David George-Cosh

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Shares in NFI Group Inc. tumbled Monday after the Winnipeg-based bus maker slashed its financial forecasts amid wide-ranging supply chain problems tied to the COVID-19 pandemic.

NFI Group, which makes a range of gas and electric-powered buses and coaches, warned in a release late Friday afternoon that it expects full-year revenue; adjusted earnings before interest, taxes, depreciation and amortization (EBITDA); and capital expenditures will lower than previously anticipated.

NFI's announcement comes as manufacturers around the world ranging from semiconductor makers to bicycle builders are dealing with an unprecedented supply chain crunch on global trade that has seen shipping rates spike as demand for container shipping soars.

"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," said Paul Soubry, president and chief executive officer of NFI, in a statement.

"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."

NFI now sees 2021 revenue coming in between US$2.3 billion to US$2.5 billion, down from prior expectations of US$2.8 billion to US$2.9 billion. It also expects to report adjusted EBITDA of between US$165 million to US$195 million, down from a prior forecast of US$220 million to US$240 million.

Cash capital expenditures are now expected to come in at US$35 million, down from US$50 million the company stated last month. NFI also stated it now expects to see a "significant" year-over-year decline in its adjusted EBITDA in the next two quarterly periods. It also will maintain a dividend payout of $0.2125 per share payable on Oct. 15.

Soubry added that the supply disruptions will also assist NFI in controlling some of its costs and preserve its cash flow until it can get a reliable supply of key vehicle components. He said he is "confident" the company remains on track to report US$400 million to US$450 million in adjusted EBITDA by 2025.