Earnings Call: Q4 2020

Mar 4, 2021

Thank you for standing by, and welcome to the NFI Group's Fourth Quarter twenty twenty Financial Results Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. Thank you. I would now like to hand the conference over to Stephen King. Mr. King, please go ahead. Thank you, Jack. Good morning, everyone, and welcome to NFI Group's fourth quarter and fiscal year twenty twenty results conference call. This is Stephen King, NFI's Group Director, Treasury, Corporate Development and Investor Relations speaking. Joining me today are Paul Subri, president and chief executive officer and Pipasu Soni, executive vice president, finance, and chief financial officer. For your information, this call is being recorded, and a replay will be made available shortly. On this morning's call, we will be walking through a financial results presentation that can be found in the Investors section of our website. We will be moving the slides via the webcast link, but we will also call out the slide numbers referred to as we walk through the presentation for participants on the phone. Starting with slide two, I will remind all participants and others that certain information provided on today's call may be forward looking and based on assumptions anticipated results that are subject to uncertainties. Should any one or more of these uncertainties materialize or should the underlying assumptions prove incorrect, actual results may vary significantly from those expected. You are advised to review the risk factors found in NFI's press release and other public filings on SEDAR for more details. We also want to remind listeners that NFI's financial statements are presented in U. S. Dollars, the company's functional currency, and all amounts referred to are in U. S. Dollars unless otherwise noted. On slide three, we've included some key terms and definitions for you to refer to as we go through the presentation. Of note, zero emission buses, or ZEBs, as we refer to them, consist of battery electric, hydrogen fuel cell electric, and trolley electric buses. Equivalent units is the term we utilize for our production and deliveries. The majority of our vehicles represent one equivalent unit, while an articulated 60 foot bus takes two production slots and therefore is equal to two equivalent units. I'll now pass it over to Paul, who will recap the quarter. Thanks, Stephen, and good morning, everyone. Before I get into the details of the fourth quarter and year end 2020, for first time listeners and those not as familiar with NFI Group, I'll quickly provide some background on our business, specifically our leadership position in zero emission battery electric and fuel cell electric mobility, and how we plan to drive the transition to a cleaner electric future, what we like to call the Zevolution. Now turning to slide four. NFI is much more than just a vehicle manufacturer. We're a total mobility solution provider and a leader in technology development. Our offering includes fully turn full turnkey solutions of infrastructure installations, vehicle production, aftermarket support, training, telematics, and parts. We have the strongest zero emission bus offering in all of our core markets with the widest range of zero emission mass transit vehicles ranging from single deck to double deck, articulated buses, medium duty, and motor coach variants. We have for more than fifty years of elect we have more than fifty years of electric bus experience, and NFI zero emission buses are in service in more than 80 century 80 cities in four countries. Our ZEBs have completed more than 20,000 electric service miles, and we have delivered 1,371 ZEBs since 2015, including 389 in twenty twenty or 9% of our full year's deliveries. NFI has the capacity to produce up to 8,000 equivalent units annually, and we anticipate that 20 to 25% of our 2021 production will be zero emission buses, more than doubling that percentage we saw in 2020. In 2018, we identified that infrastructure or charging infrastructure, one of the main challenges for our operators, which led us to launch our infrastructure solutions business to support our customers in their transition to zero emission fleets. This business has been growing very well with revenue of $24,700,000 in 2020. Infrastructure acts as a differentiator for NFI as it helps create stronger relationships with our customers while also allowing us to control the infrastructure installation in coordinate with the vehicle delivery to ensure on time service and performance. Now turning to slide '5, 2020 is a year that we soon won't forget. As we begin the year began the year, we had a plan that would see us deliver record results, and we were off to a great start with a solid first quarter. Then on March 23, COVID nineteen became our reality as we idled nearly every one of our facilities. As the pandemic took hold in our geographies, few of us could ever imagine the dramatic impact it would have on our world, our customers, our people, and our business. However, we saw a strong finish to the year, exceeding our revised 2020 adjusted EBITDA guidance that we provided in August. But results continue to be impacted by the COVID pandemic as we move through 2021. Our company wide transformation initiative launched in August titled NFI Forward achieved its targets for fiscal twenty twenty. NFI Forward is designed to make us a simpler, leaner company with less overhead in SG and A, fewer business units, and a reduced footprint. 2020 results from NFI Forward include 17,000,000 in adjusted EBITDA savings and an additional 1,000,000 in annualized free cash flow generation. We remain focused on deleveraging and strengthening our balance sheet. And in December, we completed amendments to our credit facilities, which now provide us with relaxed covenants as we cover recover from the impacts of pandemic that will help us guide us through '21 '22. We've also terminated the unused $250,000,000 sidecar facility. And in March, we closed the 250,000,000 Canadian bought deal equity financing that will drive liquidity and improvements to our leverage with expectations that we'll be below four times total leverage in 2021 and below three times for the 2022. With the fourth quarter and full year 2020 now complete, we can again reiterate our 2021 adjusted EBITDA guidance of $220,000,000 to $240,000,000 Turning to Slide six. Our backlog declined slightly at year end by three seventy eight EUs as deliveries outpaced new awards driven by pandemic related delays. Based on our experience so far this year in 2021, we continue to anticipate that we'll see increased order activity as previously delayed orders are released. Our backlog remains a positive strength for NFI and sets a solid foundation for our future. Deliveries were down within transit, but we saw a strong finish to a very difficult year. The decline in deliveries was primarily due to COVID nineteen impacts, but q four twenty nineteen by comparison was also a very successful period. Private motor coach deliveries were down nearly 40% year over year, reflecting the impact of the pandemic. Medium duty and low floor cutaway deliveries were up 21% year over year, reflecting strong demand, which remains encouraging. I'll now ask Papasu to take us through our financial results. Thank you, Paul. Turning to Slide seven. Our Q4 performance saw significant improvement from the 2020, but continued to be impacted by the pandemic. Total revenues declined by 22.5% when compared to Q4 twenty nineteen, driven by the lower deliveries Paul discussed. Adjusted EBITDA saw a year over year decline of 37.4%. In response to the decline in revenue, we've been focused on lowering both variable production cost and fixed general and administrative expenses through the NFI Forward initiative. Free cash flow was down by $20,000,000 quarter over quarter as we saw lower adjusted EBITDA and higher maintenance capital expenditures. Turning to slide eight, Our fiscal twenty twenty performance was down from fiscal twenty nineteen due to the impacts of COVID-nineteen. Total revenues declined 16.4% from fiscal twenty nineteen. In addition to lower deliveries, we also saw lower private aftermarket part sales as operators idled fleets. Full year adjusted EBITDA decreased by 51% as we continue to incur fixed operating costs on a lower revenue base. These negative impacts were somewhat offset by government grants received through wage subsidy programs. On a yearly basis, free cash flow decreased by 82.9, primarily driven by the idling of production facilities in the second quarter, which resulted in a second quarter free cash flow loss of $43,100,000 Liquidity at the 2020 was $233,500,000 an increase of $24,200,000 from twenty nineteen Q4. The liquidity does not include the canceled sidecar or funds from the equity offering, which will further strengthen our position. NFI believes that our liquidity provides us with the flexibility to pursue operational and strategic goals, such as investments in NFI's zero emission products and electric propulsion technology, investments under NFI Forward and other potential growth opportunities. In addition, we remain focused on returning capital to shareholders through dividends. Turning to slide nine, I'll outline our net earnings and the adjustments that we've made to reflect the impact of one time non recurring items. Q4 net earnings were $8,500,000 or $0.14 per share. Full year, we