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NFI Group Inc. — Interim / Quarterly Report 2025
May 9, 2025
45662_rns_2025-05-08_4404119d-ca49-4802-90ba-42e7805a5aa1.pdf
Interim / Quarterly Report
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Unaudited Interim Condensed Consolidated Financial Statements of
NFI GROUP INC.
March 30, 2025
TABLE OF CONTENTS
| Topic | Page |
|---|---|
| Unaudited Interim Condensed Consolidated Statements of Net Loss and Total Comprehensive Loss | 3 |
| Unaudited Interim Condensed Consolidated Statements of Financial Position | 4 |
| Unaudited Interim Condensed Consolidated Statements of Changes in Equity | 5 |
| Unaudited Interim Condensed Consolidated Statements of Cash Flows | 6 |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements | 7-19 |
NFI GROUP INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS AND TOTAL COMPREHENSIVE LOSS
13-weeks ended March 30, 2025 ("2025 Q1") and 13-weeks ended March 31, 2024 ("2024 Q1")
(in thousands of U.S. dollars except per share figures)
| 2025 Q1 | 2024 Q1 | |
|---|---|---|
| Revenue (note 17) | $ 841,420 | $ 722,749 |
| Cost of sales (note 4) | 747,460 | 653,800 |
| Gross Profit | 93,960 | 68,949 |
| Sales, general and administration costs and other operating expenses | 63,234 | 57,030 |
| Foreign exchange (gain) loss | (370) | 1,268 |
| Earnings from operations | 31,096 | 10,651 |
| Gain on disposition of property, plant and equipment and right-of-use asset | 150 | 97 |
| Impairment loss on intangible assets | — | (1,028) |
| Unrealized foreign exchange gain on monetary items | 1,106 | 5,491 |
| Earnings before interest and income taxes | 32,352 | 15,211 |
| Interest and finance costs | ||
| Interest on long-term debt | 22,251 | 21,860 |
| Interest on convertible debt | 3,079 | 3,113 |
| Interest on senior unsecured debt (note 9) | 775 | 2,183 |
| Accretion in carrying value of long-term debt (note 10) | 3,019 | 2,291 |
| Accretion in carrying value of convertible debt (note 12) | 2,095 | 1,981 |
| Accretion in carrying value of senior unsecured debt (note 9) | 73 | 101 |
| Interest expense on lease liability | 2,732 | 2,126 |
| Other interest and bank charges | 3,938 | 4,968 |
| Fair market value loss (gain) on prepayment option of second lien debt (note 11) | 2,298 | (2,546) |
| Fair market value gain on interest rate swap (note 16b) | (168) | (1,453) |
| Fair market value gain on cash conversion option (note 12) | (1,734) | (3,970) |
| 38,358 | 30,654 | |
| Loss before income tax expense | (6,006) | (15,443) |
| Income tax expense (recovery) (note 8) | 480 | (6,029) |
| Net loss for the period | $ (6,486) | $ (9,414) |
| Other comprehensive loss | ||
| Actuarial (loss) gain on defined benefit pension plan - this item will not be reclassified subsequently to profit or loss | (877) | 5,321 |
| Unrealized foreign exchange gain (loss) on translation of foreign operations - this item will not be reclassified subsequently to profit | 2,677 | (1,636) |
| Total comprehensive loss for the period | (4,686) | (5,729) |
| Net loss per share (basic) (note 14) | $ (0.05) | $ (0.08) |
| Net loss per share (diluted) (note 14) | $ (0.05) | $ (0.08) |
The accompanying notes are an integral part of the consolidated financial statements.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 30, 2025
(in thousands of U.S. dollars)
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Assets | ||
| Current | ||
| Cash | $ 107,985 | $ 49,557 |
| Accounts receivable (note 3, 16e) | 580,426 | 489,731 |
| Inventories (note 4) | 895,548 | 959,633 |
| Income tax receivable | 541 | 1,980 |
| Other current asset (note 5, 16a) | — | 6,937 |
| Prepaid expenses and deposits | 24,986 | 25,342 |
| 1,609,486 | 1,533,180 | |
| Property, plant and equipment | 197,944 | 192,670 |
| Right-of-use asset | 107,750 | 108,092 |
| Derivative financial instruments (note 11, 16a, b) | 10,049 | 12,347 |
| Goodwill and intangible assets | 956,949 | 956,954 |
| Accrued benefit asset | 7,975 | 9,299 |
| Other long-term assets (note 5, 16b) | 36,056 | 43,670 |
| Deferred tax assets | 67,103 | 57,920 |
| $ 2,993,312 | $ 2,914,132 | |
| Liabilities | ||
| Current | ||
| Accounts payable and accrued liabilities | 632,091 | 627,536 |
| Income tax payable | 15,590 | 4,640 |
| Derivative financial instruments (note 16a, b) | 2,130 | 1,340 |
| Current portion of long-term liabilities (note 6) | 314,063 | 290,413 |
| Senior unsecured debt (note 9) | 19,651 | 19,609 |
| 983,525 | 943,538 | |
| Accrued benefit liability | 2,439 | 2,511 |
| Obligations under leases | 112,973 | 112,699 |
| Deferred compensation obligation | 1,078 | 1,671 |
| Deferred revenue | 28,151 | 29,323 |
| Provisions (note 7) | 59,569 | 48,037 |
| Deferred tax liabilities | 29,990 | 33,315 |
| Derivative financial instruments (note 12, 16a, b) | 1,045 | 2,855 |
| Senior unsecured debt (note 9) | 31,400 | 30,431 |
| Long-term debt (note 10) | 643,872 | 610,237 |
| Second lien debt (note 11) | 174,202 | 173,741 |
| Convertible debentures (note 12) | 221,540 | 218,020 |
| $ 2,289,784 | $ 2,206,378 | |
| Commitments and contingencies (note 18) | ||
| Shareholders' equity | ||
| Share capital (note 13) | 1,241,538 | 1,241,397 |
| Stock option and restricted share unit reserve | 14,570 | 14,249 |
| Accumulated other comprehensive income | 12,536 | 10,736 |
| Deficit | (565,115) | (558,628) |
| $ 703,529 | $ 707,754 | |
| $ 2,993,312 | $ 2,914,132 |
The accompanying notes are an integral part of the consolidated financial statements.
