NFI Group Announces Third Quarter 2019 Results

Summary of 2019 Q3 results compared to 2018 Q3:

• Overall US and Canada public Bid Universe increased by 28.7% from 2018 Q3 with active bids up 18.0% from 2019 Q2.
  
  
• NFI secured new orders of 1,035 EUs, an increase of 36.7% with a Last Twelve Months Book-to-Bill ratio of 90%.  Backlog of 11,594 EUs (valued at $5.5 billion) increased by 4.4%.
  
  
• Delivered a record 1,392 EUs in the quarter, an increase of 34.5%, resulting in revenue of $725.4 million, an increase of 19.8%.
  
  
• Adjusted EBITDA of $76.9 million increased by 9.5%.
  
  
• Free Cash Flow of $37.6 million and C$0.83 per Share, increased by 30.6% and 40.2% respectively. Dividends declared of C$26.5 million increased by 13.4%, representing a third quarter payout ratio of 53.2% and a current implied dividend yield of 5.7% at a Share price of $29.65
  
  
• Net loss of $1.0 million and loss per Share of $0.02 decreased by $38 million and $0.61 respectively, having been significantly impacted by an $11.6 million unwind of fair market value adjustments and $6.7 million of intangible asset amortization, both related to the acquired assets of ADL, plus $4.7 million in mark-to-market losses. 
  
  
• Adjusted Net Earnings of $15.0 million, or $0.24 per Share, which is normalized for $16.1 million of the non-cash adjustments impacting net earnings, decreased by 58.5%.

WINNIPEG, Nov. 12, 2019 /PRNewswire/ - (TSX:NFI) NFI Group Inc., ("NFI" or the "Company"), one of the world's leading independent bus manufacturers, today announced its financial results for 2019 Q3⁽¹⁾.  Readers are advised to view the unaudited interim condensed consolidated financial statements (the "Financial Statements") and the related Management's Discussion and Analysis (the "MD&A") that are available at the Company's website at:  https://www.nfigroup.com/investor-relations/performance-reports/ and under the Company's profile on www.sedar.com.

"We delivered a record 1,392 vehicles in the third quarter which resulted in our highest quarterly revenue ever, driven largely by our transformative acquisition of Alexander Dennis Limited. NFI is now a leading independent global bus and coach manufacturer with more than 105,000 vehicles in service and 9,000 team members," said Paul Soubry, President and Chief Executive Officer of NFI. "We have now stabilized our KMG parts and component manufacturing operations and commenced the reduction of excess vehicle work-in-progress inventory. The majority of vehicle deliveries impacted by the work-in-progress reduction plan are expected to be recovered in the fourth quarter of 2019 with some units now expected to be delivered in the first quarter of 2020. Our entire team is focused on ensuring we recover from the production and operational challenges we experienced in the first half of this year and expect a strong revenue and Adjusted EBITDA performance in the fourth quarter.  As we look into 2020, we expect the strength of our businesses to allow us to maintain leadership positions in all of our core markets, to continue generating strong free cash flow, and to focus on returning capital to shareholders.  We have seen stability in our total bid universe and, as anticipated, an increase in active bids – albeit for a smaller number of buses per contract as operators continue pilot or trial fleets of electric buses. Given the global transition to electric buses, we do expect to see continued price pressure in the near-term due to continuous product mix variation and increasing competition, which only reinforces our strategy to focus on scale, cost efficiency and competitiveness."  

Acquisition of Alexander Dennis Limited (ADL)

In order to provide context regarding ADL's operations, management has provided proforma Fiscal 2018, 2019 Q1 and 2019 Q2 (pre-and post-acquisition) within its MD&A. A brief summary of consolidated proforma year-over-year activity during 2019 Q3 is provided below.  

Revenues for 2019 Q3 decreased by $95.3 million compared to 2018 Q3 proforma and 2019 Q3 YTD proforma decreased by $198.6 million compared to 2018 Q3 YTD proforma. While NFI's legacy manufacturing business experienced a decline year-over-year due to lower heavy-duty transit and low-floor cutaway vehicle deliveries (discussed below), ADL also experienced a decrease in revenue during both periods due to lower activity in the Asia Pacific market, primarily in Hong Kong, and timing of deliveries in North America and the UK. 2018 Q3 Hong Kong activity was particularly elevated compared to 2019 Q3 due to the timing of deliveries to meet new emissions regulations.