had a net loss of $157,700,000 driven by lower production volumes, extraordinary COVID-nineteen costs, and nonrecurring restructuring costs associated with production reductions and the NFI Forward initiative. Fiscal twenty twenty results were also lower as a result of a $50,800,000 goodwill impairment charge related to MCI's private motor coach operations incurred in twenty twenty Q1. Adjusted net earnings for twenty twenty Q4 were $8,200,000 or $0.13 per share. For fiscal twenty twenty, the adjusted net loss was $47,200,000 or negative $0.75 per share. Quarterly adjustments include $6,400,000 in exceptional costs related to COVID-nineteen and nonrecurring restructuring charges. We also adjusted for mark to market and unrealized foreign exchange gains. A detailed reconciliation of adjusted net earnings is in the appendix of this presentation on slide twenty two and twenty three. Turning to slide 10, we outlined the expected benefits of NFI Forward. The anticipated cost savings from NFI Forward will show up in three areas of our financials, lower direct material costs, lower manufacturing overheads, and lower SG and A expenses. In aggregate, NFI Forward is expected to deliver an 8% to 10% reduction to both manufacturing overhead and SG and A based on the 2019 run rate. In 2020, we generated $17,000,000 in adjusted EBITDA savings and an additional $1,000,000 in annualized free cash flow. In 2021, we'll add another $30,000,000 of adjusted EBITDA savings for a total run rate of $47,000,000 driven by the combination of New Flyer and MCI business units, the consolidation of NFI parts and ADI North America parts operations, and as we realize full run rate savings from actions carried out in 2020. In 2022, we expect to be able to consolidate additional facilities, which combined with further administrative reductions will generate an additional $13,000,000 in savings. And finally, in 2023, we'll achieve another $7,000,000 to bring total expected annualized savings to $67,000,000 These cost reductions will generate significant volume leverage. When markets recover, we'll grow revenues on a lower fixed cost base with drop through to adjusted EBITDA. We also expect $10,000,000 in additional cash flow savings on top of the adjusted EBITDA benefits during 2022 to 2023. These savings are driven by a decrease in cash leases and the benefits of a central treasury team. In addition to these items, we continue to explore other cash generation opportunities, including a significant focus on working capital. We anticipate that we will need to make a small full year working capital investment in 2021 to account for increased ZEB production. On slide 11, you will see a summary of the financial guidance we have provided for 2021, which includes the following. Revenue of 2,800,000,000.0 to $2,900,000,000 with ZEBs expected to make up 20 to 25% of 2021 manufacturing revenue adjusted EBITDA of $220,000,000 to $240,000,000 significant volume drop through from cost base reductions generated from NFI Forward, cash CapEx of $50,000,000 which includes maintenance CapEx, 15,000,000 of NFI Forward initiatives and other smaller projects, and adjusted ETR of approximately 31%. I also wanted to add a comment on seasonality. We expect a decline in Q1 year over year, but anticipate year over year revenue and adjusted EBITDA growth in quarters two, three and four. A reminder to listeners that in 2021, Q1, Q2 and Q3 will be a thirteen week period, while Q4 will be a fourteen week period for a total fiscal year of fifty three weeks in 2021. I'll now turn the call over to Paul to discuss the factors driving our twenty twenty one guidance and longer term outlook. Thanks, Vatsu. So now I am on Slide 12, and I want to provide a little bit of color on our end markets. So despite the decline of the total bid universe, the long term demand for transit vehicles remains intact, and we anticipate there will be growth in procurements in 2021 and beyond as COVID restrictions are lifted and government funding is released. An overall positive sign is that only a few transit RFPs in the past year have been canceled even with the ongoing pandemic. As we turn to slide 13, we outline that we are seeing unprecedented government support for zero emission transit vehicles. In February 2021, the Canadian government announced an eight year 14,900,000,000.0 public transit funding program, which includes 5,900,000,000.0 in dedicated project funds starting in 2021 and an ongoing permanent funding of 3,000,000,000 per year beginning in 2026 to 2027. The announcement, the largest public transit investment in Canadian history includes a focus on zero emission and electric transit buses. We're very excited about this development as based on our US experience with permanent and predictable funded transit gives transit agencies much better visibility as they can plan current and future year procurements. In addition to that funding, the Canadian government is fully supportive of the mandate they've given the Canadian infrastructure bank and $1,500,000,000 of financing support to assist that transition at the local transit agency. In The United States, the proposed Invest in America Act, investing in a new vision for the for the Environment and Surface Transportation Act, which was originally drafted in June, is a 494,000,000,000 draft act aims at providing significant funds for improvements to US infrastructure, including transit vehicles. The draft specifically focused on reducing The US carbon footprint and assisting with conversion to electrified mass transit, and this includes 1,700,000,000.0 in proposed funding for zero emission buses, a fivefold increase from its press predecessor, the FAST Act. The Invest in America Act is a five year act that provides draft transit agencies with longer term visibility as they execute on their plans, and we are encouraged to hear the news and insights from and priorities from the Biden Harris administration. The recent announcement of a US $1,900,000,000,000 stimulus package is also encouraging. It not only provides dedicated relief funds to help agencies impacted by the ten pandemic, it also provides funding for infrastructure capital projects. In 2009 and 2010, stimulus packages increased bus procurement activity, and there's a potential that we could see some acceleration orders driven by the stimulus funds in combination with a new multiyear funding package. I'll also note that that stimulus package for the first time had about $2,000,000,000 focused for the motor coach operator recovery in The United States. In The UK, the government announced its 10 plan for a green industrial revolution in November 2020, which includes a national bus strategy that we will see that we'll see more than 4,000 emission vehicles put into service, and funding within The UK and Scotland has already started to flow. NFI is the leader in North America and The UK for zero emission buses and would benefit from the increased transition to zero emission buses. At this point, we anticipate ZBs will make up 20 to 25% of our overall production in 2021, and we are well positioned regardless of how fast or how slow the transition actually occurs. NFI can manufacture ZEBs at all of its facilities, and ADL has already delivered the most ZEBs in The UK. MCI is now selling an innovative battery electric coach and Aarbox electric Equus Charge, which was unveiled earlier this week or sorry, last week, is now in testing. We received our first order for the Equus Charge for six buses within two days of the Equis launch. Slide 14 outlines the annual market deliveries in North America and heavy duty transit since the 2019. As an industry, we cooperate through a a media publication, and we are finally awaiting the 2020 actual delivery data, to be consolidated by an external source. But we anticipate a significant decline in 2020 actuals before we start to see an improvement in 2021 and steady growth to follow. We anticipate that NFI maintained or grew our market share in 2020. On slide 15, you can see how our private customer markets have been dramatically impacted by the COVID nineteen pandemic. The North American motor coach deliveries were down 58% as operators idled their fleets due to immediate decreased demand for tourism, travel, convention, sports, university, employee transportation. We expect the private motor coach market will recover over time as travel restrictions are lifted and as vaccines are rolled out. But full recovery will take time with continued challenges throughout 2021. And finally on that chart, in The UK, the transit market where private operators operate public routes, the market was significantly impacted and was down 65% in the 2020, but finished the year in a better position and ended down 24%. ADL responded to these market impacts by adjusting production at the Scottish facilities, rationalizing chassis production at its Guildford UK location, and removing fixed costs or reduction in significant administrative and overhead positions. There's no doubt that COVID impact our 2020 plans and results, but long term, buses and coaches will recover, and we will play a critical role as cities reopen. There will be bumps in the road as we recover at normal run rates, but government funding, the transition to zero emission vehicles, and private market recovery combined with the structural changes made through our NFI Forward initiative will make us a more competitive