4
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the period ended March 30, 2025
(in thousands of U.S. dollars)
| Share Capital | Stock Option and Restricted Share Unit Reserve | Accumulated Other Comprehensive Income | Deficit | Total Shareholders' Equity | |
|---|---|---|---|---|---|
| Balance, December 31, 2023 | $ 1,240,163 | $ 13,673 | $ 4,409 | $(555,332) | $ 702,913 |
| Net loss | — | — | — | (9,414) | (9,414) |
| Other comprehensive income | — | — | 3,685 | — | 3,685 |
| Equity transaction cost | 7 | — | — | — | 7 |
| Share-based compensation, net of deferred income taxes | — | 389 | — | — | 389 |
| Shares issued | 217 | (217) | — | — | — |
| Balance, March 31, 2024 | $ 1,240,387 | $ 13,845 | $ 8,094 | $(564,746) | $ 697,580 |
| Net gain | — | — | — | 6,118 | 6,118 |
| Other comprehensive income | — | — | 2,642 | — | 2,642 |
| Equity transaction cost | — | — | — | — | — |
| Share-based compensation, net of deferred income taxes | — | 1,364 | — | — | 1,364 |
| Shares issued | 1,010 | (960) | — | — | 50 |
| Balance, December 29, 2024 | $ 1,241,397 | $ 14,249 | $ 10,736 | $(558,628) | $ 707,754 |
| Net loss | — | — | — | (6,486) | (6,486) |
| Other comprehensive income | — | — | 1,800 | — | 1,800 |
| Equity transaction cost | — | — | — | — | — |
| Share-based compensation, net of deferred income taxes | — | 461 | — | — | 461 |
| Shares issued (note 13) | 140 | (140) | — | — | — |
| Balance, March 30, 2025 | $ 1,241,537 | $ 14,570 | $ 12,536 | $(565,114) | $ 703,529 |
The accompanying notes are an integral part of the consolidated financial statements.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
13-weeks ended March 30, 2025 ("2025 Q1") and 13-weeks ended March 31, 2024 ("2024 Q1")
(in thousands of U.S. dollars)
| 2025 Q1 | 2024 Q1 | |
|---|---|---|
| Operating activities | ||
| Net loss for the period | $ (6,486) | $ (9,414) |
| Income tax expense (recovery) | 480 | (6,029) |
| Depreciation of property, plant and equipment | 10,744 | 13,056 |
| Amortization of intangible assets | 7,437 | 8,181 |
| Impairment loss on intangible assets | — | 1,028 |
| Share-based compensation | 372 | 389 |
| Interest and finance costs recognized in profit or loss | 37,793 | 37,171 |
| Unrealized foreign exchange gain on monetary items | (1,106) | (5,491) |
| Foreign exchange loss on cash held in foreign currency | 506 | 1,563 |
| Loss (gain) on fair value adjustment for cash conversion option | 565 | (6,516) |
| Gain on disposition of property, plant and equipment | (150) | (97) |
| Defined benefit expense | 490 | 943 |
| Defined benefit funding | (717) | (826) |
| Cash generated by operating activities before non-cash working capital items and interest and income taxes paid | 49,928 | 33,958 |
| Changes in non-cash working capital items (note 15) | 23,748 | 9,573 |
| Cash generated by operating activities before interest and income taxes paid | 73,676 | 43,531 |
| Interest paid | (33,616) | (33,181) |
| Income taxes recovered | 740 | 3,005 |
| Net cash generated by operating activities | 40,800 | 13,355 |
| Financing activities | ||
| Repayment of obligations under lease | (5,372) | (6,509) |
| Proceeds from revolving credit facilities | 26,482 | 23,934 |
| Share issuance recovery | — | 7 |
| Net cash generated by financing activities | 21,110 | 17,432 |
| Investing activities | ||
| Acquisition of intangible assets | (2,206) | (2,856) |
| Proceeds from disposition of property, plant and equipment | — | 720 |
| Disposition of long-term restricted deposits | 5,130 | — |
| Acquisition of property, plant and equipment | (5,900) | (8,212) |
| Net cash used in investing activities | (2,976) | (10,348) |
| Effect of foreign exchange rate on cash | (506) | (1,563) |
| Increase in cash | 58,428 | 18,876 |
| Cash — beginning of period | 49,557 | 49,615 |
| Cash — end of period | $ 107,985 | $ 68,491 |
The accompanying notes are an integral part of the consolidated financial statements.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
- CORPORATE INFORMATION
1.1 Corporate information
NFI Group Inc. ("NFI") was incorporated on June 16, 2005 under the laws of the Province of Ontario (NFI and its subsidiaries collectively referred to as the "Company"). The Company is a leading independent global bus manufacturer providing a comprehensive suite of mass transportation solutions under brands: New Flyer® (heavy-duty transit buses), Alexander Dennis ("AD") (single and double-deck buses), MCI® (motor coaches), ARBOC® (low-floor cutaway and medium-duty buses) and NFI Parts™ (aftermarket parts sales). NFI's common shares (the "Shares") are listed on the Toronto Stock Exchange ("TSX") under the symbol "NFI". NFI's convertible debentures are listed on the TSX under the symbol "NFI.DB".
These unaudited interim condensed consolidated financial statements (the "Statements") were approved by NFI's board of directors (the "Board") on May 8, 2025.
- SUMMARY OF MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of these Statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.
2.1 Statement of Compliance
The Statements are unaudited and have been prepared in accordance with IAS® Standards ("IAS") 34, Interim Financial Reporting, and do not include all the information required for annual financial statements.
