NFI provides update on supply chain disruptions and 2021 guidance
NFI Group Inc. announced that, due to the impact of escalating supply chain disruptions and logistics delays resulting from the ongoing COVID-19 pandemic, it is lowering its financial guidance for 2021.
“Since the beginning of the COVID-19 pandemic, the entire NFI team has been working diligently to manage through its multiple waves and the associated impacts on our customers, supply partners and operations,” said Paul Soubry, President and CEO, NFI. “During recent weeks, we have experienced a rapid deterioration in availability of critical parts, components and chassis caused primarily by increasing global supply chain challenges that have created bottlenecks and disruptions across the entire industry. These disruptions have significantly increased since our earnings announcement on August 4, 2021, and we have experienced decreased key parts allocation to NFI from certain suppliers.
“In response to these disruptions, we have made the prudent, yet difficult, decision to temporarily reduce new vehicle input rates through the additional idling of certain facilities and adjusting production in others. These temporary actions will assist in controlling costs and preserving cash flows until supply availability and delivery reliability improve. We anticipate that the general seasonality of our business combined with these mitigation efforts will result in significant cash flow in the fourth quarter, with projected year-ending liquidity of more than $400 million. In addition, we are fortunate that the majority of the vehicles impacted by these disruptions will not result in lost sales as most are contractually sold and are now planned for delivery in 2022.
“We view these global supply chain issues as a temporary phenomenon of the pandemic and our longer-term outlook for the industry and the Company remains strong, driven by the tailwinds of historic government funding for public transit, record new public bidding activity, private market recovery and our multi-year backlog. We do, however, expect these supply chain challenges to continue throughout the first half of 2022. We remain confident in our previously announced 2025 target for Adjusted EBITDA of $400 to $450 million.” said Soubry.