and cost efficient competitor. Slide 16 provides some insight into NFI's targeted trajectory over the coming years that Papasu outlined. We're extremely well positioned for the near term and the long term with expectations for top line growth and strong performance improvement. At our twenty twenty one investor day, we announced twenty twenty five targets of 3.9 to $4,100,000,000 in revenue and 4 to 450,000,000 adjusted EBITDA, representing a revenue CAGR of more than 8% and an adjusted EBITDA CAGR of more than 16% through that five year period. Our twenty twenty five targets will be driven by a focus on bus and coach. We have a strong public and private customer base with long standing relations. In addition, ADL will grow into new markets that are underpinning our recurring revenue part stream. We have the largest EV capacity in North America and in The UK with proven track record in delivering electric vehicles and will lead the market's transition to a zero emission future with expectations that 35 to 40% of our production by 2025 will be zero emission, more than tripling the current 2020 ZEB levels. NFI Forward has been a tremendous success so far, and its initiatives will create volume leverage as we'll deliver higher revenue on a lower fixed cost base going forward. And finally, we'll continue to invest in our people, our products, and our business and return capital to shareholders through our dividend strategies. I'll now turn it back to Stephen to summarize today's discussion. Followed by that, we'd be glad to open the call up for analyst questions. Stephen? Thanks, Paul. Turning now to Slide 17, I'll recap this morning's call. NFI's twenty twenty Q4 and fiscal year performance demonstrate NFI's resiliency, strong backlog position and ability to respond to the ongoing economic realities of the COVID-nineteen pandemic. Although we anticipate 2021 deliveries will remain lower than pre COVID-nineteen levels, we are positioned for market recovery and have already seen strong improvements from NFI Forward leverage. We view 2021 as a transition year. Following credit amendments plus our recent equity raise, we have a much stronger balance sheet. Combined with our cash flow generation, we now have the flexibility to evaluate strategic investments to grow our zero emission battery electric and hydrogen fuel cell businesses. We continue to see unprecedented government support for transit. This will help drive order activity and growth in the future. We continue to innovate and disrupt ourselves and we are excited about the future of NFI. We've had numerous new product launches and announcements to start the year, including the level four automated New Flyer AV, the new battery electric AARBOC Equis, and ADL's next generation hydrogen fuel cell bus, h H2O. Soon, we'll roll out the next generation of New Flyer's electric vehicles and new MCI electric coaches. We are leading this evolution to a zero emission future with strong 2021 guidance and 2025 targets that would see us drive top line growth and even better margin performance. We'll now open the line for questions. Jack, please provide instructions to our callers. Certainly. At this time, if you'd like to ask a question, Chris Murray with ATB, your line is open. Yes. Thanks, folks. Good morning. Hey, Chris. Paul, maybe I'll ask you this question because, you know, certainly, there's been maybe some changes in the market even over the last, you know, six months to the to the past year in terms of, you know, the number of folks that are either getting into the electric vehicle market in it in all kinds of different ways, call it everything from the small cutaway stuff that you see at Arbaca right up to school buses, transit buses, medium duty buses. I guess the question I have for you is how do you think the market dynamics play, in what is looking like a market that could be much more fragmented over the next few years in terms of you guys maintaining share? Well, it's a it's a good question, Chris. And, of course, we've all watched and with keen interest on what's happening with these recent, SPAC announcements and all these EV buses or companies making a whole bunch of noise and excitement about entering the the zero emission vehicle space. The vast majority of them, if you really look into it, are truck or van or that type of oriented market. In our space, we have the core legacy competitors of of New Flyer and Gellig and Nova. We have National that's part of the the REV Group. We've seen in the last number of years of course, Proterra is not new. They've been around for, whatever, fourteen, fifteen years. But Proterra and, of course, BYD, the only real new player to our space that has announced anything in in, you know, a direct competitor to what we offer really is the announcements of rival, SPAC, and, of course, their plans the vehicles are not in in, been sold or in service and plans to try start to test, those vehicles, in a in a transit type environment in in the fourth quarter of this year. I'm not so sure I see a a massively different competitive dynamic. You know, that everybody's got their different strategies of how far down the chain they are in terms of battery assembly, battery management system control, and so on and so forth. In the smaller space, that might be an area where we see some change going forward because some of these electric, let's call them van or small truck producers, in theory, could migrate over to the cutaway type space. But at this point in time, there really isn't a defined, you know, direct competitor to our businesses, which only reinforces why we think, Chris, this strategy of optimizing our our battery sourcing, our battery management type strategy. A great example, fact that we're able to bring the Equus charge to market so fast is we basically took the guts and the brains out of the New Flyer Excelsior zero emission vehicles, and we're able to port that over to the Equus, you know, in record time. So I think that kind of broader strategy helps us defend from, you know, current competitors, but also any potential new competitors. I'm not so sure I agree with that we're gonna see a much more different fragmented competitor base in the next couple of years in our space. Okay. Fair enough. And then just one follow-up to that question. Does that, in a lot of ways I mean, you talked about the smaller market. Does that give you some more opportunities with Arbacher, the cutaway, to actually start thinking about offering electrified options? It it's a really good question, Chris, because as you know, that space traditionally was, you know, buy a a chassis from, you know, GM, Ford, Freightliner, whoever, and and slap a body on the back. And no disrespect to that space, but not not the most attractive, vehicles. And had a light span of, you know, five to seven years type targets for for cutaways. The the last couple of weeks, we've launched this electric exquis, we've actually had an awful lot of conversations with our dealer network and their customers about actually shrinking the the EQUIS even further and and potentially even cannibalizing the large size of that cutaway space. And so that scalability dynamic that we're really focused on and the ability to really know how to build, you know, that medium duty class, which actually looks and smells a lot like a heavy duty, I think might might bode well for us. The the the game you know, we talked lots with the team at ARBOC and and Chris at New Flyer and his tech team, but the whole dynamic about ultimately what will the core OEMs of Ford and GM do in terms of electric chassis offering, the jury is still out there of how that may impact the pure cutaway space in the smaller vehicles. Plus, as I said, the cutaway historically was a five to seven year vehicle. Course, you're gonna put a $100, if not more, of batteries in it. You're gonna wanna think about the time horizon of the life of those vehicles, which could shift that market. Okay. That's great. Couple of questions for me. First, there's some media reports out this morning that the government of Canada might be looking to put some additional dollars into electrification or transit. And this follows on some announcements from the Canadian Infrastructure Bank, I guess, in the fall. Trying to understand if you can give us any color on if this is these are new dollars or recycled dollars. And I think originally, the goal was to build 4,000 electric vehicles, which when I think about your capacity and what you guys can do and even what's available seems like a pretty big stretch. Any thoughts around that that funding and how that actually might roll into something we see being a little more tangible for you folks? Well, it's a really good question. And and I had the opportunity yesterday, Chris, to participate in a Canadian club luncheon in Toronto, like a thousand participants listening online in the panel. Here's our view on that. First of all, I don't know. We don't know the actual logistical details of how that kind of funding makes its way into the public transit environment. But here's the the elevator speech as I see it, which I think really net net is a fantastic movement for Canada. A, the Canadian government has you know, the the current Liberal government made a commitment in their election plan to to put four to 5,000 electric vehicles on a road in five years. Pretty ambitious with no real details of how they were