NFI Group Inc.

Good day and thank you for standing by. Welcome to the NFI 2024 fourth quarter and full year financial results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen King, Vice President, Strategy Investor Relations. Please go ahead.

Thank you, Kevin. Good morning, everyone, and welcome to our call. Joining me today are Paul Subri, our President and Chief Executive Officer, and Brian Dusnip, our Chief Financial Officer. On today's call, we will give an update on our quarterly and annual results, highlighting year-over-year improvement across numerous financial metrics, the strong demand environment for our products, and our record backlog. We'll also provide an update on the operating environment, including our assessment of tariff and funding dynamics, and our near and long-term outlook. This call is being recorded, and a replay will be made available shortly. We will be referring to a presentation that can be found in the investor section of our website. As we move through the slides via the webcast link, we will call out the slide number as we go for those on the phone. Starting with slide two, we provide our cautionary or forward-looking statements, and we note that certain financial measures referenced today are not recognized earnings measures and do not have standardized meanings prescribed by International Financial Reporting Standards, or IFRS. We advise listeners to view our press releases and other public filings on CDAR for more details. In the appendix of this presentation, we have provided a list of key terms and definitions that will be used on today's call, including zero-emission buses, or ZEBs, and equivalent units, or EUs. A reminder that NFI statements are presented in U.S. dollars, the company's reporting currency, and all amounts referred to are in U.S. dollars, unless otherwise noted. Slides 3 and 4 provide a brief overview of our company. NFI is a global, independent bus and motor coach mobility solutions provider. We offer over 60 bus and coach models with a wide range of propulsion types, including clean diesel, natural gas, diesel-electric hybrid, battery electric, trolley electric, and hydrogen fuel cell electric. We hold leading market share positions in North American transit and coach markets, and more detailed information is available in our materials. Slide 5 provides some brief insight into NFI's business mix and our leadership position in the transition to zero-emission propulsion. I will now pass the call over to Paul to provide an overview of NFI's results for the fourth quarter and fiscal 2024.

