuing the recall, NFI deployed operational guidelines and software to limit the state of charge and speed of charging for the continued safe operation of the affected buses and coaches.
The Company has now determined that full battery replacement on these buses is required. NFI is finalizing its execution plan, with the replacement campaign expected to take approximately 18 to 24 months to complete, starting in the first half of 2026. In 2025 Q3, NFI recorded a warranty provision of $229.9 million, reflecting the estimated costs for full battery replacement on all the vehicles impacted by the recall and estimated future costs associated with supporting vehicles in service that have other older XALT batteries (collectively, the Battery Recall). NFI has executed a tentative term sheet with XALT regarding the ongoing battery recall and is working towards a definitive agreement concerning the associated costs.
Amounts accrued for the Battery Recall are based on management’s best estimates of the amounts that will ultimately be required to settle such items as of this writing. Adjustments to these figures may be made as changes in the cost estimates become known. These adjustments can have a favorable or unfavorable impact on NFI’s results.
Additionally, on October 28, 2025, XALT announced its decision to exit battery manufacturing, advising that it will wind down its U.S. battery operations. XALT’s wind down does not change NFI’s expectation to finalize an agreement that meets the Company’s operational requirements and the needs of its customers.
NFI had previously taken proactive steps to move its primary battery supply for New Flyer battery-electric buses to a different supplier, who has been providing battery systems to NFI since 2023. This supplier is expected to provide batteries on new battery-electric buses in production and potentially the replacement of batteries on buses impacted by the recall.
Segment Results
Manufacturing
- Manufacturing revenue increased by $164.2 million, or 29.4%, from 2024 Q3, reflecting improved pricing on heavy-duty transit and coach deliveries, stronger product mix and higher transit and low-floor cutaway deliveries.
- Manufacturing net loss of $131.9 million, as improved unit margins were offset by the Battery Recall warranty provision and timing delays from seat related supply disruption.
- Without the impact of the Battery Recall the Manufacturing segment would have reported net earnings of $26.7 million, a $32.5 million improvement from 2024 Q3.
- Manufacturing Adjusted EBITDA1 improved by $36.1 million from 2024 Q3. The increase was primarily driven by higher revenue and improved unit margins within North American heavy-duty transit and coach.
- At quarter-end, the Company's total backlog1 (firm and options) of 15,606 EUs (value of $13.2 billion) increased by 7.0% on an EU basis and 10.4% on a dollar basis, from 2024 Q3.
- NFI added 644 EUs of new orders, supporting an LTM Book-to-Bill ratio1 of 108.5%. The average price of an EU in backlog1 is now $0.85 million, a 3.2% increase from 2024 Q2, reflecting the continued improvements in new order pricing.
Aftermarket
- Aftermarket revenue of $157.1 million, increased by 2.8% from 2024 Q3, primarily from increased pricing dynamics.
- Aftermarket net earnings decreased by $6.4 million from 2024 Q3 reflecting unfavourable sales mix and tariff impacts.
- Aftermarket Adjusted EBITDA1 decreased by $6.0 million, or 17.5%, primarily due to the same items that impacted Net earnings.
Consolidated Net Loss, Adjusted Net Earnings1, and Return on Invested Capital1
- Net loss of $140.9 million ($1.18 per Share), compared to Net loss of $15.0 million in 2024 Q3, driven primarily by the Battery Recall.
- Adjusted Net Earnings1 of $12.1 million ($0.10 per Share), includes adjustments for the Battery Recall and other fair market value normalization adjustments.
- ROIC1 increased to 9.1% from 5.3% in 2024 Q3, primarily due to the increase in Adjusted EBITDA1 and a decrease in the invested capital base1, which decreased due to lower shareholders equity and long-term debt combined with lower working capital balances.
Market Outlook
Management continues to see strong operational and financial metrics that support expectations for improvements to revenue, gross profit, Adjusted EBITDA1, Free Cash Flow1, and ROIC1, for the remainder of 2025 and into 2026 and beyond. Confidence in the long-term outlook comes as the Company executes on its backlog1, increases bus and coach production, and delivers on high-margin units while growing its aftermarket and Infrastructure SolutionsTM businesses.
Management’s growth expectations are driven by several key factors:
- New Order Activity: NFI received orders for 5,893 EUs on an LTM basis, with expectations for further orders in 2025 and 2026 following the U.S. government’s May announcement of funding apportionments for fiscal year 2025.
- Funding and Market Demand: In May 2025, the FTA released funding apportionments for $20.6 billion with dedicated bus programs remaining at the same levels as 2024. This funding supports future procurement activity and NFI’s North American Public Bid Universe remains strong with active bids of 7,503 EUs, and a five-year forecasted customer demand of 22,956 EUs. NFI has also seen overall increases in market demand for public and private coaches and low-floor cutaways fueled by growing ridership, increased travel, aging fleet assets and ongoing return to work initiatives.
- Increasing Public Transit Ridership and Increasing Fleet Age: Ridership levels in the U.S. remain on an upward trend, with the latest available American Public Transit Association (APTA) Ridership Trends Dashboard report (as of 2025 Q2) showing bus ridership growth of 1.8% year-over-year. Average fleet age in North American transit has also increased, with APTA estimating the fleet age at 8.8 years and NFI estimating that nearly half of North American transit buses have surpassed 12 years of service.
- Improvements in Overall Supplier Health: NFI has continued to see a significant decline in the number of moderate and high-risk suppliers, now at three high-risk suppliers out of the Company’s top 800 suppliers.
NFI’s strategy to provide the broadest offering of propulsion agnostic buses and coaches, built on common production lines, has positioned the Company well to realize upon growing demand as it can support customers diverse fleet plans even if demand for specific propulsion types shift. This offering includes low and zero-emission buses and coaches, alongside its broader solutions offering of aftermarket parts, training, Infrastructure SolutionsTM, and financing.