ADL expects to have significantly higher activity during 2019 Q4 compared to 2018 Q4 as it fulfills its contracted order book and its performance is expected to be in line with NFI's investment case.

2019 Q3 Impact of the Transition to IFRS 16

Effective December 31, 2018, the Company adopted IFRS 16, the accounting standard which specifies how to recognize, present and disclose leases. The adoption of IFRS 16 primarily impacts NFI's gross margin, Adjusted EBITDA, net earnings and Adjusted Net Earnings, and the associated per common share ("Share") amounts, ROIC and several balance sheet accounts as reported in the Financial Statements and MD&A. The primary impacts of the transition on several of NFI's key financial metrics are summarized in the table below.

^{Totals may not add due to rounding.}

Management recommends readers review the Company's financial statements and MD&A for 2019 Q3 that provides further details on the impact of adoption of IFRS 16.  All other financial information provided for 2019 Q3 within this release is presented with the adoption for IFRS 16.

2019 Q3 Financial Results

Summarized financial results of the Company are as follows:

Manufacturing revenue for 2019 Q3 increased by $103.9 million, or 20.3%, compared to 2018 Q3 primarily driven by the acquisition of ADL and higher motor coach deliveries offset by lower transit bus and low-floor cutaway vehicle deliveries.  As previously reported, the Company experienced production and delivery challenges in the first half of 2019 ("2019 H1") as a result of new product launches at New Flyer and MCI, supply disruption of certain ARBOC chassis, extended start-up of KMG, the Company's new parts fabrication facility, external supply issues and lost production days due to inclement weather.  The result of these factors also led to a temporary growth in work-in-progress inventory ("WIP") during 2019 H1. The majority of the WIP is expected to be reduced in 2019 Q4 with some carryover to the first quarter of 2020 to account for the timing of deliveries.

Aftermarket revenue increased by $16.2 million, or 17.4%, compared to 2018 Q3 with the acquisition of ADL being the primary driver. Partially offsetting the increase were lower sales volumes within the legacy aftermarket business due to increased competitive pressure in the private motor coach market as well as fewer mid-life or fleet renewal programs.

Manufacturing gross margins for 2019 Q3 decreased by $25.5 million, or 32.4%, compared to 2018 Q3 primarily caused by a $20.2 million unwinding of fair value adjustments relating to the valuation of ADL assets and $9.1 million of intangible asset amortization both related to the acquisition of ADL. Without this impact, gross margins would have increased by $3.8 million, or 4.8%. In addition to the unwind, costs associated with production inefficiencies and WIP reduction efforts within the legacy heavy-duty transit and coach businesses also impacted gross margins. Aftermarket gross margins increased by $7.1 million, or 27.6%, compared to 2018 Q3 primarily due to the addition of ADL.

Manufacturing Adjusted EBITDA increased by $0.5 million, with the addition of ADL being offset by the previously mentioned impacts on vehicle deliveries and higher selling and general and administrative costs ("SG&A") from the addition of ADL. Aftermarket Adjusted EBITDA decreased by $0.8 million compared to 2018 Q3 due to higher SG&A costs from the addition of ADL.

Consolidated earnings before interest and income taxes ("EBIT") decreased by $35.6 million, or 63.7%, primarily driven by the impacts on gross margins. Without the purchase accounting adjustments from the acquisition of ADL, EBIT would have decreased by $6.3 million, or 11.3%. Partially offsetting these negative impacts were lower compensation expense as a result of reduced incentive compensation accruals.

Net loss of $1.0 million compared to net earnings of $37.0 million in 2018 Q3, with a net loss per Share of $0.02. In addition to the items that impacted EBIT, interest expense increased by $12.0 million, primarily from losses on the Company's interest rate derivatives of $1.6 million and higher average draws under the Company's credit facility, driven by the acquisition of ADL and higher working capital balances. Net earnings was also impacted by $3.1 million of unrealized foreign exchange losses.

Adjusted Net Earnings, which adds back the unwind of the fair value adjustment, plus mark-to-market losses, decreased by $21.2 million compared to 2018 Q3, primarily due to higher amortization costs on the intangible assets created from the acquisition of ADL.