gonna do that. B, they started off with this commitment to allow the Canadian infrastructure bank a dedicated $1,500,000,000 pool to think about how to facilitate transit agencies, pulling their CapEx forward and basically CIB taking the risk on future savings. But but really, turbocharging, if you will, the pace at which we can we can look at adoption of ZBs in Canada, both vehicles and the charging infrastructure. And then a couple weeks ago, we saw that big announcement of the federal government to think about dedicated funding more in the line of what we see in The United States. All that, I think, bodes really, really well. I wouldn't expect us to see big orders in the next couple of months, but quite honestly, that is a game changer for the Canadian public transit environment. And it isn't just a vehicle strategy. It is a green, zero emission, environmental, congestion type strategy all balanced or or bundled into kinda one overall. It's the first time I've been here twelve years. It's the first time we've seen the federal government in Canada come out with that strong of a both of a statement, but also economics around making that happen. You know, devil's in the details, but I'll tell you, I'm really, really encouraged. Okay. Great. And then just one kind of technical question for me. The on the twenty one twenty twenty twenty one guidance, you've talked about a 31% effective tax rate. Guys, I mean, we just saw The UK increase, I guess, corporate taxes by about five points to 24%. Just any thoughts, I guess, two parts on this one. One, does your 31% kind of incorporate that tax change? And then two, you know, structurally for years, you guys have always paid higher effective tax rates, and I appreciate part of that is how, you know, essentially, Newswire got structured a bunch of years ago as a public entity. But, you know, is there anything you guys can do to bring that back to what I would call a more normal rate than most corporations face? Hi, Chris. This is Papasi. So, you know, just kind of following up on that question, we are reviewing some options for the tax, you know, for for bringing down that ULC, the the seven points that we kind of incur with that ULC. So so we have been investigating that. We've got some options on the table. We're working that. I think from a tax rate perspective, we do feel like from our perspective, that the 31% is in line with our expectations. And the thought process there is just a couple of things. Number one is, as you know, the tax rate does get tax rate percentage just does get a little bit goofy from time to time as you've seen. And the reason is because there's a couple of things that happen for us as you as you may already know. Like for this year, for 02/2020, we had the goodwill that was nondeductible, and then we had some FTC foreign tax credits and then our BEAT tax, which was a little bit of an issue. But we feel like for 02/2021, we should be fine with, you know, with that. And then and just and just on The UK tax that you mentioned, The UK tax, that isn't effective until 2023 from what I've from what I've read so far. Alright. Thanks. That's helpful, folks. I'll turn over the line. Thanks, Chris. Mark Neville with Scotiabank. Your line is open. Hey, good morning, guys. Hi, Hi, Maybe some of the 2021 guide on the ZEV. Can you maybe just help everyone sort of bridge the gap? I think it's 20%, 25% for 'twenty one. It was 9% last year, and I think it's 6% of your backlog. So just, sort of help us sort of bridge the ramp and sort of how to think about that. You're talking about the percentage of, our vehicles that are zero emission? Yeah. I think it's 6% of your current backlog, but it's, you know, 25% of the guide for manufacturing or '20 20. Excuse me. Yeah. So yeah. So there's a couple things that are happening. Think and, Mark, we've talked a little bit about this past in our materials and becoming more and more prominent. First of all, the Canadian customers don't have, significant backlogs. Historically, they haven't been really multiyear contracts. Some have, but most of them have been kinda one year buys. So, you know, that wouldn't be in the backlog, and therefore would be any orders on zero emission in Canada would be added to that percentage. The second issue is is the The United States. Obviously, you have the federal funding. You have the changes in the FDA, rules a couple years ago where you can't just put a whole bunch of options on there and then shop the options around. They have to be intended for a specific audience of customers. Consequently, what's happened in the last two or three or four years is the advent of state schedules, which means that the you know, pick one. The the state of Florida puts together a schedule. California has them and others where multiple operators can buy off a state approved schedule. And, of course, because those schedules don't have defined quantities, they are effectively a buy, in some cases, potentially multi year, they go immediately to a firm order. They don't sit in an option backlog to start. And, of course, they're only announced at point of not of the the signing of the state schedule, but actually at a PO as as received from customer. So those are the biggest things. The other part that I would suggest in the next couple years is we're starting to see we will see more pure zero emission RFPs hit the street, including, both electric vehicles, but also, fuel cell vehicles. Yeah. Paul, I'd just add to that that the what you mentioned about Canada is a similar experience in The UK, where the operator is not so much in backlog That's true. On a yearly annual basis. So they go immediately with the count. And then I would say too, Mark, that more of the ZEBs are in our firm backlog than our option backlog because they have that kind of shorter tenure. Yeah. Okay. Okay. Maybe just the onto the invite or sorry, the infrastructure solutions business. Again, I think that's the first time we get a number on that. So appreciate that. I guess, one, I'm just curious sort of the growth you saw in that business this year. And I guess just bigger picture, when you think about that business, I mean, I don't know if my math is correct, but I think 25,000,000 might be roughly 10% of your your ZED sort of manufacturing revenue. Is that sort of how we should think about that business? And is it something that grows alongside ZED, or or is there or would this be something that maybe grows in excess of sort of what you see in the manufacturing side? Yeah. It's it's a really good kind of question and insight, Mark, because, you know and and, you know, we'll take half good luck and half smart people in our team, but we we kinda fell into infrastructure solutions a couple years ago when we got frustrated with the first deliveries and the customer may not being as ready or the the installation as, correct or efficient relative to the vehicle deliveries. So that business has actually really started to take off. Rough order of magnitude, maybe 60% of all of the ZEBs competitions and where we win, there's a zero emission infrastructure requirement as part of that RFP. So what Chris and team have done so far is effectively being able to say to the customer, if you wanna include infrastructure in your RFP or along in your bus RFP or alongside in a separate RFP, absolutely, we will participate. There are some customers that have a much broader city strategy, for example, zero emission refuse vehicles or vans or heavy equipment, that they're having a broader strategy. So they've taken an aggressive position at installing their own chargers. I would suggest, as far as we can kind of tell the next couple of years, as the more customers take on zero emission, that we're going to continue to see that 50% or 60% of the time we'll be involved in the charging strategy. The bigger discussion then long term is do we offer that as a service in itself independent of a buzz? And is there even more of an expansion into a model where we work with financiers or other scenarios where in addition to just responding the RFP and putting the charges in place, of course, the design, the optimization, working with them on whether it's depot or en route charges, but a broader strategy of, you know, bringing together a whole package which includes, you know, service, it includes financing, it may include, you know, telematics, energy optimization, and so on and so forth. I'd say it's a space to watch for us. Clearly, it's a critical part of the success of the vehicles. It's not like the old days where you just put diesel into a vehicle wherever it comes from, and life's good. There's a lot of complexity here, and, it's a complete game changer for transit agency who never had that skill set, inside their their machine, up to this point in time, at least from a bus perspective. Okay. On the the maybe the 40% that, I guess, are doing it themselves or have their own strategy, like, is there an are you or is there an opportunity where you're providing consult consulting services around that even if you're not maybe selling your infrastructure with it? Yeah. Let's let's provide put it this way, Mark. It's really more advisory and consultation upfront as part of the kind of the selling and marketing and relationship process. But once, you know, New York City, for example, decides to put it in a charger, they have way more resources and way broader and are dealing direct