Financial Guidance
Reflecting year-to-date financial performance and expected fourth quarter deliveries and aftermarket parts sales, NFI has made adjustments to tighten its expected financial guidance ranges for Fiscal 2025.
| 2025 Original Guidance | 2025 Updated Guidance | |
| Revenue | $3.8 to $4.2 billion | $3.5 to $3.7 billion |
| ZEBs (electric) as a percentage of manufacturing sales | 35% - 40% | approximately 35% |
| Adjusted EBITDA1 | $320 to $360 million | $320 to $340 million |
| Cash Capital Expenditures | $50 to $60 million | $45 to $50 million |
| ROIC1 | 9% to 12% | 9% to 12% |
Revenue and ZEBs (electric) as a percentage of manufacturing sales: Updated range reflects year-to-date performance, expected deliveries and sales mix for the fourth quarter (which typically has higher sales volumes from private segment customers in the U.K. and North America). Overall ZEB deliveries and sales for 2025 are expected to be on the lower end of the original guidance range reflecting timing impacts from customer acceptances and the impacts of some supply related disruption.
Adjusted EBITDA1: The higher end of the range was adjusted reflecting year-to-date performance within the manufacturing and aftermarket segments and lower ZEB deliveries. NFI expects year-over-year improvement in vehicle deliveries and improved gross margins, supporting expectations for the Company to report its highest ever quarterly Adjusted EBITDA1 in 2025 Q4.
Cash Capital Expenditures: The range was updated to reflect year-to-date investments and expectations that cash capital expenditures for 2025 will be lower than original guidance, even as the Company has invested into new facilities and equipment.
Please refer to NFI’s MD&A dated March 13, 2025, for the information regarding the original assumptions and expectations for 2025 guidance that have been adjusted above to reflect the latest estimates. Note that the guidance numbers above include the year-to-date impact of U.S. and Canadian tariffs, but do not reflect the potential impact of tariffs on fourth quarter performance.
Tariff Impacts
During the third 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 various international jurisdictions. In addition, NFI also began to receive updated pricing from its suppliers reflecting the impacts of tariffs on input components they source and import into the U.S. NFI has been actively engaging with its customers to discuss the pricing impacts of tariffs on buses and coaches for their parts and commodities sourced from international suppliers, and has begun the process of negotiating and charging surcharges to reflect the costs of those tariffs.
NFI had seen stability in the overall tariff environment and its impact on operations during the third quarter, but did anticipate that it may experience some additional costs as suppliers increase prices to reflect the impact of tariffs on their products. A new tariff of 10% on all imports of buses and coaches into the United States from any jurisdiction went into effect on November 1st, 2025, and is expected to lead to increased pricing and tariff surcharges to end users. 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.
Tariff-driven cost increases may be more difficult to offset in the private coach market. However, the impact on NFI’s 2025 results is moderated by the transactional sales model and current inventory of private coaches that are in the United States and have lower tariff costs. Over the medium and longer-term higher prices from tariffs may negatively impact overall demand (and production) within the private coach segment, as all importers now face a standard 10% tariff. NFI is assessing the potential impacts of these newly implemented tariffs and will adjust production and cost levels as required. There may also be near-term cash flow implications on NFI’s operations due to the timing of tariff payments, deliveries, and revenue collection, and potential decreases in order sizes due to higher prices.
The impact of tariffs, U.S. funding developments and other trade measures could have on 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, and 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.
Third Quarter 2025 Results Conference Call
A conference call for analysts and interested listeners will be held on Friday, November 7, 2025, at 7:30 a.m. Eastern Time (ET). An accompanying results presentation will be available prior to market open on Friday, November 7, 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/4d6kaumk/.
Attendees who wish to join by phone must pre-register at the following link: https://register-conf.media-server.com/register. 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 November 7, 2025, until 11:59 p.m. ET on November 7, 2026, at https://edge.media-server.com/mmc/p/4d6kaumk/.Other materials will also be available on NFI's website at www.nfigroup.com.
About NFI Group
Leveraging 450 years of combined experience, NFI is leading the electrification of mass mobility around the world. With 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 over 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® (motor coaches), 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 (referring to propulsion systems that do not utilize combustion engines, such as 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
Footnotes:
- 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 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").
- Results noted herein are for the 13-week period ("2025 Q3”) and the 52-week period ("2025 Q3 LTM”) ended September 28, 2025. The comparisons reported in this press release compare 2025 Q3 to the 13-week period ("2024 Q3") and 2025 Q3 LTM to the 52-week period ("2024 Q3 LTM") ended September 29, 2024. Comparisons and comments are also made to the 13-week period (“2025 Q2”) ended June 29, 2025. The term “LTM” is an abbreviation for “Last Twelve Month Period”.
Appendix A - Reconciliation Tables
Reconciliation of Net Earnings (Loss) to Adjusted EBITDANG and Net Operating Profit after TaxesNG
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 EBITDANG, and Net Operating Profit After Taxes ("NOPAT")NG are important measures in evaluating the historical operating performance of the Company. However, Adjusted EBITDANG and NOPATNG are not recognized earnings measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS. Accordingly, Adjusted EBITDANG and NOPATNG may not be comparable to similar measures presented by other issuers. Readers of this press release are cautioned that Adjusted EBITDANG 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 EBITDANG 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 EBITDANG based on the historical financial statements of the Company for the periods indicated. The Company defines NOPATNG as Adjusted EBITDANG less depreciation of plant and equipment, depreciation of right-of-use assets and income taxes at a rate of 31%.