2.2 Basis of preparation
The Statements were prepared on a going concern basis in accordance with IFRS® Accounting Standards which require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenue and expenses. Actual results may differ from these estimates.
In preparing these Statements, the significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied by the Company in its audited consolidated financial statements as at and for the 52-week period ended December 29, 2024 ("Fiscal 2024").
2.3 Principles of consolidation
The Statements include the accounts of the Company's subsidiaries.
Subsidiaries are entities over which NFI has control, where control is achieved when NFI: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. NFI holds 100% of the voting rights in, and therefore controls, all of its subsidiaries.
Inter-company transactions between subsidiaries are eliminated on consolidation.
2.4 Fiscal periods
| Period from December 30, 2024 to December 28, 2025 ("Fiscal 2025") | Period from January 1, 2024 to December 29, 2024 ("Fiscal 2024") | |||||
|---|---|---|---|---|---|---|
| Period End Date | # of Calendar Weeks | Period End Date | # of Calendar Weeks | |||
| Quarter 1 | March 30, 2025 | ("2025 Q1") | 13 | March 31, 2024 | ("2024 Q1") | 13 |
| Quarter 2 | June 29, 2025 | ("2025 Q2") | 13 | June 30, 2024 | ("2024 Q2") | 13 |
| Quarter 3 | September 28, 2025 | ("2025 Q3") | 13 | September 29, 2024 | ("2024 Q3") | 13 |
| Quarter 4 | December 28, 2025 | ("2025 Q4") | 13 | December 29, 2024 | ("2024 Q4") | 13 |
| Fiscal year | December 28, 2025 | 52 | December 29, 2024 | 52 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
2. SUMMARY OF MATERIAL ACCOUNTING POLICIES (Continued)
2.5 Functional and presentation currency
The Company operates with multiple functional currencies. The Statements are presented in U.S. dollars as this presentation is most meaningful to financial statement users. References to “$” are to U.S. dollars, references to “C$” are to Canadian dollars and references to “£” are to British pounds sterling (“GBP”). For those subsidiaries with different functional currencies, exchange rate differences arising from the translation of items that form part of the net investment in the foreign operation are recorded in unrealized foreign exchange gain (loss) on translation of foreign operations in other comprehensive loss.
2.6 Standards issued but not yet adopted
IFRS 18 - Presentation and Disclosure in Financial Statements
IFRS 18 sets out requirements for the presentation and disclosure of information in the consolidated financial statements to help ensure they provide relevant information that faithfully represents the Company's assets, liabilities, equity, income and expenses. IFRS 18 replaces IAS 1 - Presentation of Financial Statements once effective. Initial adoption of the requirements under IFRS 18 will be obligatory for annual reporting periods on or after January 1, 2027.
3. ACCOUNTS RECEIVABLE
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Trade, net of allowance for doubtful accounts (note 16e) | $ 542,475 | $ 449,081 |
| Other | 37,951 | 40,650 |
| $ 580,426 | $ 489,731 |
In the normal course of its business, the Company has entered into facilities with certain financial institutions whereby it can sell, without credit recourse, eligible receivables to such financial institutions. As at March 30, 2025 trade receivables of $12.5 million were derecognized under these facilities. Accounts receivables are derecognized under this agreement as financial assets when the rights to receive cash flows have been transferred and substantially all of the risks and rewards of the asset have been transferred.
4. INVENTORIES
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Raw materials | $ 349,652 | $ 394,521 |
| Work in process | 438,646 | 477,398 |
| Finished goods | 107,249 | 87,714 |
| $ 895,547 | $ 959,633 | |
| 2025 Q1 | 2024 Q1 | |
| --- | --- | --- |
| Cost of inventories recognized as expense and included in cost of sales | $ 702,004 | $ 597,271 |
| Write-down of inventory to net realizable value in cost of sales | 1,145 | 853 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
5. OTHER LONG-TERM ASSETS
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Restricted deposit(s) (note 16b) | $ 32,870 | $ 46,999 |
| Long-term accounts receivable | 3,186 | 3,608 |
| Less: Current portion of restricted deposit(s) | — | (6,937) |
| $ 36,056 | $ 43,670 |
Long-term restricted deposit(s) is collateral for certain of the Company's letters of credit.
On March 22, 2024, the Company entered into a contribution agreement with Manitoba Development Corporation ("MDC"), pursuant to in which the Company received CAD$10 million on December 6, 2024, for the purpose of adding to its Canadian production capabilities to allow for all Canadian build of transit buses. In accordance with IAS 7.48, the Company is required to disclose restricted cash and cash equivalent balances relating to the agreement.
6. CURRENT PORTION OF LONG-TERM LIABILITIES
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Deferred revenue | $ 242,775 | $ 220,601 |
| Provisions (note 7) | 51,123 | 49,062 |
| Deferred compensation obligation | 3,509 | 3,939 |
| Obligations under leases | 16,656 | 16,811 |
| $ 314,063 | $ 290,413 |
7. PROVISIONS
The Company's insurance risk retention provision is based on insurance risk which the Company has not mitigated with third party insurance.
The Company generally provides its customers with a base warranty on the entire vehicle, a corrosion warranty on the related structure and in some situations a defect warranty on batteries, beyond what is provided by the battery original equipment manufacturer.
