NFI Announces Second Quarter Results

Executive Summary

• NFI Group Inc. reported unaudited interim financial results for the second quarter of 2025, highlighting a $13.5 billion total backlog and significant improvements in liquidity and adjusted profitability metrics.
• The company completed a comprehensive refinancing transaction during the quarter, including a new $700 million revolving credit facility and a $600 million private offering of second lien secured notes, which improved total liquidity by $198.8 million.
• While reported net loss was impacted by $167.6 million in non-recurring items (including impairments and refinancing costs), Adjusted EBITDA increased 19.2% year-over-year to $70.8 million, and Return on Invested Capital (ROIC) improved to 7.9%.

Key Details

• Financial Performance (Q2 2025):
  • Revenue: $868.2 million (up 2.0% YoY).
  • Gross Profit: $116.2 million (up 14.6% YoY) with a margin of 13.4%.
  • Net Loss: $160.8 million ($1.35 per share), primarily driven by non-recurring items totaling $167.6 million.
  • Adjusted Net Earnings: $10.7 million ($0.09 per share).
  • Adjusted EBITDA: $70.8 million (up 19.2% YoY).
  • Free Cash Flow: $15.7 million.
  • ROIC: Increased to 7.9% from 3.5% in Q2 2024.
• Operational Metrics:
  • Deliveries: 1,076 equivalent units (EUs), with 30.9% being zero-emission buses (ZEBs).
  • Backlog: $13.5 billion total (6,082 firm EUs and 10,116 option EUs), up 14.4% YoY. ZEBs represent 35.3% of total backlog EUs.
  • Book-to-Bill Ratio: 119.9% on a last-twelve-month (LTM) basis, supported by 822 new EUs added in Q2.
  • Average EU Price in Backlog: $0.84 million (up 3.2% YoY).
• Refinancing Activities:
  • Completed a new four-year $700 million revolving credit facility (2025 First Lien Facility).
  • Private offering of $600 million aggregate principal amount of 9.250% second lien secured notes due 2030.
  • Net proceeds from the Second Lien Debt: $589.8 million.
  • Financial Impacts: $10.8 million pre-payment penalty, $26.0 million non-cash derecognition of derivative assets, and creation of a $19.4 million derivative asset.
  • Total Liquidity: $326.7 million, up $198.8 million from Q1 2025.
• Segment Results:
  • Manufacturing: Revenue increased $23.0 million (3.3% YoY). Net loss was $88.9 million, driven by $80.9 million intangible asset impairment, $10.0 million goodwill impairment, and $14.9 million restructuring charge at Alexander Dennis. Adjusted EBITDA improved by $18.7 million YoY.
  • Aftermarket: Revenue decreased 3.7% to $155.7 million. Net earnings decreased by $6.6 million YoY due to lower midlife program revenues.
• Guidance & Outlook:
  • Fiscal 2025 Guidance remains unchanged: Revenue $3.8–$4.2 billion; Adjusted EBITDA $320–$360 million; ZEBs 35–40% of manufacturing sales; ROIC 9–12%.
  • Management anticipates double-digit revenue and adjusted EBITDA growth for 2025.
  • Tariff Impacts: NFI is negotiating surcharges with customers to offset tariff costs on steel, aluminum, and international imports. Tariff-driven cost increases may be more difficult to offset in the private coach market.
  • Supply Chain: New seat supplier coming online ahead of schedule; ongoing engagement with challenged seat supplier expected to continue through H2.

Notable Quotes

• "The second quarter was a busy period across NFI as we strengthened our balance sheet and continued to execute on operational objectives to drive margin growth,” said Paul Soubry, President and Chief Executive Officer, NFI. “Completing our refinancing leaves us well positioned to deliver on our multi-year backlog, increase cash flow generation and lower total leverage.”
• “We’re encouraged by the improvements we’re seeing across our North American supply chain, including a new seat supplier coming online ahead of schedule in the second quarter. We remain actively engaged with our challenged seat supplier on their ongoing recovery which we expect will continue through the second half of the year,” Soubry continued.
• “While the operating environment remains fluid, based on our first half performance and current backlog we are confident in our ability to deliver our 2025 guidance that will see double digit revenue and adjusted EBITDA growth, alongside improved returns on capital and cash flow generation.”