Liquidity 

Free cash flow in 2019 Q3 increased by $8.8 million, or 30.6%, when compared to 2018 Q3 primarily due to higher Adjusted EBITDA, lower capital expenditures and lower income tax expense, partially offset by increased interest expense. Free cash flow per share of C$0.83 was up by 40.2%. Dividends declared increased by 13.0% in 2019 Q3 as a result of the increase in the annual dividend rate declared in March 2019, partially offset by the impact of repurchases under the Company's Normal Course Issuer Bid ("NCIB") during the second half of 2018 and 2019 Q1 which lowered the number of Shares outstanding. Management believes the current dividend rate has been established at a sustainable level.

NFI's liquidity position as at September 29, 2019 was $86.6 million a decrease from the position of $202.2 million at June 30, 2019. The decrease in liquidity primarily relates to the amount of capital returned to shareholders through dividends and changes in non-cash working capital primarily a result of seasonality and delivery disruption which increased WIP and is expected to be temporary in nature. Management believes these funds, together with share and debt issuances, other borrowings capacity and the cash generated from NFI's operating activities, will provide the Company with sufficient liquidity and capital resources to meet its current financial obligations as they come due, as well as provide funds for its financing requirements, capital expenditures, dividend payments and other operational needs for the foreseeable future.

Outlook

Management's Fiscal 2019 delivery guidance has been reduced to 5,490 EUs, a decrease of 170 EUs, or 3.0%, to reflect the impact of New Flyer and MCI's WIP reduction plan carrying over into the first quarter of 2020 and the timing of ARBOC medium-duty vehicle deliveries. This decrease is primarily a timing issue as the majority of the vehicles removed from the Company's revised delivery guidance are under contract and will be delivered in 2020. The cash impact of these delayed deliveries will be realized in 2020, net of any previously received progress payments. There have been no changes to ADL's anticipated 2019 deliveries. Management now expects the Company will deliver 2,020 EUs, or 36.8%, of its annual deliveries in the fourth quarter. Management notes that ADL vehicle revenue and gross margins vary significantly by geographic region and product type and recommends that readers review the adjusted ADL historical financial information provided within the MD&A for further context.

The Company's annual delivery schedule has an element of seasonality due to the nature of each unique market segment and the varied annual production and vacation schedule of each production facility.  With the addition of ADL, management now expects seasonality to become even more pronounced in the fourth quarter of the year.  

The North American heavy-duty transit market's active Bid Universe continued to grow in 2019 Q3, up by 18.0% from 2019 Q2 and 49.7% from 2018 Q3. Award activity for active competitions is expected to increase over the next 12 months. While the private motor coach market in North America has declined year-to-date in 2019, management expects strong private MCI motor coach deliveries in 2019 Q4. Overall, demand for low-floor cutaway and medium-duty buses remains encouraging with ARBOC backlog now at record levels.

The Company's transformative acquisition of ADL provides NFI with an additional product line in North America and an international platform for growth. ADL is the largest bus and coach provider in the UK and the global market leader in double deck buses with an established presence in numerous geographic jurisdictions.

Zero Emission Buses ("ZEBs") continue to be an area of growing focus, with the Company strengthening its leadership position.  ZEBs are now being built in all New Flyer transit bus factories, comprising 4% of New Flyer's heavy-duty transit backlog and representing a growing portion of the active bids in North America.  ADL's current ZEB offering includes the UK's leading double deck battery-electric vehicle and single-deck electric variants sold to the UK and New Zealand markets. In addition, ADL currently has two contracts in place for battery-electric double deck buses in North America to be delivered in 2020.  MCI continues the development and testing of its battery electric motor coaches (a J4500 and a D45 CRT LE) and ARBOC recently launched an electrification project for the Equess medium duty bus.

Management believes its turn-key solution of high-quality and reliable vehicles; infrastructure advisory, sourcing and installation services and unmatched aftermarket support makes NFI the partner of choice for customers exploring the addition of ZEBs to their fleet. In addition, the combination of NFI's electric vehicle expertise with ADL's global reach and existing customer partnerships is anticipated to generate long-term benefits.

NFI Parts continues to focus on numerous strategic initiatives to counter market pressures, competitive intensity and a declining operating fleet from the retirement of previously acquired NABI and Orion buses. These initiatives include additional focus on vendor managed inventory ("VMI") programs, an enhanced product offering and capitalizing on the implementation of a common IT platform.  In addition, NFI Parts has absorbed ARBOC's cutaway bus parts business which management believes will provide an additional revenue synergy. ADL's parts business has begun collaborating with NFI Parts and is focused on enhancing its online parts and services platform (AD 24) which provides industry leading aftermarket support to customers in the UK.  ADL Parts revenue is also expected to grow as ADL expands its installed base around the world.

