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Solid quarter for New Flyer

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Winnipeg bus builder New Flyer Industries recorded solid increases in revenue, operating profit and net profit during the fourth quarter in what one analyst said was "arguably the best quarter of results we have seen from the company."

Results released show total revenue in the fourth quarter of $381.2 million, up 83.2 per cent compared with the fourth quarter of 2012. EBITDA (earnings before interest, taxes, depreciation and amortization) was $36.8 million -- up 155 per cent -- and net profit was $13.7 million, up 9.7 per cent.

Much of the increases are due to the incremental additional work associated with the acquisition of the Orion parts business and the NABI bus and parts businesses that both occurred in 2013.

The increase in fourth-quarter revenue primarily resulted from a 64.1 per cent increase in total bus deliveries compared with the same period in 2012 as well as a sales mix with higher average selling prices. Fiscal 2013 revenue, EBITDA and net earnings were $1.2 billion, $95 million and $27 million, respectively, compared with the same measures in 2012 of $865 million, $61 million and $9.3 million, respectively.

Trevor Johnson, an analyst with National Bank Financial, said in a report, "New Flyer Industries reported arguably the best quarter of results we have seen from the company, with average bus-selling prices robust, manufacturing margins the best in years and building off of last quarter's momentum, and aftermarkets up dramatically given NFI's commitment to expanding this vertical's footprint."

Management did warn it anticipates the first quarter 2014 EBITDA will be significantly less than the fourth quarter of 2013 and will likely also be lower than the first quarter of 2013.

The company estimates its market share of buses delivered in 2013 was about 43 per cent, an increase from its estimated market share of 32 per cent for 2012.

The increase was primarily as a result of the acquisition of NABI in June 2013 and the assignment of the remaining Orion bus sales contracts prior to its departure in December 2012.

New Flyer shares closed down seven cents in fairly heavy trading to $11.40, still near the 52-week high of $11.85.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 21, 2014 B8

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