| ($ thousands) |
2025 Q3 |
2024 Q3 |
39-Weeks Ended September 28, 2025 |
39-Weeks Ended September 29, 2024 |
52-Weeks Ended September 28, 2025 |
52-Weeks Ended September 29, 2024 |
||||||
| Net loss | (140,879 | ) | (14,993 | ) | (308,140 | ) | (21,859 | ) | (289,576 | ) | (24,190 | ) |
| Addback | ||||||||||||
| Income tax (recovery) expense | (51,513 | ) | 360 | (40,088 | ) | (3,452 | ) | (39,804 | ) | (15,644 | ) | |
| Interest expense8 | 31,961 | 38,553 | 96,040 | 103,141 | 123,838 | 140,420 | ||||||
| Amortization | 19,616 | 18,708 | 57,621 | 60,556 | 77,195 | 80,234 | ||||||
| (Gain) loss on disposition of property, plant and equipment and right of use assets15 | (36 | ) | 11 | (195 | ) | (32 | ) | 29 | (94 | ) | ||
| Loss on debt modification13 | - | - | - | - | - | 1,600 | ||||||
| Loss on debt extinguishment14 | - | - | 43,185 | 234 | 43,185 | 234 | ||||||
| Fee for early repayment of 2023 second lien debt16 | - | - | 10,825 |
- | 10,825 |
- | ||||||
| Unrealized foreign exchange (gain) loss on non-current monetary items and forward foreign exchange contracts | (1,338 | ) | 1,585 | (2,396 | ) | (6,531 | ) | (14,482 | ) | (5,271 | ) | |
| Past service costs and other pension costs12 | - | - | - | - | - | (7,000 | ) | |||||
| Equity settled stock-based compensation | 499 | 925 | 2,220 | 2,191 | 2,262 | 2,891 | ||||||
| Unrecoverable insurance costs and other7 | - | - | - | 116 | - | 1,009 | ||||||
| Expenses incurred outside of normal operations9 | 4,471 | - | 24,804 | - | 35,861 | 132 | ||||||
| Battery Recall18 | 229,859 | - | 229,859 | - | 229,859 | - | ||||||
| Prior year sales tax provision11 | - | - | - | - | - | 41 | ||||||
| Impairment loss on intangible assets10 | - | - | 80,897 | 1,028 | 82,147 | 1,028 | ||||||
| Impairment loss on goodwill15 | - | - | 9,965 |
- | 9,965 |
- | ||||||
| Impairment (recovery) loss on property, plant and equipment15 | (3,829 | ) | - | 504 | - | 504 | - | |||||
| Restructuring costs6 | (7,864 | ) | 8,056 | 9,352 | 11,160 | 10,531 | 9,616 | |||||
| Adjusted EBITDANG | 80,947 | 53,205 | 214,453 | 146,552 | 282,339 | 185,006 | ||||||
| Depreciation of property, plant and equipment and right of use assets | (12,299 | ) | (10,718 | ) | (35,190 | ) | (36,276 | ) | (46,695 | ) | (48,124 | ) |
| Tax at 31% | (21,281 | ) | (13,171 | ) | (55,571 | ) | (34,186 | ) | (73,050 | ) | (42,433 | ) |
| NOPATNG | 47,367 | 29,316 | 123,691 | 76,091 | 162,594 | 94,449 | ||||||
| Adjusted EBITDANGis comprised of: | ||||||||||||
| Manufacturing | 53,365 | 17,329 | 139,155 | 48,983 | 174,361 | 60,077 | ||||||
| Aftermarket | 28,319 | 34,333 | 91,918 | 106,771 | 124,688 | 136,251 | ||||||
| Corporate | (737 | ) | 1,543 | (16,620 | ) | (9,202 | ) | (16,710 | ) | (11,322 | ) | |
(Footnotes on page 9)
Free Cash FlowNG and Free Cash Flow per ShareNG
Management uses Free Cash FlowNG and Free Cash Flow per ShareNG as non-IFRS measures to evaluate the Company’s operating performance and liquidityNG, to assess the Company’s ability to pay dividends on the Shares, service debt, pay interest on the Debentures and meet other payment obligations. However, Free Cash FlowNG and Free Cash Flow per ShareNG are not recognized earnings measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS. Accordingly, Free Cash FlowNG and the associated per Share figure may not be comparable to similar measures presented by other issuers. Readers of this press release are cautioned that Free Cash FlowNG should not be construed as an alternative to cash flows from operating activities determined in accordance with IFRS Accounting Standards as a measure of liquidityNG and cash flow. The Company defines Free Cash FlowNG as net cash generated by or used in operating activities adjusted for changes in non-cash working capital items and adjusted for items as shown in the reconciliation of net cash generated by operating activities (an IFRS Accounting Standards measure) to Free Cash FlowNG based on the Company’s historical financial statements.
The Company generates its Free Cash FlowNG from operations and management expects this will continue to be the case for the foreseeable future. Net cash flows generated from operating activities are significantly impacted by changes in non-cash working capital. The Company uses its 2025 First Lien Facility to finance working capital and therefore has excluded the impact of working capital in calculating Free Cash FlowNG.
The Company defines Free Cash Flow per ShareNG as Free Cash FlowNG divided by the average number of Shares outstanding.