with the, you know, the charging providers and the energy utilities and so forth. But it's it's I wouldn't say no, but it's not gonna be a prominent part of our business. Got it. Maybe just one last one. Just for. Just on the free cash flow guidance or the maybe not guidance, but free cash flow for 2021. And, you know, we've got the EBITDA guide. I think we've got CapEx guide. I think you said working cap would be a small investment this year. And then just on the tax, the 31% effective tax, is that sort of representative of what your cash taxes will be? And maybe just thoughts around interest expenses post the equity offering. Thanks. Yeah. No. I would I would say that that is should be in line with what we we should expect from from our perspective. Yeah. And I guess Maybe Oh, sorry. Sorry. Go ahead. No. No. I was going to Yeah. So sorry. I think, yeah, like we said, do expect a small investment in working capital for the year. I think mostly, as we said, driven by the kind of more heavy investment in zero emission buses. As Papasa just mentioned, yeah, kinda I would say that 31% cash tax kind of equivalent to regular tax. And I think overall from free cash flow, the historic profile has been, you know, kind of 50 of adjusted EBITDA. But, you know, now we've got higher interest expense in 2021. So just factor that in as well. Yes. And I think, Mark, just the working capital piece, which Stephen alluded to, we're expecting the battery cost That's why we're talking a little bit more about and then the testing takes a little bit longer with the the EV. So that's the thought process with having just a little bit of a working capital play that we've or increase that we're gonna have to deal with. Okay. Alright. Thanks a lot, guys. Appreciate it. Norman Setti with Laurentian Bank. Your line is open. Hi. Good morning, everyone. Hello. Yes. So my first question would be, what's the feedback that you guys are getting from your customers, primarily the transit agencies? Are they comfortable with what they have right now? Are they sort of waiting for some of these stimulus packages before they can sort of put in the orders? I I think that's a good observation. Look. These guys have gone through hell this past year with, you know, trying to continue to provide service and driver issues, and reduced passengers, and local funding dynamics, and so forth. Every transit agency has, in some cases, a five or a ten year fleet replacement plan anyway, and they've been updating them. Of course, the public pressure, last couple of years to think about zero emission has them, in many cases, doing pilot or demo projects and so forth. As they get back on their feet from both a more normalized operational perspective, and start to think about rejuvenating their fleet replacement plans. The stimulus or economic support packages in Canada, UK, in The US are going to have a massive impact. What I would suggest is their pace, or their desired pace of adoption. Keep in mind that these are most of our businesses, public transit agencies. Those vehicles have been funded by taxpayer dollars. Many of those vehicles have useful life left of them, And so it's gonna be a very difficult political sell to take vehicles off the road that still have economic or useful life, just to jump onto a zero emission dynamic. So those things all will play into, which is why we've been very, I would say, cautious or clear in our direction about adoption. It isn't, in our minds, a revolution. It's not going to snap back to massive volume or demands in the short term. It's going to be a replacement strategy over time. There is no question, though, that zero emission, again, whether it's battery electric or fuel cell electric or in some customers, trolley electric, is gonna be taken on more and more prominence as part of that decision. No. That's great. And just going back to the infrastructure solutions part, the 25,000,000 that you have there, is there some sort of recurring revenue within there? Or is that just, the services that you offer and you charge it? And just maybe I'll add on there that once the zero emission sort of buses grow, do you see that any that would impact your aftermarket business? Because I've read that generally EVs require less maintenance than traditional ICE engines. Well, it's a good question. So first and foremost, the service that we provide today is something as follows. We respond to an RFP, they want us to assess their situation, they show us the location of their vehicle, they show us the routes, they walk us through their route strategies going forward. We then would propose whatever charges make sense, whether it's at depot or en route. We would work with the various suppliers to try and get the right combination of price, performance, location, support, and so forth. But the vast majority of our infrastructure solutions revenue is getting paid to install the chargers, source them, install them, get them up and running, and so forth. Whether there will be ongoing revenue stream associated with servicing or supporting those chargers is, let's call it, still up to be determined. The second part of your question is there is no question that over the next twenty or twenty five years, our parts business is going to be impacted by electric vehicles, zero emission requiring spare parts. I caution you that though, however, the vast majority of the parts that will be impacted by zero emission are things like engines, or let's say brakes. In both of those cases, we are involved in a spare parts support, largely in a brake dynamic. We're the largest provider of spare brake parts in America, in Canada. On the engine side, companies like Cummins or on the air conditioning side, Thermal King and all these other guys, they have their own spare parts support infrastructure. The transition of zero emissions will have less an impact on our business, but there's no question our spare parts business in the long term will inhibited, which is why we've looked at different revenue sources, whether it be infrastructure solutions or monitoring or telematics support or those kind of things that have revenue potential in them. Got great color. And just maybe last from my end. So I remember you'd mentioned that your for New Flyer, your weekly production e units had gone down to about 45, per week. In the first quarter, is that is that still the case, or has it improved? And maybe a sort of bigger picture on the production side. So your capacity is about 8,000, units per year. I'm just wondering that's like, is there a room to sort of, right size that capacity? I would assume that in the coming future, we don't see that you're going to hit that sort of rate. Yeah. Two questions. The first, yes, our rate of production is still approximately 45 a week. If you were in the daily meetings at our company, you'd see that we literally are adjusting production schedules based on orders, options, option conversion, state schedule buys, so forth, as well as customer decisions when to take them, and so forth. So we're adjusting that schedule literally every week. And the trick then in the in the strategy through '21 and into '22 is to ensure we have level loading across our our plants. Way way harder than than it actually sounds. The the issue is the gap between what we currently build and our max capacity. There's lots and lots of variables. The percentage of the different types of vehicles has an issue on labor efficiency. A single bus or an articulated bus that then has two production slots has a massive impact on on the production efficiency and so forth. So not to be too simplistic, but mix and volume and propulsion type has quite a dramatic impact on the ability to run efficient factories. Your your insinuation about can we take out costs or right size, that's exactly what we have been doing. And through our NFI Forward initiative, both on the cost of running factories, if you will, as well as the overhead and SG and A associated with it. But that's built into our forecast that we are effectively doing that. Okay. Thank you for your time. Appreciate it. Thank you. Good questions. Cameron Duarton with National Bank. Your line is open. Thanks. Good morning. Hey, Cameron. So maybe you can just talk a little bit about your degree of visibility on the back half of 2021 because you have sort of highlighted, as is usually the case, higher deliveries in Q3, Q4. So at this point in the year, what's your, I guess, your degree of confidence in q three and q four? What kind of visibility do you have? So as you know, every business is different because of the motor coach world effectively because we're not really building for private customers right now. We we are effectively slots are all sold in terms of it's it's an execution strategy. The same to some extent in the in the cutaway and the and the Equus at on Arbuck, although they have still some open slots and some variability in, let's call it, q four. In the New Flyer case, you know, we probably have the most fidelity just given the nature of the the bid dynamic, the sold slots, the customer orders awaiting purchase orders, and all these other things. As you know, we don't release our orders until we actually physically get a purchase order from the customer. I would suggest that when we look at, for example, Chris's forecast for the year and his upside, downside, it's probably the tightest range of any of our businesses. I would