The other category includes the restructuring provision consisting of costs associated with the closure and termination of the lease in respect of the Guildford, UK facility operated by AD, which is expected to be terminated in May 2025. It also includes a provision for the costs in relation to the announced redundancy of up to 160 jobs at the Scottish facilities and onerous contracts when the unavoidable costs of meeting the contract are greater than the economic benefits expected to be received under it.
| Insurance Risk Retention | Warranty | Other | Total | |
|---|---|---|---|---|
| December 31, 2023 | $ 30,429 | $ 63,158 | $ 2,432 | $ 96,019 |
| Additions | 15,014 | 69,607 | 7,757 | 92,378 |
| Amounts used/realized | (12,956) | (68,949) | (7,344) | (89,249) |
| Unused provision | 80 | — | (1,167) | (1,087) |
| Unwinding of discount and effect of changes in the discount rate | — | (138) | — | (138) |
| Exchange rate differences | 10 | (816) | (18) | (824) |
| December 29, 2024 | $ 32,577 | $ 62,862 | $ 1,660 | $ 97,099 |
| Additions | 13,749 | 26,898 | 2,330 | 42,977 |
| Amounts used/realized | (3,092) | (23,065) | (3,315) | (29,472) |
| Unwinding of discount and effect of changes in the discount rate | — | (24) | — | (24) |
| Exchange rate differences | (2) | 271 | (157) | 112 |
| 43,232 | 66,942 | 518 | 110,692 | |
| Less current portion (note 6) | 2,224 | 48,381 | 518 | 51,123 |
| March 30, 2025 | $ 41,008 | $ 18,561 | $ — | $ 59,569 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
8. INCOME TAX EXPENSE (RECOVERY)
The income tax expense for 2025 Q1 was $0.5 million compared to a recovery of $6.0 million in 2024 Q1. The increased income tax expense is primarily due to increased profitability.
The Effective Tax Rate ("ETR") for 2025 Q1 was (8.0%) and the ETR for 2024 Q1 was 39.0%. The 2025 Q1 ETR was detrimentally impacted by the non-recognition of deferred tax assets associated with restricted interest in the UK, and non-deductible foreign exchange losses.
Income tax expense recognized in the unaudited interim condensed consolidated statement of net loss for 2025 Q1 does not include any amount related to BEPS Pillar Two ("Pillar Two") income taxes (2024 not applicable).
Pillar Two is not expected to have a material impact on the Company's tax expense.
9. SENIOR UNSECURED DEBT
On January 20, 2023, the Company finalized agreements with MDC for a C$50 million debt facility, for general corporate purposes, and with Export Development Canada ("EDC") for two credit facilities of up to $150 million, to support supply chain financing ("supply chain financing facility") for $50 million and surety and performance bonding requirements for new contracts ("Guarantee Facility") for up to $100 million.
In August 2023, as part of the Company's refinancing plan ("Refinancing Plan"), both the MDC facility and EDC supply chain financing facility were extended to April 30, 2026. The EDC bonding support facility (note 28c) has a one-year term for each new contract, subject to annual renewals. Additionally, $25 million was repaid to EDC on the supply chain financing facility as a permanent reduction.
On January 10, 2024, the Company amended its agreement with EDC to increase the size of the Guarantee Facility to $125 million. The amended Guarantee Facility was made up of an Account Performance Security Guarantee ("PSG") up to $50 million and Surety Reinsurance Support up to $75 million.
In April 2024, MDC and the Company entered into an amended agreement on its existing Senior Unsecured Debt Facility reducing the fixed interest rate to 0% per annum.
On July 17, 2024, NFI entered into an amended agreement with EDC to increase the size of its Guarantee Facility from $125 million to $145 million. The amended Guarantee Facility is made up of a PSG of up to $90 million and Surety Reinsurance Support up to $55 million.
In February 2025, NFI renewed the existing agreement with EDC.
The EDC agreement bears interest at a rate equal to adjusted term SOFR plus an applicable margin to that rate.
On November 29, 2024, a $5 million mandatory repayment was made on the EDC facility in accordance with the terms of the agreement.
| Face Value | Unamortized Transaction Costs | Net Book Value March 30, 2025 | Net Book Value December 29, 2024 | |
|---|---|---|---|---|
| MDC | $ 36,080 | $ — | $ 36,080 | $ 34,683 |
| Unamortized interest benefit | (4,680) | — | (4,680) | (4,252) |
| EDC | 20,000 | 349 | 19,651 | 19,609 |
| Less: current portion of senior unsecured debt | (20,000) | (349) | (19,651) | (19,609) |
| $ 31,400 | $ — | $ 31,400 | $ 30,431 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
10. LONG-TERM DEBT
| Face Value | Unamortized Transaction Costs | Net Book Value March 30, 2025 | Net Book Value December 29, 2024 | |
|---|---|---|---|---|
| First lien North America (“NA”) revolving credit facility, Secured (“NA Revolving Facility”) | $ 210,000 | $ 6,237 | $ 203,763 | $ 172,392 |
| First lien NA term loan, Secured (“NA Non-Revolving Facility”) | 400,000 | — | 400,000 | 400,000 |
| First lien UK revolving credit facility, Secured (“UK Revolving Facility”) | 18,730 | 391 | 18,339 | 17,336 |
| First lien UK term loan, Secured (“UK Non-Revolving Facility”) | 20,710 | — | 20,710 | 20,516 |
| Gain on debt modification | (4,768) | — | (4,768) | (5,795) |
| Government of Canada Loan | 6,985 | 1,157 | 5,828 | 5,788 |
| $ 651,657 | $ 7,785 | $ 643,872 | $ 610,237 |
The NA Revolving Facility and the NA Non-Revolving Facility (together referred to as the "North American Facility") have a total borrowing limit of $761 million, which includes a $150 million letter-of-credit facility.
There was $89.4 million of outstanding letters-of-credit drawn against the North American Facility at March 30, 2025. The North American Facility bears interest at a rate equal to the SOFR or a U.S. base rate for loans denominated in U.S. dollars and a Canadian prime rate or bankers' acceptance rate for loans denominated in Canadian dollars, plus an applicable margin to those rates, and matures on April 30, 2026.
The UK Revolving Facility and the UK Non-Revolving Facility (together referred to as the "UK Facility") have a total borrowing limit of £30.4 million to support AD's operations in the UK. Amounts drawn under the UK Facility bear interest at a rate equal to Sterling Overnight Index Average ("SONIA") plus an applicable margin. The UK Facility matures on April 30, 2026.
On August 25, 2023, the Company completed a comprehensive refinancing plan which included amendments to both UK and NA revolving credit facilities.