| ($ thousands, except per Share figures) |
2025 Q3 |
2024 Q3 |
39-Weeks Ended September 28, 2025 |
39-Weeks Ended September 29, 2024 |
52-Weeks Ended September 28, 2025 |
52-Weeks Ended September 29, 2024 |
||||||
| Net cash generated by (used in) operating activities | 83,869 | (45,240 | ) | 55,059 | (2,152 | ) | 72,551 | 52,974 | ||||
| Changes in non-cash working capital items2 | (250,531 | ) | 35,445 | (230,066 | ) | 47,983 | (223,172 | ) | 28,812 | |||
| Interest paid2 | 12,531 | 45,824 | 79,834 | 90,924 | 110,017 | 110,034 | ||||||
| Interest expense2 | (28,411 | ) | (30,837 | ) | (91,894 | ) | (93,998 | ) | (122,527 | ) | (125,904 | ) |
| Income taxes paid (recovered)2 | 9,912 | 9,788 | 36,959 | 264 | 38,755 | (8,143 | ) | |||||
| Current income tax expense2 | (15,497 | ) | (6,206 | ) | (36,968 | ) | (23,361 | ) | (49,918 | ) | (7,488 | ) |
| Repayment of obligations under lease | (5,472 | ) | (3,867 | ) | (15,703 | ) | (16,378 | ) | (23,685 | ) | (23,683 | ) |
| Cash capital expenditures | (12,842 | ) | (7,309 | ) | (26,375 | ) | (21,792 | ) | (34,897 | ) | (31,914 | ) |
| Acquisition of intangible assets | (3,972 | ) | (3,097 | ) | (8,706 | ) | (10,328 | ) | (15,975 | ) | (13,156 | ) |
| Proceeds from disposition of property, plant and equipment | 69 | 66 | 82 | 923 | 122 | 1,442 | ||||||
| Defined benefit funding3 | 704 | 975 | 2,172 | 2,475 | 2,527 | 3,393 | ||||||
| Defined benefit expense3 | (816 | ) | (1,237 | ) | (2,708 | ) | (2,829 | ) | (3,650 | ) | (3,523 | ) |
| Past service costs and other pension costs12 | - | - | - | - | - | (7,000 | ) | |||||
| Expenses incurred outside of normal operations9 | 4,471 | - | 24,804 | - | 35,861 | 132 | ||||||
| Unrecoverable insurance costs and other7 | - | - | - | 116 | - | 1,009 | ||||||
| Asset impairment17 | - | - | (1,619 | ) | - | (1,619 | ) | - | ||||
| Fee for early repayment of 2023 second lien debt16 | - | - | 10,825 |
- | 10,825 |
- | ||||||
| Battery Recall18 | 229,859 | - | 229,859 | - | 229,859 | - | ||||||
| Prior year sales tax provision11 | - | - | - | - | - | 41 | ||||||
| Restructuring costs6 | (7,864 | ) | 8,056 | 9,352 | 11,160 | 10,531 | 12,170 | |||||
| Foreign exchange loss on cash held in foreign currency4 | (1,189 | ) | (406 | ) | (18 | ) | (1,390 | ) | (146 | ) | (4,895 | ) |
| Free Cash FlowNG | 14,821 | 1,955 | 34,889 | (18,382 | ) | 35,459 | (15,699 | ) | ||||
| U.S. exchange rate1 | 1.3765 | 1.3516 | 1.3874 | 1.3516 | 1.3883 | 1.3585 | ||||||
| Free Cash Flow (C$)NG | 20,401 | 2,642 | 48,404 | (24,845 | ) | 49,227 | (21,326 | ) | ||||
| Free Cash Flow per Share (C$)NG, 5 | 0.1713 | 0.0222 | 0.4066 | (0.2088 | ) | 0.4137 | (0.1792 | ) |
- U.S. exchange rate (C$ per US$) is the average exchange rate for the period.
- Changes in non-cash working capital are excluded from the calculation of Free Cash FlowNG as these temporary fluctuations are managed through the 2025 First Lien Facility which are available to fund general corporate requirements, including working capital requirements, subject to borrowing capacity restrictions. Changes in non-cash working capital are presented on the unaudited interim condensed consolidated statements of cash flows net of interest and income taxes paid.
- The cash effect of the difference between the defined benefit expense and funding is included in the determination of cash from operating activities. This cash effect is excluded in the determination of Free Cash FlowNG as management believes that the defined benefit expense amount provides a more appropriate measure, as the defined benefit funding can be impacted by special payments to reduce the unfunded pension liability.
- Foreign exchange loss on cash held in foreign currency is excluded in the determination of cash from operating activities under IFRS Accounting Standards; however, because it is a cash item, management believes it should be included in the calculation of Free Cash FlowNG.
- Per Share calculations for Free Cash FlowNG (C$) are determined by dividing Free Cash FlowNG by the total number of all issued and outstanding Shares using the weighted average over the period. The weighted average number of Shares outstanding for 2025 Q3 was 119,083,747 and 119,028,532 for 2024 Q3. The weighted average number of Shares outstanding for 2025 Q3 LTM and 2024 Q3 LTM was 119,056,781 and 118,989,934, respectively.
- Normalized to exclude non-operating restructuring costs. Costs primarily related to severance costs, inefficient labour costs, increased medical costs and right-of-use asset impairments and inventory impairments associated with restructuring initiatives. In 2025 Q2, NFI recorded a $14.8 million restructuring provision related to the expected role reductions at Alexander Dennis. Free Cash FlowNG reconciling amounts are net of right-of-use asset and property, plant and equipment impairments. In 2025 Q3, with the advocacy and intervention of the Scottish government and Scottish enterprise, NFI announced that the Scottish manufacturing sites would remain open. This resulted in recoveries of $12.6 million related to previously expected role reductions.
- Normalized to exclude non-operating costs related to an insurance event that are not recoverable, or are related to the deductible.
- Includes fair market value adjustments to interest rate swaps, cash conversion option on the Debentures, and to the prepayment option on the Company’s second lien debt. 2025 Q3 includes a gain of $0.2 million compared to a gain of $0.2 million in 2024 Q3 for the interest rate swaps. 2025 Q3 includes a gain of $2.1 million and 2024 Q3 includes a gain of $5.2 million on the cash conversion option. The prepayment option related to the 2023 Second Lien Debt had a gain of $16.0 million in 2025 Q3 and a gain of $0.6 million in 2024 Q3.
- Includes adjustments made related to items that occurred outside of normal operations. This includes specified items purchased in broker markets at a premium and associated broker fees, which the Company provided to suppliers, and does not normally directly purchase. In 2025 Q3, $4.5 million in labour and overhead costs were incurred as a result of the seat supply disruption, in addition to $9.7 million recognized in 2025 Q2, $10.6 million recognized and 2025 Q1, and $11.1 million recognized in 2024 Q4.
- In 2024 Q1, the Company recognized an impairment loss on a New Product Development (“NPD”) project for $1.0 million. In 2025 Q2, the Company recorded a $80.9 million intangible asset impairment related to the Alexander Dennis manufacturing business unit.
- Provision for sales taxes as a result of a previous state sales tax review.