Thank you, Stephen, and good morning, everyone. Thanks for joining us today. So before we get into the details of our presentation today, reflecting Q4 and our fiscal 2024 results, I'd like to reflect on a few key points to set up the stage. During the past year, we generated significant growth across our business, and we continue to advance both our operational and financial recovery. Yes, we faced specific supply-related disruption, which impacted our results in the second half of 2024, but we responded with a detailed and aggressive action plan. We've experienced performance improvement alongside other actions in progress. We've supplied diversification, and that supports our forecasted growth for 2025 and beyond. We achieved several major milestones in fiscal 2024, including our highest annual orders ever, the largest backlog in our history, and record financial results in our aftermarket segment. Our strategic decisions to be propulsion agnostic, utilize localized production and distribution facilities, and to offer customized solutions continues to position us well in a very fluid macro environment. I'd like to acknowledge the efforts, dedication, ingenuity, and hard work of our entire team, who helped us deliver in 2024 and who continue to provide industry-leading support for our customers. I'm now on slide seven. Slide seven is a summary of our Q4 and fiscal 2024 results. Starting with demand, we had new orders in the quarter of 1,904 equivalent units, up 81% year over year. This contributed to our highest annual orders ever. with a total backlog of 9,489 EUs in 2024, which is a 55% increase from our 2023 numbers. Our backlog comprised of both firm orders and options continues to grow at a very strong pace and hit a record $12.8 billion at the end of 2024, totaling 15,135 equivalent units. This growth continues to be primarily driven by North American public transit operators, where the number of bidders on new RFPs has reduced substantially. And in many cases, NFI is the sole bidder or one of two bidders. And for some competitions, we are the only provider of certain models and propulsion types. Our full year book-to-bill ratio remained strong at 121.4%, primarily driven by these increased orders I just described. Our option backload conversion rate also showed continued recovery, reaching 76% on an LTM basis. Our financial results demonstrated our continued recovery and growth. We achieved a 77% year-over-year increase in quarterly adjusted EBITDA, contributing to a $145.2 million improvement on a fiscal year basis. We achieved net earnings of approximately $19 million, a gain of $21 million year-over-year. After continuous years of cost optimization efforts, expansion of our parts basket and focused efforts on alternative part identification, our aftermarket segment continued to deliver exceptional performance in an exceptional quarter with $157.1 million in revenue and $32.8 million of adjusted EBITDA, up 16% and 11% year-over-year respectively, contributing to yet another record year. Reducing working capital and enhancing liquidity remains a key focus for us. While we continue to manage through seat supply disruptions at New Flyer, which also affects NFI parts, which elevated our inventory balances, we did see positive impacts from the benefits of public customer-improved contracting terms and conditions. This included prepayments and milestone payments incorporated into many bus contracts. Overall, we saw a small decline in liquidity during the quarter, reflecting the puts and takes of these various items. On slide eight, we show the continued improvement we've managed to recover in overall supply chain health. The chart shows our high and moderate risk and high impact suppliers. As we've moved through the end of 2024 and the first few months of 2025, we continue to see overall improvement. There were numerous actions we've taken to drive these improvements, including active supplier development and monitoring programs. We currently have just three companies that are considered high risk, high impact, down from 50 at the peak in 2022, with medium risk suppliers continuing to drop as well. On slide nine, we detail one of those high risk suppliers and the most disruptive supplier in 2024, our primary North American transit bus seat provider. Let me take a step back and explain how we got here. This is a long time supplier that has been a valued partner for us for over 20 years and consistently performed during that time. Like their entire industry, the supplier had to decrease production during the pandemic and the supply chain held that continued from that. As markets recovered in 2023, they increased production to match rising demand for buses. This happened in the same time as they were in the process of moving to a new upgraded facility, and they also saw a rise in turnover of key staff. These factors led to their operations falling far behind schedule, resulting in significant missed deliveries to a variety of bus OEMs in the third quarter of 2024. Since then, NFI has worked with the seat supplier, and in coordination with other impacted customers of of them we created an advisory council and assisted in the development execution of recovery plan this includes dedicated on-site support from nfi's fabrication team the engagement of external consultants and adjustments to our production schedule to lower demand in the period to allow this supplier to recover we've also on board as another buy america compliant seed supplier who starts delivering seats early in the second half of 2025 to diversify our supply base It is important to note that changing suppliers once a bus has been engineered is on the production line or semi-complete and off the line. It's not an option on each bus order to change suppliers. The graph on the right shows the improvement in the number of offline new flyer buses missing seats in our inventory. This peaked at the end of November and has since come down to levels just below where we were at our third quarter earnings call. Based on year-to-date performance and the ongoing action plan, we anticipate sustained improvement in seat supply performance, as they are projecting to be delivering seats to the production lines on schedule at the end of the second quarter, while we're also committing to lowering the inventory of the buses that are missing seats. Now, turning to slide 10, we review our fourth quarter deliveries. We had another record quarter of low floor cutaway bus deliveries, up 62%, while transit bus and coach deliveries were both slightly down in the quarter. Transit deliveries reflect the impact of this seat supply disruption, with planned deliveries in 2024 Q4 pushed into 2025. In total, the seat supply disruption led to a loss of approximately 100 equivalent units of planned fourth quarter deliveries. Quarterly production rates were also lower as we managed our finishing activities on buses that were missing seats. Coach deliveries reflect a reduction in the fourth quarter public and private sales, with a carryover inventory expected to be sold in 2025. Offsetting this decline in deliveries was an 11% year-over-year increase in the average selling price of heavy-duty transit buses and a 25% year-over-year increase in the average price of a motor coach. This also coincided with the improved manufacturing gross margins. I'll now turn it over to Brian Dusnip to discuss our results in more detail. Brian? Thanks, Paul.