The Company entered into an agreement for up to C$10 million in interest-free financing through the Government of Canada to support the MCI Winnipeg facility enhancements and zero-emission product development and growth. The financing matures on March 1, 2030.
11. SECOND LIEN DEBT
| Face Value | Unamortized Transaction Costs | Net Book Value March 30, 2025 | Net Book Value December 29, 2024 | |
|---|---|---|---|---|
| Second Lien Debt | $ 182,540 | $ 8,338 | $ 174,202 | $ 173,741 |
| Prepayment Option (note 16b) | (10,049) | — | (10,049) | (12,347) |
| $ 172,491 | $ 8,338 | $ 164,153 | $ 161,394 |
The second lien debt financing is secured against all of the Company's assets, and bears interest at an annual coupon of 14.5%, payable semi-annually on January 2 and July 2 of every year commencing on January 2, 2024. The second lien debt facility matures on August 1, 2028.
Prior to the second anniversary of the debt facility, the Company can exercise an option to prepay a portion of the remaining principal at 106% of the face value (note 16). Prior to the third anniversary, the Company can exercise its option to prepay a portion of the remaining principal at 103% of the face value. An option to prepay the remaining principal at par is available from the third anniversary onwards.
At inception, the prepayment option was recognized as a derivative asset with a fair value of $2.1 million. At March 30, 2025, the asset was revalued at $10.0 million. A fair market value loss of $2.3 million was recorded on the Company's unaudited interim condensed consolidated statement of net loss and total comprehensive loss.
The second lien debt is financed by funds and accounts managed by Coliseum Capital Management LLC.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
12. CONVERTIBLE DEBENTURES
On December 2, 2021, NFI completed a public offering of C$300 million aggregate principal of convertible debentures (the "Debentures") and an additional C$38 million aggregate principal of Debentures were issued on December 14, 2021, pursuant to the partial exercise of the over-allotment option, bearing interest at a rate of 5% per annum, payable semi-annually on January 15 and July 15 commencing on July 15, 2022. The Debentures will mature on January 15, 2027 (the "Maturity Date").
The Debentures may be converted in whole or in part from time to time at the holder's option into 30.1659 Shares for each C$1,000 principal amount of Debentures ("Conversion Price"), representing a Conversion Price of approximately C$33.15 per Share, prior to maturity and subject to adjustment in certain circumstances.
NFI has the option to settle the conversion in either Shares or cash (the "Cash Conversion Option"), with the Cash Conversion Option determined to be a financial liability. The fair value of the Debentures and Cash Conversion Option are classified as separate liabilities. The Debenture component will accrete to its final redemption amount of C$338 million less all conversions, at the Maturity Date at an effective interest rate over the five-year term of the Debentures.
| Face Value | Unamortized Transaction Costs | Net Book Value March 30, 2025 | Net Book Value December 29, 2024 | |
|---|---|---|---|---|
| Convertible Debt | $ 225,116 | $ 3,576 | $ 221,540 | $ 218,020 |
| Cash Conversion Option (note 16b) | 696 | — | 696 | 2,345 |
| $ 225,812 | $ 3,576 | $ 222,236 | $ 220,365 |
13. SHARE CAPITAL
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Authorized - Unlimited | ||
| Issued - 119,050,979 Common Shares (December 29, 2024: 119,035,071) | $ 1,241,538 | $ 1,241,397 |
The following is a summary of changes to the issued and outstanding Shares during the period:
| Shares | Number (000s) | Net Book Value |
|---|---|---|
| Balance - December 29, 2024 | 119,035 | 1,241,397 |
| Stock options exercised | 7 | 55 |
| Director Restricted Share Units (“Director RSU”) exercised | 9 | 86 |
| Balance - March 30, 2025 | 119,051 | 1,241,538 |
14. LOSS PER SHARE
| 2025 Q1 | 2024 Q1 | |
|---|---|---|
| Net loss attributable to equity holders | $ (6,486) | $ (9,414) |
| Weighted average number of Shares in issue | 119,043,590 | 118,972,157 |
| Weighted average number of Shares for diluted earnings per Share | 119,043,590 | 118,972,157 |
| Net loss per Share (basic) | $ (0.0545) | $ (0.0791) |
| Net loss per Share (diluted) | $ (0.0545) | $ (0.0791) |
Basic loss per Share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of Shares outstanding during the period.
Diluted loss per Share is calculated using the same method as basic loss per Share except that the average number of Shares outstanding includes the potential dilutive effect of convertible debentures, outstanding stock options, and Director RSUs granted by the Company, as determined by the treasury stock method.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
15. SUPPLEMENTAL CASH FLOW INFORMATION
Changes in non-cash working capital items
| Cash inflow (outflow) | 2025 Q1 | 2024 Q1 |
|---|---|---|
| Accounts receivable | $ (90,696) | $ 375 |
| Other short-term asset | 6,937 | — |
| Income tax receivable | (11,785) | (399) |
| Inventories | 60,413 | (26,952) |
| Prepaid expenses and deposits | 355 | (1,943) |
| Accounts payable and accrued liabilities | 4,557 | 31,507 |
| Income tax payable | 10,951 | — |
| Deferred revenue | 21,002 | 5,411 |
| Provisions | 13,593 | 2,070 |
| Other | 8,421 | (496) |
| $ 23,748 | $ 9,573 |
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
(a) Fair value measurement of financial instruments
The Company has made the following classifications:
| Cash | Fair value through profit or loss |
|---|---|
| Restricted deposit | Fair value through profit or loss |
| Receivables | Amortized cost |
| Deposits | Amortized cost |
| Accounts payables and accrued liabilities | Amortized cost |
| Convertible Debt | Amortized cost |
| Other long-term liabilities | Amortized cost |
| Long-term debt | Amortized cost |
| Second lien debt | Amortized cost |
| Derivative financial instruments | Fair value through profit or loss |
(b) Fair value measurement of financial instruments
The Company categorizes its fair value measurements of financial instruments recorded at fair value according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company's valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:
Level 1 - fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.