say we have a pretty high degree of confidence of being able to sell the slots that we have still open, which either come from a new award or largely from an auction conversion or in some cases, a state schedule kind of buy. In The UK, I have to tell you, last two or three months, Paul Davis has done a fantastic job of solidifying the first three quarters of the year in terms of his actual build schedule, and the the fourth quarter starting to come into, you know, into into clarity. The parts business has actually started off, you know, maybe a little bit better than we thought in the first quarter compared to the fourth quarter, which is actually quite encouraging. So all that to say, Cam, you you know, there's always risk in our business plan. We gave you a range of kinda $2.20 to $2.40 for for the year on adjusted EBITDA, but I would suggest we're in a better place this year than we were last year at this time on the confidence of filling the slots and executing to it. Okay. No, that's very helpful. And just a second question for me. Just on Buy America, I mean, there's been a lot of news in the press about the Buy America provisions for any infrastructure spending in The U. S. Obviously, you guys are fully Buy America compliant. But is there any, I guess, anything you're hearing that would suggest there might be any changes percentages, or perhaps with a new long term of fast act type build, there might be any change with Buy America? Just any sort of thoughts around what you're seeing on that front. It's a really good question, and we've spent an awful of time talking about it. Of course, you you and the others will remember we went from 60% US content to 65 now to 70. The rules around what must physically happen in The United States have not changed. I can tell you with a pretty solid degree of confidence that our intel, our lobby efforts, our work with the, you know, APTA and the trade associations has no we we don't see anything yet that there's any words or draft legislation or anything about changing the percentages or changing the the final assembly words. I will caution you, you know, our our our readers, our list, our investors that in many cases, the the media will confuse Buy American with Buy America. And, of course, we live in the Buy America rules of that 70% in US content and and finalization. Buy American, it gets often blumbled together. That's really around infrastructure or physical roads and bridges and those kind of things. And I I think that's an area we're gonna see potentially more changes under Biden and Harris. But the short answer is at this point in time, Ken, we haven't seen or heard anything that would change the rules of the road for us going forward. Okay. And and just on that, I mean, know, obviously, with with ZEBs becoming more popular, there's changes in in, you know, supply chain or the value of supply chain. I mean, is there any any, I guess, adjustments to the rules that would reflect maybe the eligibility of certain components, in a in a zero emission buff? Well, this is, again, a fantastic and a very insightful question because when we first started the ZEB journey, you know, we chose our primary battery supplier, a company called Exalt out of Michigan, to be US manufactured cells going into a manufactured module that then shows up at our place that we put into a a, you know, a battery pack and install into the buses. And our competitors were sourcing their cells offshore and then packaging them in America. And, you know, that is As per the Buy America rules, a cell is a subcomponent, and therefore, as long as the component itself meets 70% content, we're fine. What you're going to see is our strategy about self sourcing, where it comes from, how we package it, who it comes from, is gonna evolve over time. But, you know, it sure feels like the US government up to this point in time has not changed their rules or their minds around origin of cells. Having said that, we've also seen president Biden have lots of discussion, executive orders around everything around mining as as well as cell manufacture, which clearly The United States is behind the rest of the world on. That may change in the future, but, you know, our strategy there, as you know, is is not to be manufacturing cells. We wanna be the smartest and most agile buyer of cells and be able to adapt both from a technology as well as a cost per kilowatt hour type strategy. And I'm I'm really quite encouraged by what David White and our team and Chris Doddart have been doing on that front. I I think we'll be very competitive. Okay. No. That's great. I appreciate it. Thanks very much. Thanks, Ken. Daryl Young with TD Securities. Your line is open. Good morning, everyone. Hi, Daryl. Just a quick question for me on the longer term target of 400,000,000 to $450,000,000 of EBITDA. You sort of touched on parts of the market share question that I have related to it with, Chris' question, but just trying to get a sense of, you you know, what assumptions went into that and, what makes it, I think you you refer to it as a as a conservative target. So maybe just where some of that upside comes from. So this is this is Papasu. So let let me kinda walk you through how we did this. So one of the things we did was we went through each individual bus or region or whatever the case may be. Right? And we looked at the transition of what we think from each one of our product categories, each one of our buses, and what we would expect in each year, and then what the transition would be for those. I think where we come back to saying, You know what, we feel comfortable with that as we stand today is because a couple of things. We took kind of our midpoint approach through that process, so it was fairly detailed when we went through that process. Number two is, I guess where I go back a little bit is with our NFI Forward initiative and the cost savings we're going to get out of that, we should start getting some volume leverage as some of our markets pick up. We took a conservative approach on when our markets will pick up on that. That's the thought process. A couple of quick things is sometimes if you do the backward math, you would say we did about $330,000,000 in 02/2019. If we did a full year of ADL and then we add the, you know, the the 65,000,000, $67,000,000 of NFI Forward, you start getting in that $400,000,000 range. And I know there's a mix shift in some other things, but that's kind of why why we say it's we feel good about the number. Okay. Great. And then just the second question. In the past on the on the EV side, you you referred to the dollar margin being roughly the same as a traditional diesel bus, but the percentage margin declining. Would there be an expectation that over time as battery costs come down, you'd maybe be able to recapture some of that margin and you'd see a margin expansion leading up to that sort of 2025 target? Yeah. That's exactly part of the way we work our model to some extent. In a diesel environment, we buy a diesel engine, we get an actual, we get a transmission, there's you know, the competitive dynamics, the cost is the cost, the price is the price. We embed it. The way we build our our pricing up from a kind of a cost plus, if you will, doesn't allow for, you know, much margin as the bus gets more expensive. In the battery world, we got some new dynamics. A, the battery cell costs are coming down and will continue to go down, which goes back to my point previously to I can't remember if it was Mark's question, but we don't wanna get too deep on any one cell supplier or any one battery management packager because we wanna be as agile as we can over the next, you know, ten, fifteen years to make sure that we get the best technical solution, but the best price solution. So there is margin opportunity in that. The the second dynamic is we now have margin opportunity we didn't have before. We make our own battery, let's call it, pack enclosures. We we have other fabrication capability inside that whole value chain. We can either make or buy certain software or battery managed stuff, all those kind of things. Today, we're starting to see the zero emission margins look a little healthier than we may have originally intended. The question is gonna be going forward on competitive intensity. How much of that savings are we gonna be able to keep, and how much we're gonna have to hand over the customer to ensure that we're market competitive? But I would tell you, you know, today compared to a year ago, the confidence that our batter we can maintain our margins in a battery world is, in fact, improving compared to conventional is probably higher today than it was a year from now as that game starts to get more mature, but also as the volumes start to happen. Okay. Great. One thing, just follow-up on that, I think, just to make sure that we're clear, what we did say was our margin dollars for our EVs are higher than our, conventional. Right? And and the percentage was lower. So just just from clarity's sake. Okay. Perfect. That's, that's it for me. Thanks, guys. Thank you. Thanks, Daryl. Maggie McDougall with Stifel. Your line is open. Good morning. Hi, Maggie. Couple of questions here. First one, bit of a housekeeping question. So your NFI Forward cost savings, it looks like you found about $2,000,000 in change laying around somewhere. So wondering if you could just give us a bit of an update in terms of