- Costs and recoveries associated with amendments to, and closures of, the Company's pension plans. 2022 Q2 includes $7.0 million for the liability related to the closure of MCI’s Pembina facility and withdrawal from the multi-employer pension plan. In 2023 Q4, the Company made the decision to continue operations of the Pembina facility indefinitely, thereby reversing the above adjustments made in 2022 Q2.
- As a result of the Company's comprehensive refinancing, the Company had recognized an accounting gain in 2023 Q3 stemming from the modification made to its prior secured facilities. In 2023 Q4, an accounting loss was recorded to adjust the gain on debt modification.
- In 2024 Q2, the Company recognized an accounting loss for the debt extinguishment related to the amendments made to the MDC senior unsecured facility. In 2025 Q2, the Company recognized an accounting loss of $43.2 million for the debt extinguishment as a result of the Company's comprehensive refinancing with the 2025 First Lien Facility.
- In 2025 Q2, NFI recorded impairments related to the reductions in expected new vehicle demand in response to increased competition within the UK market. This resulted in a $4.3 million property, plant and equipment impairment, and a $10 million goodwill impairment within the Alexander Dennis manufacturing business unit. In 2025 Q3, with the advocacy and intervention of the Scottish government and Scottish enterprise, NFI announced that the Scottish manufacturing sites would remain open. This resulted in recoveries of $3.8 million related to the previously recorded property, plant and equipment impairment
- The company was assessed an early repayment fee of $10.8 million was associated with the 2023 Second Lien Debt.
- In 2025 Q2, NFI recorded an impairment on the previously recorded California Air Resources Board (CARB) credit of $1.6 million.
- During 2025 Q3, NFI initiated a Battery Recall related to certain battery modules from a common supplier, XALT Energy, LLC. The recall impacted approximately 700 battery-electric buses and coaches (primarily New Flyer buses).
Reconciliation of Net Earnings (Loss) to Adjusted Net Earnings (Loss)NG
Management believes that Adjusted Net Earnings (Loss)NG and the associated per Share figure are important measures in evaluating the historical operating performance of the Company. Adjusted Net Earnings (Loss)NG and Adjusted Net Earnings (Loss) per ShareNG are not recognized measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS. Accordingly, Adjusted Net Earnings (Loss)NG and Adjusted Net Earnings (Loss) per ShareNG may not be comparable to similar measures presented by other issuers. Readers of this press release are cautioned that Adjusted Net Earnings (Loss)NG and Adjusted Net Earnings (Loss) per ShareNG should not be construed as an alternative to net loss, or net loss per share, determined in accordance with IFRS Accounting Standards as indicators of the Company's performance.
The Company defines Adjusted Net Earnings (Loss)NG as net earnings (loss) after adjusting for the after tax effects of certain non-recurring, non-operating and items occurring outside of normal operation, that do not reflect the current ongoing cash operations of the Company. These adjustments are provided in the following reconciliation of net earnings (loss) to Adjusted Net Earnings (Loss)NG based on the historical financial statements of the Company for the periods indicated.
The Company defines Adjusted Net Earnings (Loss)NG per share as Adjusted Net Earnings (Loss)NG divided by the average number of Shares outstanding.
| ($ thousands, except per Share figures) |
2025 Q3 |
2024 Q3 |
39-Weeks Ended September 28, 2025 |
39-Weeks Ended September 29, 2024 |
52-Weeks Ended September 28, 2025 |
52-Weeks Ended September 29, 2024 |
||||||
| Net loss | (140,879 | ) | (14,993 | ) | (308,140 | ) | (21,859 | ) | (289,576 | ) | (24,190 | ) |
| Adjustments, net of tax1, 2 | ||||||||||||
| Unrealized foreign exchange (gain) loss | (923 | ) | 1,094 | (1,653 | ) | (4,506 | ) | (9,992 | ) | (3,637 | ) | |
| Unrealized loss (gain) on interest rate swap | 106 | 1,915 | (246 | ) | 794 | (689 | ) | 794 | ||||
| Unrealized (gain) loss on cash conversion option | (1,475 | ) | 3,598 | (703 | ) | 779 | (6,047 | ) | 1,134 | |||
| Unrealized gain on prepayment option of second lien debt3 | - | (3,734 | ) | (9,420 | ) | (5,871 | ) | (10,160 | ) | (6,640 | ) | |
| Unrealized loss on second lien optional redemption |
1,056 | - | 2,201 | - | 2,201 | - | ||||||
| Loss on debt modification4 | - | - | - | - | - | 1,104 | ||||||
| Accretion associated to gain on debt modification | - | (345 | ) | (1,013 | ) | (1,007 | ) | (1,703 | ) | (1,458 | ) | |
| Loss on debt extinguishment5 | - | - | 29,798 | 161 | 29,798 | 161 | ||||||
| Equity settled stock-based compensation | 344 | 638 | 1,532 | 1,511 | 1,561 | 1,994 | ||||||
| (Gain) loss on disposition of property, plant and equipment | (25 | ) | 8 | (135 | ) | (22 | ) | 20 | (65 | ) | ||
| Past service costsand other pension costs6 | - | - | - | - | - | (4,830 | ) | |||||
| Unrecoverable insurance costs and other7 | - | - | - | 80 | - | 696 | ||||||
| Deferred tax assets not recognized14 | - | - | 34,443 | - | 34,443 | - | ||||||
| Expenses incurred outside of normal operations8 | 3,085 | - | 17,115 | - | 24,744 | (1,191 | ) | |||||
| Other tax adjustments | - | - | (6,311 | ) | - | (6,311 | ) | - | ||||
| Impairment loss on goodwill12 |
- | - | 9,965 | - | 9,965 | - | ||||||
| Battery Recall15 | 158,603 | - | 158,603 | - | 158,603 | - | ||||||
| Fee for early repayment of 2023 second lien debt13 | - | - | 7,469 | - | 7,469 | - | ||||||
| Impairment (recovery) loss on property, plant, and equipment12 | (3,829 | ) | - | 504 | - | 504 | - | |||||
| Accretion in carrying value of convertible debt and cash conversion option | 1,500 | 1,419 | 4,414 | 4,174 | 5,854 | 5,511 | ||||||
| Prior year sales tax provision9 | - | - | - | - | - | 28 | ||||||
| Impairment loss on intangible assets10 | - | - | 80,897 | 709 | 81,760 | 709 | ||||||
| Restructuring costs11 | (5,426 | ) | 5,559 | 6,453 | 7,700 | 7,267 | 6,635 | |||||
| Adjusted Net Earnings (Loss)NG | 12,137 | (4,841 | ) | 25,773 | (17,357 | ) | 39,711 | (23,245 | ) | |||
| Loss per Share (basic) | (1.18 | ) | (0.13 | ) | (2.59 |
) | (0.18 | ) | (2.43 | ) | (0.20 | ) |
| Loss per Share (fully diluted) | (1.18 | ) | (0.13 | ) | (2.59 |
) | (0.18 | ) | (2.43 | ) | (0.20 | ) |
| Adjusted Net Earnings (Loss) per Share (basic)NG | 0.10 | (0.04 | ) | 0.23 | (0.15 | ) | 0.34 | (0.20 | ) | |||
| Adjusted Net Earnings (Loss) per Share (fully diluted)NG | 0.10 | (0.04 | ) | 0.22 | (0.15 | ) | 0.33 | (0.20 | ) | |||
- Addback items are derived from the historical financial statements of the Company.
