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April 28, 2010
Winnipeg, Manitoba, Canada, April 28, 2010; New Flyer
Industries Inc. (TSX:NFI.UN) (“New Flyer” or the “Company”), the
leading manufacturer of heavy-duty transit buses in Canada and the
United States, was advised today that Ottawa’s City Council has
approved the purchase of 306 new articulated clean diesel buses for
approximately C$190 million. This approval includes the exercising of
80 options plus an additional 226 articulated buses under the existing
bus procurement contract between Ottawa and New Flyer. These
additional 226 buses are not recorded in New Flyer’s backlog as the
buses have been added by Ottawa to the contract. The new buses will
have the latest D60LFR enhanced design and will be outfitted with: a
2010 EPA compliant Cummins engine, a mini-hybrid cooling package, an
anti-graffiti package, smart bus technology for reliability monitoring
and an extended industry-leading warranty program.
This purchase allows the City of Ottawa to replace its older
articulated bus fleet with modern and fuel efficient D60LFR buses via
an innovative arrangement where New Flyer has provided incentive
pricing and has agreed to take in trade, OC Transpo’s existing fleet of
226 articulated buses. This fleet was originally built and sold by New
Flyer to The City of Ottawa and the current average age of these buses
is approximately nine years.
Key benefits of this agreement for Ottawa include: an estimated 26%
reduction in fuel consumption and an estimated 15% reduction in
maintenance costs, in addition to being an entirely new 60’ articulated
bus fleet for the citizens of Ottawa. Further, the upgraded propulsion
system saves approximately 1.98M Kgs of NOx and approximately 51.4K Kgs
of particulate over the next nine years. This is an estimated
reduction to the environmental footprint left by the buses of over 90%.
“This arrangement encompasses a number of groundbreaking commercial
features, and aligns very well with our strategy to provide Best Bus
Value and Support for Life” said New Flyer’s President and Chief
Executive Officer, Paul Soubry. “The new buses will be sold with an
extended warranty and will be equipped with smart bus technology (or an
advanced vehicle health monitoring system) which will allow New Flyer
to assist OC Transpo in optimizing fleet performance and reliability”.
While the price for the new buses offered to OC Transpo has been
reduced from previous orders, management anticipates that profitability
through bus sales, parts sales and used bus sales will provide an
appropriate total return to the Company through the life of the bus
contract.
New Flyer plans to refurbish the buses that are traded in at its
Arnprior, Ontario Service Center and will market the buses for re-sale
in both domestic and international markets. New Flyer will provide OC
Transpo with a trade-in credit for the used buses that can be applied
to New Flyer spare parts and service programs. “This allows the
Company to develop key intelligence on the maintenance, monitoring and
operation of New Flyer buses from the ground up, while operating in a
very close partnership with a substantial operator like OC Transpo”,
said Mr. Soubry.
The first buses are expected to enter production in July 2010, with
delivery of the new fleet anticipated to start in August 2010, and
completed delivery to occur within approximately one year. Management
does not anticipate increasing the Company’s production rate at its
facilities in Manitoba or Minnesota as a result of this award, “but
rather, it permits the Company to level load production” said Mr.
Soubry. “Timing of the deal will allow New Flyer to respond to the
significant U.S. order deferral that was experienced in 2009. This
award also presents the Company with the opportunity to reverse the
recent trend of a reduced average number of buses per customer order,
largely caused by the previously announced U.S. customer order deferral
and to pursue operational excellence goals and ensure the highest
quality”.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in
the United States and Canada. The Company’s three facilities -- in
Winnipeg, MB, St. Cloud, MN and Crookston, MN - are all ISO 9001, ISO
14001 and OHSAS 18001 certified. With a skilled workforce of over 2,000
employees, New Flyer is a technology leader, offering the broadest
product line in the industry, including drive systems powered by clean
diesel, LNG, CNG and electric trolley as well as energy-efficient
gasoline-electric and diesel-electric hybrid vehicles. All products are
supported with an industry-leading, comprehensive parts and service
network. The Company’s income deposit securities are traded on the
Toronto Stock Exchange under the symbol NFI.UN. Further information is
available on Company’s web site at www.newflyer.com.
Forward-Looking Statements
This press release may contain forward-looking statements relating to
expected future events and financial and operating results of New Flyer
and New Flyer Industries Canada ULC (“NFI ULC”) that involve risks and
uncertainties. 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. Actual results may differ materially from
management expectations as projected in such forward-looking statements
for a variety of reasons, including market and general economic
conditions and the other risks and uncertainties discussed in the
materials filed with the Canadian securities regulatory authorities and
available on SEDAR at www.sedar.com. Due to the potential impact of
these factors, New Flyer and NFI ULC disclaim any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, unless
required by applicable law.
For further information, please contact:
New Flyer Industries Inc.
Glenn Asham, Chief Financial Officer
Tel: 204-224-1251
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