NFI Announces First Quarter Results

Core Insights - NFI Group Inc. reported a record backlog of $13.7 billion and significant improvements in revenue, adjusted EBITDA, and return on invested capital (ROIC) for Q1 2025, reaffirming its guidance for 2025 [1][4][20] Financial Performance - Deliveries for Q1 2025 totaled 1,028 equivalent units (EUs), a decrease of 9% year-over-year, while total deliveries over the last twelve months (LTM) increased by 3% to 4,448 EUs [3] - Revenue reached $841.4 million, reflecting a 16% increase compared to Q1 2024, with a gross margin of $94.0 million, up 36.3% year-over-year [3][6] - The company reported a net loss of $6.5 million, an improvement of 31% from the previous year, with adjusted net earnings of $2.9 million, a 119% increase year-over-year [3][6] - Adjusted EBITDA for Q1 2025 was $62.7 million, an increase of 84% year-over-year, while free cash flow improved to $4.4 million, a 121% increase [3][6] Operational Highlights - The company achieved the highest zero-emission bus deliveries in its history, with 33.9% of total deliveries being battery- and fuel cell-electric buses [4][6] - NFI added over 2,500 EUs to its backlog during the quarter, indicating strong demand in North American markets [4][6] - The total liquidity position at the end of Q1 2025 was $127.9 million, with a new $845 million credit agreement entered into in May 2025 to support liquidity growth [6][13] Market Outlook - Management anticipates improvements in revenue, gross profit, net earnings, adjusted EBITDA, free cash flow, and ROIC as the company executes its backlog and increases production of buses and coaches [14][20] - The company is well-positioned to meet growing demand for low and zero-emission buses and coaches, supported by its broad offering of propulsion-agnostic solutions [15][19] - NFI's UK and international business has faced slower demand compared to North America, prompting a review of production and overhead costs [16] Challenges and Responses - NFI continues to navigate seat supply disruptions affecting its North American transit business, maintaining lower production rates and working closely with suppliers to recover [17][18] - The company has seen improvements in overall supplier health, with a significant decline in high-risk suppliers, although challenges remain in seat supply performance [19] - NFI is taking actions to mitigate the impacts of U.S. and Canadian tariffs, leveraging localized production and regionalized service networks [21][22]