- The Company has utilized a rate of 31.0% to tax effect the adjustments for the periods above.
- The unrealized gain on the prepayment option is related to the Company's Second Lien Debt instrument.
- As a result of the Company's refinancing in 2023, the Company has recognized an accounting gain stemming from the modification made to its prior secured facilities.
- In 2024 Q2, the Company recognized an accounting loss for the debt extinguishment related to the amendments made to the MDC senior unsecured facility. In 2025 Q2, the Company recognized an accounting loss for the debt extinguishment as a result of the Company's comprehensive refinancing with the 2025 First Lien Facility.
- Costs and recoveries associated with amendments to, and closures of, the Company's pension plans. In 2022 Q2, $7.0 million liability was recorded related to the anticipated closure of MCI’s Pembina facility and withdrawal from the multi-employer pension plan. In 2023 Q4, the Company made the decision to continue operations of the Pembina facility indefinitely, thereby reversing the above adjustments made in 2022 Q2.
- Normalized to exclude non-operating costs related to an insurance event that are not recoverable, or are related to the deductible.
- Includes adjustments made related to items that occurred outside of normal operations. This includes specified items purchased in broker markets at a premium and associated broker fees, which the Company provided to suppliers, and does not normally directly purchase. In 2025 Q3, $4.5 million in labour and overhead costs were incurred as a result of the seat supply disruption, in addition to $9.7 million recognized in 2025 Q2, $10.6 million recognized and 2025 Q1, and $11.1 million recognized in 2024 Q4. In 2025 Q3, with the advocacy and intervention of the Scottish government and Scottish enterprise, NFI announced that the Scottish manufacturing sites would remain open. This resulted in recoveries of $12.6 million related to previously expected role reductions.
- Provision for sales taxes as a result of a previous state sales tax review.
- In 2024 Q1, the Company recognized an impairment loss on an NPD project for $1.0 million. In 2025 Q2, the Company recorded a $80.9 million intangible asset impairment related to the Alexander Dennis manufacturing business unit.
- Normalized to exclude non-operating restructuring costs. Costs primarily related to severance costs, inefficient labour costs, increased medical costs and right-of-use asset impairments and inventory impairments associated with other restructuring initiatives. In 2025 Q2, NFI recorded a restructuring provision related to the expected role reductions at Alexander Dennis. Free Cash FlowNG reconciling amounts are net of right-of-use asset and property, plant and equipment impairments
- In 2025 Q2, NFI recorded impairments related to the reductions in expected new vehicle demand in response to increased competition within the UK market. This resulted in a $4.3 million property, plant and equipment impairment, and a $10 million goodwill impairment within the Alexander Dennis manufacturing business unit. In 2025 Q3, with the advocacy and intervention of the Scottish government and Scottish enterprise, NFI announced that the Scottish manufacturing sites would remain open. This resulted in recoveries of $3.8 million related to the previously recorded property, plant and equipment impairment.
- The Company was assessed a fee for early repayment associated with the 2023 Second Lien Debt.
- The Company recorded a write-down of deferred tax assets of $34.4 million, the ETR was detrimentally impacted by the derecognition of deferred tax assets associated with the UK operations.
- During 2025 Q3, NFI initiated a Battery Recall related to certain battery modules from a common supplier, XALT Energy, LLC. The recall impacted approximately 700 battery-electric buses and coaches (primarily New Flyer buses).
Reconciliation of Shareholders' Equity to Invested CapitalNG
The following table reconciles Shareholders' Equity to Invested Capital. The average invested capital for the last twelve months is used in the calculation of ROICNG. ROICNG is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. Accordingly, ROICNG may not be comparable to similar measures presented by other issuers. See Non-IFRS Measures for the definition of ROICNG.