Management is exploring numerous opportunities to combine ADL's strengths in engineering, sales, new product development and third-party assembly with NFI's expertise in operational excellence, insourcing, fabrication and systems management. Initial efforts are primarily aimed at the North American market where NFI seeks to optimize its product portfolio, customer strategy and geographic footprint. Management is pursuing numerous initiatives and investigating longer-term financial benefits.

In addition to these operational initiatives, NFI is working closely with ADL's leadership team to explore new market growth opportunities while continuing to maintain or expand market share in existing jurisdictions. ADL's 2018 contract win in Berlin is expected to provide meaningful financial benefit starting in 2021 and appears to be a platform for future European growth.

Management believes ADL's operations have less exposure to the potential implications of the UK withdrawing from the European Union (commonly referred to as "Brexit") than many of its peers within the automobile or specialty vehicle industries given it currently has minimal sales to other member states of the European Union. While the outcome of Brexit remains unclear, with several possible scenarios, management is taking steps to mitigate potential risks including: diversifying its supplier base, using global assembly partners, identifying components that may be impacted by tariffs or that may be delayed entry into the UK and building appropriate inventories, and continuing to use its hedging strategy to manage foreign exchange risk, which it has focused on since the original Brexit referendum in 2016.

Following the increase in total leverage from the unplanned growth in work in process in 2019 and required to complete the acquisition of ADL, management remains focused on deleveraging and anticipates combined financial results will enable it to return to its target of 2.0x to 2.5x net debt to EBITDA within 18 to 24 months without impacting the Company's dividend policy. Management is focused on decreasing WIP, improving deliveries and moving past production challenges while continuing to generate significant positive free cash flow, return cash to shareholders and realize meaningful value from investments made.

"As our Company looks forward to Fiscal 2020 we expect to see revenue and Adjusted EBITDA growth driven by a full-year of ADL's operations being reflected in the financial results, reduction of our excess inventory, delivery of firm vehicle orders and conversion of our option backlog," said Paul Soubry. "However, competitive pressures and product mix in the legacy heavy-duty transit and coach businesses are expected to have an adverse impact on margins. The headwinds are amplified in the short-term as numerous public transit agencies evaluate their ZEB transition plans resulting in more competitions with less units per contract at this time. Market data supports our view that the core fleet is aging and NFI is very well positioned to support transit agencies in North America, and the UK and Europe as they transition to ZEBs, and we expect to be the beneficiary of revenue and margin growth as that change takes place over the longer-term."

Corporate Social Responsibility

NFI's vision is to enable the future of mobility with innovative and sustainable solutions through the design and delivery of exceptional transportation solutions that are safe, accessible, efficient and reliable.  NFI is committed to employees, customers and shareholders, while being responsible to the environment and the communities that we live and work in.  NFI Group's full report can be accessed at: https://www.nfigroup.com/site-content/uploads/2019/03/Environmental- Social-Governance-Report-2019-web.pdf.

Conference Call

A conference call for analysts and interested listeners will be held on November 13, 2019 at 8 a.m. (ET). The call-in number for listeners is 888-231-8191, 647-427-7450 or 403-451-9838. A live audio feed of the call will also be available at:

https://event.on24.com/wcc/r/2113786/0FFA8FA3693971315720A1D42A50E496

A replay of the call will be available from 11:00 a.m. (ET) on November 13, 2019 until 11:59 p.m. (ET) on November 20, 2019. To access the replay, call 855-859-2056 or 416-849-0833 and then enter pass code number 1357288. The replay will also be available on NFI's web site at www.nfigroup.com.

About NFI Group

With 9,000 team members operating from more than 50 facilities across ten countries, NFI is a leading independent global bus manufacturer providing a comprehensive suite of mass transportation solutions under brands: New Flyer^® (heavy-duty transit buses), Alexander Dennis Limited (single and double-deck buses), Plaxton (motor coaches), MCI^® (motor coaches), ARBOC^® (low-floor cutaway and medium-duty buses), and NFI Parts™.  NFI vehicles incorporate the widest range of drive systems available including: clean diesel, natural gas, diesel-electric hybrid, and zero-emission electric (trolley, battery, and fuel cell).  In total, NFI now supports over 105,000 buses and coaches currently in service around the world. NFI common shares are traded on the Toronto Stock Exchange under the symbol NFI. Further information is available at www.nfigroup.com, www.newflyer.com, www.mcicoach.com, www.arbocsv.com, www.nfi.parts, www.alexander-dennis.com, and www.carfair.com