Level 2 - fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets, inputs that are observable that are not prices (such as interest rates and credit risks) and inputs that are derived from or corroborated by observable market data.
Level 3 - fair value measurements using significant non-market observable inputs. These include valuations for assets and liabilities that are derived using data, some or all of which is not market observable data, including assumptions about risk.
The following table presents the carrying amounts and fair values of financial liabilities and financial assets, including their levels in the fair value hierarchy. The table excludes fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)
| March 30, 2025 | |||
|---|---|---|---|
| Fair value level | Carrying amount | Fair value | |
| Financial assets recorded at fair value | |||
| Cash | Level 1 | $ 107,985 | $ 107,985 |
| Restricted deposit(s) (note 5) | Level 1 | 32,870 | 32,870 |
| Prepayment Option (note 11) | Level 2 | 10,049 | 10,049 |
| Derivative financial instrument assets - long term | $ 10,049 | $ 10,049 | |
| Financial liabilities recorded at fair value | |||
| Foreign exchange forward contracts | Level 2 | 2,130 | 2,130 |
| Derivative financial instrument liabilities - current | $ 2,130 | $ 2,130 | |
| Interest Rate Swap | Level 2 | 349 | 349 |
| Cash Conversion Option (note 12) | Level 2 | 696 | 696 |
| Derivative financial instrument liabilities - long term | $ 1,045 | $ 1,045 | |
| December 29, 2024 | |||
| --- | --- | --- | --- |
| Fair value level | Carrying amount | Fair value | |
| Financial assets recorded at fair value | |||
| Cash | Level 1 | $ 49,557 | $ 49,557 |
| Restricted deposit(s) (note 5) | Level 1 | 46,999 | 46,999 |
| Prepayment Option (note 11) | Level 2 | 12,347 | 12,347 |
| Derivative financial instrument assets - long term | $ 12,347 | $ 12,347 | |
| Financial liabilities recorded at fair value | |||
| Foreign exchange forward contracts | Level 2 | 1,340 | 1,340 |
| Derivative financial instrument liabilities - current | $ 1,340 | $ 1,340 | |
| Interest Rate Swap | Level 2 | 510 | 510 |
| Cash Conversion Option (note 12) | Level 2 | 2,345 | 2,345 |
| Derivative financial instrument liabilities - long term | $ 2,855 | $ 2,855 |
(c) Risk Management
At March 30, 2025, the Company had $58.1 million of foreign exchange forward contracts to buy currencies in which the Company operates (U.S. dollars, Canadian dollars, or GBP). These foreign exchange contracts range in expiry dates from April to June 2025. The related liability of $2.8 million (December 29, 2024: $1.3 million) is recorded on the statements of financial position as a current derivative financial instruments liability and the corresponding change in the fair value of the foreign exchange forward contracts is recorded in the unaudited interim condensed consolidated statements of net loss and the total comprehensive loss.
On January 26, 2024, the Company entered into an agreement for a new interest rate swap to hedge its exposure to changing interest rates. The contract had a notional value of $500 million until October 25, 2024, and thereafter a notional value of $450 million until its expiry on April 25, 2025. The swap carries an interest rate of 4.6%.
(d) Liquidity Management
The Company's principal sources of funds are cash generated from its operating activities, share and other issuances and borrowing capacity remaining under the North American Facility and UK Facility (collectively the "Secured Facilities").
The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities when due. At March 30, 2025, the Company had a cash balance of $108.0 million (December 29, 2024: $49.6 million), $610 million drawn under the North American Facility due in 2026 (December 29, 2024: $581 million), and $89.4 million of outstanding
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)
letters of credit (December 29, 2024: $80.5 million). As at March 30, 2025 the Company had $39.4 million drawn under the UK Facility (December 29, 2024: $38.2 million). The total liquidity position as at March 30, 2025 is $127.9 million. In addition, as at March 30, 2025 the Company had $39.9 million of the letters of credit outstanding outside of the North American Facility. The North American Facility has a total borrowing limit of $761 million, which includes a $150 million letter-of-credit facility. The UK Facility has a total borrowing limit of £30.4 million.
The details of the covenants under the Secured Facilities are as follows:
| Total Leverage Ratio^{1} | Interest Coverage Ratio^{2} | Minimum Banking Liquidity^{4} | Senior Secured Net Leverage Ratio^{3} | |
|---|---|---|---|---|
| 2025 Q1 | <4.75x | >1.75x | Waived | <3.50x |
| 2025 Q2 | <4.25x | >2.00x | $50,000 | <3.25x |
| 2025 Q3 | <4.25x | >2.25x | $50,000 | <3.25x |
| 2025 Q4 | <3.75x | >2.50x | $50,000 | <3.00x |
- Total Leverage Ratio ("TLR") is calculated as aggregate indebtedness of the Company not including the Debentures and certain non-financial products, but including any senior unsecured or second lien indebtedness, less unrestricted cash and cash equivalents up to a maximum of $50 million, divided by Adjusted EBITDA (calculated on a trailing twelve-month basis).
- Interest Coverage Ratio ("ICR") is calculated as the same trailing twelve month Adjusted EBITDA as the TLR divided by trailing twelve-month interest expense on the Secured Facilities, the Debentures, any senior unsecured or second lien indebtedness and other interest and bank charges.
- Senior Secured Net Leverage will include the Secured Facilities and is calculated as indebtedness with respect to those facilities, less unrestricted cash and cash equivalents up to a maximum of $50 million, divided by Adjusted EBITDA (calculated on a trailing twelve-month basis).
- In 2025 Q1, the Company obtained a waiver for the $50 million liquidity requirement under its senior secured facility providing access to those funds if required.
The calculation of the banking liquidity position, without consideration given to the minimum banking liquidity requirements under the Secured Facilities at March 30, 2025 is provided below.
