The following is a summary of the NFI Group Inc. (NFYEF) Q4 2023 Earnings Call Transcript:
Financial Performance:
NFI Group reported a 143% sequential quarterly increase in new orders with year-over-year bus and coach deliveries up by 19%.
Quarterly revenue was up by 15% with adjusted EBITDA rising by 642%. Gross margins rose to 11% due to a strong contribution from the aftermarket business.
The aftermarket segment generated $551 million in revenue and $120 million of adjusted EBITDA, fuelled by higher aftermarket sales in North America.
The company's backlog is robust at US$7.9 billion with over 10,500 equivalent units and a year-over-year increase of 22% in the average selling price for vehicles.
NFI reported significant increases in EBITDA and cash flow, largely due to operational efficiencies within their parts distribution business.
Total liquidity rose to $188 million, driven by improved cash flows.
Net loss reduced by $150 million, primarily driven by higher deliveries, revenue, and adjusted EBITDA.
For fiscal 2024, NFI Group anticipates double-digit revenue growth, triple-digit adjusted EBITDA growth, and improved free cash flow.
Business Progress:
A significant improvement in supplier performance was observed alongside plans to expand production in 2024 using a phased approach to avoid additional costs.
Due to changes in competitive dynamics, the company may look for improved competitive positioning in the US market.
NFI is part of a task force created to recommend actions to support competitive and stable bus manufacturing capacity in the US.
The company initiated the production of electric buses as a step towards zero-emission vehicles.
Work is being undertaken to reduce the number of offline buses significantly and improve operations in their bus assembly stations.
NFI Group's backlog remains strong at 10,586 units, expected to extend till 2028.
The company anticipates a surge in zero-emission buses deliveries, leading to a slightly longer cash collection cycle.
For 2024, NFI anticipates ZEBs to constitute 30% to 35% of total deliveries, with this number expected to grow to 40% in 2025.
The company does not anticipate significant debt repayments in 2024 as they ramp up production.
More details: NFI GROUP INC IR
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