where you're you're finding some excess savings, and then perhaps a bit of color in terms of cadence of savings that we should expect to occur as we as we go through 2021 and 2022 to help with the modeling expectations? Hi, Maggie. This is Papasi. I'll give you a little bit of a high level. We are finding a lot of savings in our NFI forward rate, but we are taking a little bit of a conservative approach. Our conservative approach is really when we think about our material savings, we are finding savings in the EV space, etcetera, as we kind of move forward. But one of the things we're doing is we're taking a little conservative approach because as we think about the competitive dynamics, we're trying to determine if some of that is gonna be given into price. Right? So that's why we're that's why we're just slowly ramping up from the 65 versus going all in until we kinda see how those dynamics play out. Hey, Maggie, there's all kinds of sub projects under NFI Forward. We call it mesh, but the combination of the parts businesses of ADI and NFI in North America. There's the rationalization of some of our fiberglass manufacturing facilities. There's the combination of our ARBOC and ADI North American manufacturing facilities and so forth. So of course, we put plans in place, we do the math. But as we've been executing on some of that stuff, the size of the opportunity is starting to look a little bigger on a few of those projects. And that's why, as Papasu said, we've inched it up from kind of a 65 to 67. The original cadence that we provided of how much we'd see in 2020 versus 2021 versus 2022 is still approximately the same. The the the target the the project's actual execution are kinda right on track from a milestone perspective and slightly ahead from a savings perspective. Okay. Great. That's that's very helpful. Second question here, sort of back a bit on something that Chris asked at the top of the call. He noted taxes increases increasing in The UK, and and then, you know, we're looking at commodity prices basically across the board with the exception of maybe a couple up significantly. We haven't yet got to the point of wage inflation, but there's a proposed minimum wage increase in The US potentially down the road. And and it's been a very long time since we've had inflation of any kind, but it is something that seems to run out there. So I I'm wondering if you could help us understand how, wage and raw material input cost inflation can, a, be passed on, or, b, perhaps, dealt with in another manner. It's good question. So, you know, as as Papasu said, the the the broader the first part of your question, the the broader average, or effective tax rate, you know, there's a delay before The UK tax increase comes into 2023. As you said, who knows what happens in Canada, US over the next period of time. We are taking a broader look at our ULC structure and the tax structure of the business to see. We've got some ideas about how that may be the ability to be changed or modified going forward. Stay tuned to look for that. From a cost perspective, remember a couple of things. First of all, labor is probably eight to 10% of the cost of a bus. So it has an impact if labor goes up, but it's not a massive impact. The second issue is that the vast majority of what we buy is components or or subcomponents or parts as opposed to pure raw material that we buy in, you know, steel or aluminum or or stainless carbon steel or stainless steel. So when we put our bids together, remember that what we do is we will get a quantity that's firm and a quantity that's auctioned. We'll know the configuration. We then will basically get a costed bill of material, which includes, you know, multiyear pricing, and then we'll add a targeted dollar margin. So we effectively bid, based on a a kind of a cost plus dynamic with inflation effects impacted in it. Again, the raw material in a bus might be 20,000 plus or minus dollars. It's it's an impact, but it's not massive. So we work with our you know, the mills and the providers to get, you know, as far out pricing as we can. Of course, that dynamic is is very short term in in orientation. So then the real risk becomes our contracts that we've already got in place that have options. The good part of those contracts is almost all of them, if not all, have some kind of purchase price escalator that allows us to actually increase price based on inflation. So if somebody had a, you know, very simplistically, a new contract in 2020, they had options for '21 and '22, we have price escalators if they convert those options in those out years that handle the vast majority, if not all, or in some cases, even more than inflation. So we work off a purchase price indices. So it's not a perfect science, but we're pretty well protected around the risk associated with those things. Okay. Great. Thank you. And then one final question for me, just switching gears. Looking at the motor coach industry in North America and The UK, it's it's obviously been, you know, having a a bit of a recession for at least a few years now. Clearly, reopening is happening in many parts of the economy. I don't know if it's smart or not, but it sounds like tax is just ripping the band aid off and going fully open. And so I guess my question here is, you know, there's likely to be a gradual recovery in your motor coach business as as things continue to sort of normalize. What is the competitive landscape gonna look like by the time we get there? I know there's been some challenges in the industry with some of your competitors, but I I'd I'd really be curious to hear your view on that and how that, may impact your positioning as things improve. Yeah. You know, this is one of the things we spend an awful lot of time on. So, you know, if we just go back in in to the beginning of 2020 or even into 2019 and before, the motor coach market in North America is not one homogeneous market. There's subsegments. Right? So there's the tour and charter guys, which is probably half the market. And these are guys who are moving sports teams or church groups or, in some cases, regional tour and charter, in some cases, national and so forth. That market has been decimated. Nobody's moving. The other major market is the line haul guys, the greyhound or the mega bus type people. And, of course, universities have been stopped, inter cities kinda stopped, so that place has been decimated. And then the other kind of segments are the the government type operators of motor coaches, which has continued, but, you know, the limo guys or the the employee shuttle type things. So there's a couple of things in terms of the the market and our personal dynamics. A, we stopped building more commercial motor coaches and stopped as if we're not doing it now, but it's not like we've stopped. We've just idled the production lines. The second thing is we have finished goods inventory, not as much as more than we would have wanted to, but again, COVID made that market stop overnight. So we've got something like a 160 or a 170 motor coaches on the shelf, if you will, in various configurations. So as the motor coach market starts to recover, our ability to sell a finished product relatively quickly is pretty high. And, of course, that's, you know, one place that we're actually quite encouraged. Last week, Chris, Ian Smart and I and our MCI team hosted a conference call with about 200 different operators in The United States and Canada and had a conversation about, you know, how do they feel about the market, what's going on. There is actually a little bit of a sentiment of of more positive excitement of recovery later this year where, you know, two, three, four months ago, would have told you it wouldn't have been till 2022. So fingers crossed. The the fourth part of that discussion is, as you'll remember last year, we made the strategic decision to liquidate our pre owned coach pool. That that was roughly 350 units. And so, unfortunately, we took a balance sheet write down. We retrieved the cash. We got rid of those units. The good news is as there's a recovery, in addition to having units on the shelf or in the lot that we can sell, we've now got a clean balance sheet associated with used coaches, and that we can be a little bit more creative and flexible on trade ins going forward as that market recovers. So know, I think we've done a real job of containing the cost, a really good job of optimizing the combination of New Flyer and MCI into one operating business. There's lots of things that we're learning about more technology transfer, IT harmonization, and so forth. When that market recovers, and I firmly believe it will, that we're in a, I think, a really good place. You know, the competitors one, you know, one of the the biggest one of our competitors is a privately held company called ABC that's an importer of Van Gogh coaches. I have to believe they're having some interesting times from their balance sheet and cash flow perspective. The other one is is Prevo, which is owned by Volvo, who continues to to kinda participate in the marketplace. And I don't know. We'll see how it goes. The exciting part is we're also ready for the electric dynamic when it hits motor coach, and it's already started. We already have orders for electric coaches that we're actually building right now. So it's it's gonna be a slow recovery, but I believe it will recover in the next couple of years, and