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Banking Liquidity Position | $ 127,905 | $ 126,800 |
| Total Leverage Ratio (must be less than 4.75) | 3.86 | 4.37 |
| Senior Secured Net Leverage Ratio (must be less than 3.50) | 2.74 | 3.09 |
| Interest Coverage Ratio (must be greater than 1.75 [2024: must be greater than 1.25) | 1.76 | 1.51 |
Compliance with financial covenants under the Secured Facilities is reported quarterly to the Board. Other than the requirements imposed by letters of credit collateral (note 5) and borrowing agreements, the Company is not subject to any externally imposed capital requirements. Capital management objectives are reviewed on an annual basis or when strategic capital transactions arise. As at March 30, 2025, the Company was in compliance with all covenant requirements.
Under the terms of the Secured Facilities, the Company is not permitted to declare or pay dividends, until certain financial conditions exist. Currently dividends have been suspended and future decisions on the resumption of dividend payments will be dependent on financial performance and compliance with Secured Facilities covenants.
The following table outlines the maturity analysis of the undiscounted cash flows of certain non-financial liability and committed leases as at March 30, 2025:
| Total | 2025 | 2026 | 2027 | 2028 | 2029 | Post 2029 | |
|---|---|---|---|---|---|---|---|
| Leases | $ 209,657 | $ 20,030 | $ 23,427 | $ 21,116 | $ 13,808 | $ 11,104 | $ 120,173 |
| Accrued benefit liability | 2,788 | 2,788 | |||||
| $ 212,445 | $ 22,818 | $ 23,427 | $ 21,116 | $ 13,808 | $ 11,104 | $ 120,173 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
- FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)
(e) Credit risk
Financial instruments in an asset position, which potentially subject the Company to credit risk and concentrations of credit risk, consist principally of cash, accounts receivable and derivative financial instruments. Management has assessed that the credit risk associated with accounts receivable is mitigated by the significant proportion for which the counterparties are well-established transit authorities, which are government entities in North America.
| March 30, 2025 | December 29, 2024 | |
|---|---|---|
| Current, including holdbacks | $ 509,723 | $ 444,869 |
| Past due amounts but not impaired | ||
| 1 - 60 days | 52,598 | 28,531 |
| Greater than 60 days | 19,140 | 17,366 |
| Less: Allowance for doubtful accounts | (1,035) | (1,035) |
| Total accounts receivables, net | $ 580,426 | $ 489,731 |
As at March 30, 2025, there was no amount that would otherwise be past due or impaired whose terms have been renegotiated.
(f) Capital management
The Company's objectives in managing capital are to deploy capital to provide an appropriate return to shareholders and to maintain a capital structure that provides the flexibility to take advantage of growth and development opportunities, maintain existing assets, meet financial obligations and enhance the value for the shareholders. The capital structure of the Company consists of cash, long-term debt, other long-term liabilities and shareholders' equity. The Company manages capital to ensure an appropriate balance between debt and equity. In order to maintain or adjust its capital structure, the Company may from time to time raise additional capital from various sources, including capital markets.
- SEGMENT INFORMATION
The Company has two reportable segments which are the Company's strategic business units: Manufacturing Operations and Aftermarket Operations. The strategic business units offer different products and services, and are managed separately because they require different technology, marketing strategies, and operations. For each of the strategic business units, the Company's President and CEO reviews internal management reports on a monthly basis.
The Manufacturing Operations segment derives its revenue from the design, manufacture, service and support of new transit buses, motor coaches, medium-duty, cutaway buses, and installation of infrastructure for electric vehicles and the sales of fiberglass reinforced polymer components. Based on management's judgment and applying the aggregation criteria in IFRS 8.12 - Operating segments, the Company's bus/coach manufacturing operations and medium-duty/cutaway manufacturing operations fall under a single reportable segment. Aggregation of these operating segments is based on the segments having similar economic characteristics with similar long-term average returns, products and services, production methods, distribution and regulatory environment.
The Aftermarket Operations segment derives its revenue from the sale of aftermarket parts for transit buses, coaches and medium-duty/cutaway buses, both for the Company's and third party products.
There is no inter segment revenue. Intercompany revenues do occur but are eliminated on consolidation and thus, are not presented in the Statements. Unallocated items in the consolidated earnings before income taxes primarily include unrealized foreign exchange gains or losses, interest and finance costs and corporate overhead costs.
The unallocated total assets of the Company primarily include cash, certain intangible assets, and derivative financial instruments. Corporate assets that are shared by both operating segments are allocated fully to the Manufacturing Operations segment.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
17. SEGMENT INFORMATION (Continued)
Segment information about earnings (loss) and assets is as follows:
| 2025 Q1 | ||||
|---|---|---|---|---|
| Manufacturing Operations | Aftermarket Operations | Unallocated | Total | |
| Revenue from external customers | $ 688,868 | $ 152,552 | — | $ 841,420 |
| Operating costs and expenses | 681,142 | 125,813 | 40,471 | 847,426 |
| Earnings (loss) before income tax recovery | 7,726 | 26,739 | (40,471) | (6,006) |
| Total assets | 2,158,667 | 517,285 | 317,360 | 2,993,312 |
| Addition of capital expenditures | 5,890 | 9 | — | 5,899 |
| Addition of intangibles assets | 2,204 | — | — | 2,204 |
| Indefinite-life intangible assets | 246,455 | 18,684 | — | 265,139 |
| Goodwill | 223,778 | 190,110 | — | 413,888 |
| 2024 Q1 | ||||
| --- | --- | --- | --- | --- |
| Manufacturing Operations | Aftermarket Operations | Unallocated | Total | |
| Revenue from external customers | $ 562,885 | $ 159,864 | — | $ 722,749 |
| Operating costs and expenses | 582,272 | 127,080 | 28,840 | 738,192 |
| (Loss) earnings before income tax recovery | (19,387) | 32,784 | (28,840) | (15,443) |
| Total assets | 1,937,653 | 506,900 | 299,911 | 2,744,464 |
| Addition of capital expenditures | 9,034 | 231 | — | 9,265 |
| Addition of intangibles assets | 2,856 | — | — | 2,856 |
| Indefinite-life intangible assets | 244,503 | 18,531 | — | 263,034 |
| Goodwill | 223,451 | 189,222 | — | 412,673 |
The Company's revenue by geography is summarized below:
| 2025 Q1 | 2024 Q1 | |
|---|---|---|
| North America | $ 709,741 | $ 562,620 |
| UK and Europe | 122,738 | 149,323 |
| Asia Pacific | 8,941 | 10,806 |
| Total | $ 841,420 | $ 722,749 |
The Company's disaggregated manufacturing revenue by major product type is provided below. The Aftermarket operations revenue does not have similarly disaggregated categories.