| ($ thousands) | 2025 Q3 | 2025 Q2 | 2025 Q1 | 2024 Q4 | ||||
| Shareholders' Equity | 417,925 | 557,787 | 703,529 | 707,754 | ||||
| Addback | ||||||||
| Long term debt | 273,334 | 324,660 | 643,872 | 610,237 | ||||
| Second lien debt | 607,887 | 611,056 | 174,202 | 173,741 | ||||
| Obligation under lease | 134,973 | 129,738 | 129,629 | 129,511 | ||||
| Convertible debentures | 231,841 | 233,567 | 221,540 | 218,020 | ||||
| Senior unsecured debt | 33,659 | 33,322 | 51,051 | 50,040 | ||||
| Derivatives | (15,644 | ) | (13,852 | ) | (6,874 | ) | (10,497 | ) |
| Cash | (72,649 | ) | (78,912 | ) | (107,985 | ) | (49,557 | ) |
| Invested CapitalNG | 1,611,326 | 1,797,366 | 1,808,964 | 1,829,249 | ||||
| Average of invested capitalNG over the quarter | 1,704,346 | 1,803,165 | 1,819,107 | 1,836,095 | ||||
| 2024 Q3 | 2024 Q2 | 2024 Q1 | 2023 Q4 | |||||
| Shareholders' Equity | 699,717 | 704,031 | 697,580 | 702,913 | ||||
| Addback | ||||||||
| Long term debt | 610,624 | 576,145 | 562,324 | 536,037 | ||||
| Second lien debt | 173,309 | 172,910 | 172,568 | 172,396 | ||||
| Obligation under lease | 130,020 | 131,382 | 135,959 | 138,003 | ||||
| Convertible debentures | 230,453 | 225,628 | 225,972 | 228,985 | ||||
| Senior unsecured debt | 56,210 | 54,997 | 61,081 | 61,796 | ||||
| Derivatives | 2,327 | (2,740 | ) | (1,783 | ) | 8,010 | ||
| Cash | (59,720 | ) | (77,445 | ) | (68,491 | ) | (49,615 | ) |
| Invested CapitalNG | 1,842,940 | 1,784,908 | 1,785,210 | 1,798,525 | ||||
| Average of invested capitalNG over the quarter | 1,813,922 | 1,785,059 | 1,791,868 | 1,802,654 | ||||
Appendix B - Non-IFRS Measures and Forward-Looking Statements
Non-IFRS Measures
References to “Adjusted EBITDA” are to earnings before interest, income taxes, depreciation and amortization after adjusting for the effects of certain non-recurring and/or non-operations related items and expenses incurred outside the normal course of operations that do not reflect the current ongoing cash operations of the Company. These adjustments include gains or losses on disposal of property, plant and equipment, fair value adjustment for total return swap, unrealized foreign exchange losses or gains on non-current monetary items and forward foreign exchange contracts, costs associated with assessing strategic and corporate initiatives, past service costs and other pension costs or recovery, non-operating costs or recoveries related to business acquisition, fair value adjustment to acquired subsidiary company's inventory and deferred revenue, proportion of the total return swap realized, equity settled stock-based compensation, expenses incurred outside the normal course of operations, recovery of currency transactions, prior year sales tax provision, COVID-19 costs and impairment loss on goodwill and non-operating restructuring costs.
References to "NOPAT" are to Adjusted EBITDA less depreciation of plant and equipment, depreciation of right-of-use assets and income taxes at a rate of 31%.
“Free Cash Flow” means net cash generated by or used in operating activities adjusted for changes in non-cash working capital items, interest paid, interest expense, income taxes paid, current income tax expense, repayment of obligation under lease, cash capital expenditures, acquisition of intangible assets, proceeds from disposition of property, plant and equipment, costs associated with assessing strategic and corporate initiatives, fair value adjustment to acquired subsidiary company's inventory and deferred revenue, defined benefit funding, defined benefit expense, past service costs and other pension costs or recovery, expenses incurred outside the normal course of operations, proportion of total return swap, unrecoverable insurance costs, prior year sales tax provision, non-operating restructuring costs, extraordinary COVID-19 costs, foreign exchange gain or loss on cash held in foreign currency.
References to "ROIC" are to NOPAT divided by average invested capital for the last twelve month period (calculated as to shareholders’ equity plus long-term debt, obligations under leases, other long-term liabilities and derivative financial instrument liabilities less cash).
“Invested Capital” is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. Management believes that Invested Capital is an important measure in evaluating the Company’s financial position. The Company defines Invested Capital as total interest-bearing debt plus derivative liabilities plus equity less cash on hand.
“Book-to-Bill ratio” is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. The Company defines Book-to-Bill ratio as new firm orders and exercised options divided by new deliveries.
References to "Adjusted Net Earnings (Loss)" are to net earnings (loss) after adjusting for the after tax effects of certain non-recurring and/or non-operational related items that do not reflect the current ongoing cash operations of the Company including: fair value adjustments of total return swap, unrealized foreign exchange loss or gain, unrealized gain or loss on the interest rate swap, impairment loss on goodwill, portion of the total return swap realized, costs associated with assessing strategic and corporate initiatives, fair value adjustment to acquired subsidiary company's inventory and deferred revenue, equity settled stock-based compensation, gain or loss on disposal of property, plant and equipment, past service costs and other pension costs or recovery, recovery on currency transactions, expenses incurred outside the normal course of operations prior year sales tax provision, COVID-19 costs and non-operating restructuring costs .
References to "Adjusted Net Earnings (Loss) per Share" are to Adjusted Net Earnings (Loss) divided by the average number of Shares outstanding.
Management believes Adjusted EBITDA, ROIC, Free Cash Flow, Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) per Share are useful measures in evaluating the performance of the Company. However, Adjusted EBITDA, ROIC, Free Cash Flow, Adjusted Net Earnings (Loss) and Adjusted Earnings (Loss) per Share are not recognized earnings or cash flow measures under IFRS and do not have standardized meanings prescribed by IFRS. Readers of this press release are cautioned that ROIC, Adjusted Net Earnings (Loss) and Adjusted EBITDA should not be construed as an alternative to net earnings or loss or cash flows from operating activities determined in accordance with IFRS as an indicator of NFI’s performance, and Free Cash Flow should not be construed as an alternative to cash flows from operating, investing and financing activities determined in accordance with IFRS as a measure of liquidity and cash flows. A reconciliation of net earnings (loss) to Adjusted EBITDA, based on the Financial Statements, has been provided under the headings “Reconciliation of Net Loss to Adjusted EBITDA and Net Operating Profit After Taxes”. A reconciliation of net earnings (loss) to Adjusted Net Earnings (Loss) is provided under the heading “Reconciliation of Net Loss to Adjusted Net Loss”.