we're in a good place. Thanks, Paul, and thanks very much, everyone. Well, I'll pass the line over. Thanks, Maggie. Thanks, Maggie. Jonathan Lehmers with BMO. Your line is open. Thanks, Paul. Appreciate all the commentary on the competitive picture for Motor Coach and New Flyer. On Alexander Dennis, how do you see their newer ZEDD products as competitively positioned in terms of price and value for The UK and Europe? It's it's a really good question, Jonathan. Here's a couple of things. We were first Alexander Dennis. At that time, the strategy was to team with BYD, and that's now going three or four years back. That has gone really, really well. The partnership where BYD provides the chassis, we body it and deliver to the customer and so forth. The competitive pressure from a couple of the other guys in The UK, namely Upair and our friends at RightBus. RightBus, as you know, went through kind of a chapter 11 type event, I guess, a year and a half ago now. We are in a really good place with the size of vehicles and the type of vehicles, meaning single deck or double deck. We made a deal without with BYD that we actually will now start to build their chassis, so it'll be a far more of a build in UK type position. And even better now that the government is stepping up to provide economic support to private operators to for zero emission adoption. It isn't as firm and as hard as, if you will, in The United States with Buy America percentages, but there's a Build in Britain type mentality around those awards. And so I think what Paul and the team over there has done is really well really good in terms of the quality of the product, but now the deeper integration with Alexander Dennis. And so the exporter sorry, the importers, if you will, into The UK have not up to this point, you know, some of the other Chinese type players made any real major traction. In Europe, as you know, we've had a couple of key targeted areas. We got into Switzerland. We're now into Northern Ireland. We're into Germany. And the strategy there is gonna be different. It's gonna be integral type Alexander buses, Alexander Dennis buses, with our own battery strategy. This is where the partnership and coordination with New Flyer comes into play about how we package them, the strategy associated with sourcing cells, battery management systems, and so forth. But remember, in Mainland Europe, we're very much targeted at this point as opposed to mainstream. Longer term, I really quite like Alexander Dennis' competitive position. Okay. And a couple of questions for Papasu on the guidance. Within the new flyer forward cost savings numbers that you've provided to us, are you able to break out those by segment? What portion will be in parts versus manufacturing? Yeah. That one, we do have that kind of information. And and, Jonathan, we may wanna follow-up with you on that one. Yeah. I think, Jonathan, in the in our MD and A, we break down within the manufacturing and aftermarket segment what was savings for 2020. So if you're in the detail, of the MD and A as a breakdown between the two segments, and then it kinda keeps that similar profile, I think. But as as as things go on, we'll continue to update, I guess, on exactly where the savings are. So every time in our MD and A, we'll report kind of where the savings were recorded. And then then and again, the mix too between the the areas that Paphatma mentioned earlier, materials, manufacturing overhead, and then SG and A. Okay. Thanks. And on the 2021 EBITDA range, does that include government grants and subsidies? And are you able to provide a sense of what range, you know, might be reasonable for this year? Yeah. So, I mean, that's that's something that's a little bit variable right now in some of our cases. What we do know today, we are looking at those subsidies into our But just to Jonathan's point, we have included an assessment or an an estimate, which off the top of my head, I don't know exact number, of what whether it's UK furlough support or the SEWS program in Canada. It is embedded in our 02/20 to February, so it's not additive. The the issue, I guess, will be is ultimately, you know, what do we achieve or accomplish as opposed to what our estimate was. I don't think we've provided a guidance on on how much we think we'd get in 2021 specifically associated with SUS. No. We have not. Okay. I'm just thinking it's relevant for, you know, rolling forward to 2022. Alright. Thanks for your comments. Thank you, John. Kevin Chiang with CIBC. Your line is open. Hey. Good morning, everybody. If I could if I could go back to maybe some of the comments around, you know, maybe looking at strategic investments in in your zero emission bus portfolio. And and just when you when you look across the the landscape of transportation, there's there seems to be, obviously, an acceleration across multiple modes to to electrify transit. Just wondering how important it is, you know, as you sit here today in the early innings to to secure that supply chain. You know, like, this morning, you saw GM is looking to build a second battery plant with LG Chem. And and and and and and just given the size of the the the transit bus market, which is which is arguably relatively small compared to, you know, the total vehicle market, is there a necessity on your part to to to kinda secure that supply chain so that so that you're not caught in a situation where you're not able to get battery modules to to eventually build those battery packs in in your facilities? And and are you seeing anything now just given there seems to be some supply chain chain constraints already here in, in 2021? So, you know, we have not been disrupted on self supply today from Axalta or a one two three different batteries from today, for our businesses nor the BYD supply of chassis to our our friends at Alexander Dennis. So that's the kind of where we are today. Your comment about surety of supply going forward as everybody's chasing electrification is absolutely valid. And so we are actively and deeply engaged in wherever we go on self sourcing that we have not only a relationship with ultimately who might package those batteries, but ultimately securing our own portion of that source of supply. That is absolutely fundamental to our business because you're right that the the battery electric portion of buses compared to the demand for vehicles, whether it be cars or trucks or whatever else, is gonna be huge. So we're we're deep, deep in that, and that is effectively a core confidence or a strategic imperative for our business to ensure we have that supply. And and, you know, when you think of that battery, I guess, the the electric battery supply chain, you're you're doing the battery packs now. You know, you you've done a good job historically of kinda insourcing more of the manufacturing so they can capture more margin. Can you continue to move up what I'll call the battery supply chain or or or or is is, for example, creating battery modules just not something you wanna get into, or or is that something you're also looking looking at today? Well, I would say no, Kevin, and and here's why. We've seen all these z e bus ZEV bus companies, all SPACs, whatever make all these unbelievable promises around volume of vehicles, but also battery pack manufacturing and infrastructure or energy and all this other stuff. Look. At the end of the day, we need battery going on our bus just like we need a window or a seat. And the pace of change, not only the technology, the energy density, the range performance, the health life of a battery, as well as the price is gonna continue to change. And so our strategic decision is not to be to be there, but to be the best, smartest buyers of that stuff and the most agile so that we're not overly, you know, pregnant or married to a certain supplier. At the end of the day, no disrespect to all these cell guys, but they're largely gonna end up very similar in commodities. And we need to be really, really smart and agile at how we move that. And as you your question previously, the ensuring we have source of supply is absolutely fundamental to our business, and that's what we're focused on. But I don't think you're gonna see us moving too far down the chain and investing money in something that's changing at a rapid pace with some pretty big gorillas and a whole bunch of other guys trying to play in that space. We wanna be agile and efficient as possible. That's, that that's helpful. You know what? I'll leave I'll leave it there then. That's, that's helpful for me. Thank you very much, everybody. Thanks, Kevin. Thanks, Kevin. There are no further questions at this time. I'd now like to turn the call back over to Steven Hink for closing remarks. Thanks, Jack, and thanks, everyone, for your questions and for joining us today. Before we wrap the call, we will remind everyone that we will be holding our annual general meeting virtually on Thursday, 05/06/2021. We will also issue our q one twenty twenty one results on the same day. Details on how to join the AGM will be posted to our website. And finally, before we wrap, I just wanted to mention that we are launching a new ESG component of our website. So we should have that up soon, and we're we'll have our latest ESG report will be published in May 2021 as well. Thanks, everyone. Have a great day. This concludes today's call. We thank you for your participation. You may now disconnect.