| 2025 Q1 | 2024 Q1 | |
|---|---|---|
| Transit buses | $ 550,358 | $ 449,479 |
| Motor coaches | 97,194 | 87,625 |
| Medium-duty and cutaway buses | 23,572 | 17,755 |
| Pre-owned coach | 3,713 | 3,235 |
| Infrastructure solutions36 | 10,933 | 2,713 |
| Fiberglass reinforced polymer components | 3,098 | 2,078 |
| Manufacturing revenue | $ 688,868 | $ 562,885 |
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
- COMMITMENTS AND CONTINGENCIES
(a) In the normal course of business, the Company receives notice of potential legal proceedings or is named as a defendant in legal proceedings, including those that may be related to negligence, product liability, wrongful dismissal and other employment-related matters, contractual disputes or personal injury. Many claims are covered by the Company's insurance policies. Management does not currently expect any of the current claims to have a material adverse effect on the Company's financial position, results of operations or cash flows.
(b) Through the normal course of operations, the Company has indemnified the surety companies providing surety bonds ("surety bond") required under various contracts with customers. In the event that the Company fails to perform under a contract and the surety companies incur a cost on a surety bond, the Company is obligated to repay the costs incurred in relation to the claim up to the value of the bond.
The Company's guarantee under each bond issued by the surety companies expires on completion of obligations under the customer contract to which the bond relates. The estimated maturity dates of the surety bonds outstanding at March 30, 2025 range from December 2026 to December 2039.
At March 30, 2025, outstanding surety bonds guaranteed by the Company totaled $362.1 million (December 29, 2024: $312.7 million). The Company has not recorded any liability under these guarantees, as management believes that no material events of default exist under any contracts with customers.
(c) The Company has a letter of credit sub-facility of $150.0 million as part of the North American Facility (December 29, 2024: $150.0 million). As at March 30, 2025, letters of credit totaling $89.4 million (December 29, 2024: $80.5 million) remain outstanding as security for contractual obligations of the Company under the North American Facility.
The EDC guarantee facility in the amount of $145 million consists of the PSG up to $90 million and the Surety Reinsurance Support up to $55 million.
The PSG program under the EDC guarantee facility is in place to cover a standby letter of credit or letter of guarantee (in each case an "LC"), required as part of a collateral package provided to support a surety facility where the new bonding capacity is a minimum of at least twice the face value of the LC. The PSG and Surety Reinsurance Support programs must only be used to support surety bonds required under contracts entered into by the Company, and where such surety bonds are bid bonds, performance bonds, regulatory bonds, license and permit bonds.
The Surety Reinsurance Support program is in place to cover surety bond(s) issued on behalf of the Company, provided that such surety bond is a bid bond, performance bond, regulatory bond, license and permit bond. Surety reinsurance support is not to exceed 75% of the surety bond amount.
As at March 30, 2025, there was $137.8 million (December 29, 2024: $134.7 million) outstanding under the Guarantee Facility.
As at March 30, 2025, letters of credit in the UK totaling $7.0 million were outstanding as security obligations of the Company outside of the UK Facility (December 29, 2024: $7.5 million). Additionally, there are $39.4 million (December 29, 2024: $38.0 million) of letters of credit outstanding outside of the UK Facility.
As at March 30, 2025, management believes that the Company was in compliance in all material respects with all applicable contractual obligations and the Company has not provided for any costs associated with these letters of credit.
(d) Through the normal course of operations, the Company has guaranteed payments and residual values to third-party lenders on behalf of customers. As at March 30, 2025, the Company had guaranteed $2.0 million (December 29, 2024: $2.1 million) of these arrangements. The Company has not provided for any of these costs, as it does not believe they will have to pay out on any of these arrangements.
NFI GROUP INC. 2025 FIRST QUARTER REPORT
NFI GROUP INC.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 30, 2025
(in thousands of U.S. dollars except per share figures)
- SUBSEQUENT EVENTS
On April 2, 2025, President Donald Trump announced a new US "reciprocal" tariff program which includes, a baseline 10% tariff on imports from all countries (except Canada and Mexico), along with additional country-specific tariffs (including for China). The United States has also imposed 25% tariffs on steel and aluminum and automobiles from all countries. Existing tariffs in respect of Canada and Mexico remain in effect to the extent goods are not exempted under the USMCA. Other countries, including Canada, have imposed certain retaliatory tariffs on products from the United States. Management has, to the extent reasonable, incorporated known facts and circumstances into the significant estimates and assumptions in the preparation of the interim financial statements. The impact of tariffs on the business and financial performance of the Company remains uncertain. The Company continues to assess the direct and indirect impact of tariffs on its business.
On May 7, 2025, the Company entered into a new two-year first lien secured revolving credit facility (First Lien Secured Facility) with a total borrowing limit of $845 million, which includes $300 million in letter of credit availability. The First Lien Secured Facility can be extended for an additional two years if NFI enters into certain additional subordinated credit arrangements, and it refinances and replaces the Company's existing senior secured facilities.
19 NFI GROUP INC. 2025 FIRST QUARTER REPORT