NFI's method of calculating Adjusted EBITDA, ROIC, Free Cash Flow, Adjusted Net Earnings and Adjusted Net Earnings per Share may differ materially from the methods used by other issuers and, accordingly, may not be comparable to similarly titled measures used by other issuers. Dividends paid from Free Cash Flow are not assured, and the actual amount of dividends received by holders of Shares will depend on, among other things, the Company's financial performance, debt covenants and obligations, working capital requirements and future capital requirements, all of which are susceptible to a number of risks, as described in NFI’s public filings available on SEDAR at www.sedarplus.ca.
"Liquidity" is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. The Company defines liquidity as cash on-hand plus available capacity under its Secured Facilities, without consideration given to the minimum banking liquidity requirement under the Secured Facilities.
“Backlog” value is not a recognized measure under IFRS and does not have a standardized meaning prescribed by IFRS. The Company defines backlog as the number of EUs in the backlog multiplied by their expected selling price.
References to NFI's geographic regions for the purpose of reporting global revenues are as follows: "North America" refers to Canada, United States, and Mexico; United Kingdom and Europe refer to the United Kingdom and Europe; and "Asia Pacific" or "APAC" refers to Hong Kong, Malaysia, Singapore, Australia, and New Zealand.
Forward-Looking Statements
This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws, which reflect the expectations of management regarding the Company’s future growth, financial performance and liquidity and the Company’s strategic initiatives, plans, business prospects and opportunities, including the repeat costs and remedies relating to the Battery Recall, the impact of and recovery from supply chain disruptions and plans to address them, the steps the Company plans to take to improve liquidity and the impact of tariffs, other trade measures and U.S. policy developments regarding federal vehicle funding. The words “believes”, “views”, “anticipates”, “plans”, “expects”, “intends”, “projects”, “forecasts”, “estimates”, “guidance”, “goals”, “objectives”, “targets” and similar words or expressions of future events or conditional verbs such as “may”, “will”, “should”, “could”, “would” are intended to identify forward-looking statements. These forward-looking statements reflect management’s current expectations regarding future events and the Company’s financial and operating performance and speak only as of the date of this press release. By their very nature, forward-looking statements require management to make assumptions and involve significant risks and uncertainties, should not be read as guarantees of future events, performance or results, and give rise to the possibility that management’s predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that the assumptions may not be correct and that the Company’s future growth, financial condition, ability to generate sufficient cash flow, maintain adequate liquidity and manage supply chain disruptions and the Company’s strategic initiatives, objectives, plans, business prospects and opportunities, will not occur or be achieved.
The Company continues to experience various global and regional supply chain and logistics challenges, inflationary price increases for parts, components and other inputs used in the manufacturing processes, as well as labour shortages. The Company is currently working through a Battery Call. The Company has taken and continues to take various steps to mitigate these issues (including the current North American seat supply issue and Battery Recall), but they continue to have a significant negative impact on the Company’s business, operating results, financial condition and liquidity. These issues may continue and/or worsen, including as the Company continues to ramp up production levels. While NFI has experienced significant improvement in overall supplier performance, the supply of certain parts and components continues to be challenged and may deteriorate, including with respect to other parts and components. There can be no assurance as to if or when production operations will return to pre-pandemic production rates or deliveries. Supply chain issues could also potentially expose the Company to liquidated damages penalties under certain transit bus and motor coach purchase contracts if it is unable to meet the applicable delivery deadlines under such contacts. While the Company is closely managing its liquidity, it is possible that various events (such as delayed deliveries and customer acceptances, delayed customer payments, supply chain issues, product recalls and warranty claims) could significantly impair the Company’s liquidity and there can be no assurance that the Company would be able to obtain additional liquidity when required in such circumstances. In addition, as the Company is in the process of ramping up production levels and an increasing percentage of the Company’s orders are ZEBs that have a higher manufacturing cost, the Company’s working capital requirements have increased compared to prior years. There can be no assurance that the Company will be able to maintain sufficient liquidity for an extended period or have access to additional capital when required in such circumstances and the Company’s financial performance and condition, cash flow and liquidity and its ability to maintain compliance with the covenants under its credit facilities may be impaired.
The level, type, coverage and duration of tariffs and other trade measures imposed by the US, Canada and China is fluidly evolving and may continue to change and evolve in unpredictable ways. The impact of tariffs and other trade measures on general economic conditions, customer demand and on the Company’s business is uncertain and may be significant. Such impacts may include general inflationary pressures as well as new and exacerbated supply chain disruptions leading to production inefficiencies, delivery delays and additional liquidity deterioration. It is impossible to predict the full impact on the Company of tariffs or other trade actions, and if they are in place for an extended period they may have a material adverse effect on the Company’s business, operating results, financial condition and liquidity and may result in the Company not achieving its finalized guidance. In addition, U.S. federal funding for transit buses and coaches, including electric vehicles, could potentially be significantly reduced as a result of the U.S. administration’s recent executive orders and potential policy changes. This could significantly impact the ability of U.S. transit agencies to purchase vehicles from the Company, which would likely have the most significant impact on purchases of electric vehicles. There can be no assurance as to the continuation or future amount of U.S. federal funding for transit bus and coach purchases.
Specific reference is made to the factors described above in this press release and in the section entitled “Risk Factors” in the Company’s Annual Information Form for a discussion of the factors that may affect forward-looking statements and information. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements and information. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that could cause actions, events or results not to be as anticipated, estimated or intended or to occur or be achieved at all. The forward-looking statements and information contained herein are made as of the date of this press release (or as otherwise indicated) and, except as required by law, the Company does not undertake to update any forward-looking statement or information, whether written or oral, that may be made from time to time by the Company or on its behalf. The Company provides no assurance that forward-looking statements and information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers and investors should not place undue reliance on forward-looking statements and information.
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