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 that do not reflect the current ongoing cash operations of the Company including: gains or losses on disposal of property, plant and equipment, unrealized foreign exchange losses or gains on non-current monetary items, fair value adjustment for total return swap, non-recurring transitional costs or recoveries relating to business acquisitions, equity settled stock-based compensation, gain on bargain purchase of subsidiary company, fair value adjustment to acquired subsidiary company's inventory and deferred revenue, past service costs, costs associated with assessing strategic and corporate initiatives and proportion of the total return swap realized. "Free Cash Flow" means net cash generated by operating activities adjusted for changes in non-cash working capital items, interest paid, interest expense, income taxes paid, current income tax expense, effect of foreign currency rate on cash, defined benefit funding, non-recurring transitional costs relating to business acquisitions, past service costs, costs associated with assessing strategic and corporate initiatives, defined benefit expense, cash capital expenditures, proportion of the total return swap realized, proceeds on disposition of property, plant and equipment, gain received on total return swap settlement, fair value adjustment to acquired subsidiary company's inventory and deferred revenue and principal payments on capital leases. References to "ROIC" are to net operating profit after taxes (calculated as Adjusted EBITDA less depreciation of plant and equipment and income taxes at the expected effective tax rate) divided by average invested capital for the last twelve-month period (calculated as to shareholders' equity plus long-term debt, obligations under finance leases, other long-term liabilities, convertible debentures and derivative financial instrument liabilities less cash). References to "Adjusted Net Earnings" are to net earnings 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, portion of the total return swap realized, costs associated with assessing strategic and corporate initiatives, non-recurring costs or recoveries relating to business acquisition, 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, gain on bargain purchase option, past service costs, recovery on currency transactions, prior year sales tax provision, gain on release of provision related to purchase accounting. References to "Adjusted Net Earnings per Share" are to Adjusted Net Earnings divided by the average number of Shares outstanding.

Management believes Adjusted EBITDA, Free Cash Flow, ROIC, Adjusted Net Earnings and Adjusted Earnings per Share are useful measures in evaluating the performance of the Company. However, Adjusted EBITDA, Free Cash Flow, ROIC, Adjusted Net Earnings and Adjusted Earnings per Share are not recognized earnings measures under IFRS and do not have standardized meanings prescribed by IFRS. Readers of this press release are cautioned that ROIC, Adjusted Net Earnings 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 and cash flows to Adjusted EBITDA, based on the Financial Statements, has been provided in the MD&A under the headings "Reconciliation of Net Earnings to Adjusted EBITDA" and "Reconciliation of Cash Flow to Adjusted EBITDA", respectively. A reconciliation of Free Cash Flow to cash flows from operations is provided under the heading "Summary of Free Cash Flow".  A reconciliation of net earnings to Adjusted Net Earnings is provided under the heading "Reconciliation of Net Earnings to Adjusted Net Earnings".

NFI's method of calculating Adjusted EBITDA, ROIC, Free Cash Flow, Adjusted Net Earnings and Adjusted 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.sedar.com.

Forward-Looking Statements

Certain statements in this press release are "forward-looking statements", which reflect the expectations of management regarding the Company's future growth, results of operations, performance and business prospects and opportunities. The words "believes", "anticipates", "plans", "expects", "intends", "projects", "forecasts", "estimates" and similar expressions are intended to identify forward looking statements. These forward-looking statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Such differences may be caused by factors which include, but are not limited to, funding may not continue to be available to the Company's customers at current levels or at all; the Company's business is affected by economic factors and adverse developments in economic conditions which could have an adverse effect on the demand for the Company's products and the results of its operations; currency fluctuations could adversely affect the Company's financial results or competitive position; interest rates could change substantially, materially impacting the Company's revenue and profitability; an active, liquid trading market for the Shares may cease to exist, which may limit the ability of shareholders to trade Shares; the market price for the Shares may be volatile; if securities or industry analysts do not publish research or reports about the Company or if their reports are inaccurate or unfavorable to the Company or its business, or if they adversely change their recommendations regarding the Shares or if the Company's results of operations do not meet their expectations, the Share price and trading volume could decline.  In addition, other risk factors may include entrance of new competitors; failure of the ratification of the United States-Mexico-Canada Agreement (USMCA) could be materially adverse to NFI; current requirements under "Buy America" regulations may change and/or become more onerous or suppliers' "Buy America" content may change; the implications from the exit of United Kingdom (UK) from the European Union (commonly referred to as "Brexit") could have a materially negative impact on the Company's UK business, operations and sales from the UK into the European Union and the Company may have to modify its UK business practices in order to attempt to mitigate such impact and such mitigation steps may not be effective; failure of the Company to comply with the disadvantaged business enterprise ("DBE") program requirements or the failure to have its DBE goals approved by the FTA; absence of fixed term customer contracts; exercise of options and customer suspension or termination for convenience; United States content bidding preference rules may create a competitive disadvantage; local content bidding preferences in the United States may create a competitive disadvantage; requirements under Canadian content policies may change and/or become more onerous; operational risk, dependence on limited sources or unique sources of supply; dependence on supply of engines that comply with emission regulations; a disruption, termination or alteration of the supply of vehicle chassis or other critical components from third-party suppliers could materially adversely affect the sales of certain of the Company's products; the Company's profitability can be adversely affected by increases in raw material and component costs as well as the imposition of tariffs and surtaxes on material imports; the Company may incur material losses and costs as a result of product warranty costs, recalls and remediation of buses; production delays may result in liquidated damages under the Company's contracts with its customers; catastrophic events may lead to production curtailments or shutdowns; the Company may not be able to successfully renegotiate collective bargaining agreements when they expire and may be adversely affected by labour disruptions and shortages of labour; the Company's operations are subject to risks and hazards that may result in monetary losses and liabilities not covered by insurance or which exceed its insurance coverage; the Company may be adversely affected by rising insurance costs; the Company may not be able to maintain performance bonds or letters of credit required by its contracts or obtain performance bonds and letters of credit required for new contracts; the Company is subject to litigation in the ordinary course of business and may incur material losses and costs as a result of product liability claims; the Company may have difficulty selling pre-owned coaches and realizing expected resale values; the Company may incur costs in connection with provincial, state or federal regulations relating to axle weight restrictions and vehicle lengths; the Company may be subject to claims and liabilities under environmental, health and safety laws; dependence on management information systems and cyber security risks; the Company's ability to execute its strategy and conduct operations is dependent upon its ability to attract, train and retain qualified personnel, including its ability to retain and attract executives, senior management and key employees; the Company may be exposed to liabilities under applicable anti-corruption laws and any determination that it violated these laws could have a material adverse effect on its business; the Company's risk management policies and procedures may not be fully effective in achieving their intended purposes; internal controls over financial reporting, disclosure controls and procedures; ability to successfully execute strategic plans and maintain profitability; development of competitive or disruptive products, services or technology; development and testing of new products; acquisition risk; third-party distribution/dealer agreements; availability to the Company of future financing; the Company may not be able to generate the necessary amount of cash to service its existing debt, which may require the Company to refinance its debt; the Company's substantial consolidated indebtedness could negatively impact the business; the restrictive covenants in the Company's credit facilities could impact the Company's business and affect its ability to pursue its business strategies; payment of dividends is not guaranteed; a significant amount of the Company's cash is distributed, which may restrict potential growth; NFI is dependent on its subsidiaries for all cash available for distributions; future sales or the possibility of future sales of a substantial number of Shares may impact the price of the Shares and could result in dilution; if the Company is required to write down goodwill or other intangible assets, its financial condition and operating results would be negatively affected; income tax risk, investment eligibility and Canadian federal income tax risks; the effect of comprehensive U.S. tax reform legislation on the NF Holdings and its U.S. subsidiaries (the "NF Group"), whether adverse or favorable, is uncertain; certain U.S. tax rules may limit the ability of NF Group to deduct interest expense for U.S. federal income tax purposes and may increase the NF Group's tax liability; certain financing transactions could be characterized as "hybrid transactions" for U.S. tax purposes, which could increase the NF Group's tax liability. NFI cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in NFI's press releases, Annual Information Form and materials filed with the Canadian securities regulatory authorities which are available on SEDAR at www.sedar.com.

Although the forward‑looking statements contained in this press release are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward‑looking statements, and the differences may be material. These forward‑looking statements are made as of the date of this press release and NFI assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws.

SOURCE NFI Group Inc.

Related Links

http://www.newflyer.com