NFI Group Inc.

Thank you, Jessa, and good morning, ladies and gentlemen. Welcome to the Second Quarter 2015 Results Conference Call for New Flyer Industries.

Joining me on the call today is Glenn Asham, our Chief Financial Officer. And for your information, this call is being recorded and a replay will be available shortly after the call.

As a reminder to all participants and others regarding this conference call, certain information provided today may be forward-looking and based on assumptions and anticipated results that are subject to uncertainties. Should any one of these or anyone -- 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 the company's press releases and other public filings with the securities administrators for more details.

Let me start today's call off by saying how pleased we are with our results and our efforts that have been awarded with a solid second quarter. Through an advantageous customer mix, our operational excellence program, our cost management and impressive results from our aftermarket team, we exceeded our own expectations this quarter and so far in 2015.

In a moment, Glenn will take you through the details, but a few comments to set the stage.

Total revenue was up 8% year-over-year, with adjusted EBITDA up 45% year-over-year. Bus manufacturing revenue was up 8% year-over-year, with adjusted EBITDA up 61% year-over-year.

And aftermarkets revenue was up 11% year-over-year, with adjusted EBITDA up 28% year-over-year.

We're very pleased with the progress of all the 3 major initiatives that we launched this year from a strategic perspective. First, the upgrade of our Oracle platform to the latest version of Oracle R12 is going well.

Project United, the transformation of our Anniston, formerly the NABI Bus manufacturing facility into the New Flyer family and building the Xcelsior platform. And finally, the launch of Project Convergence, which is a synchronization and combination of our spare parts businesses between NABI and New Flyer.

I'll now turn it over to Glenn who will begin our call by taking you through the financial results and then following Glenn's remarks, I'll provide some commentary on the bid pipeline, our order activity, the U.S. funding and market outlook and some exciting news about our New Flyer electric bus activity.

After that, we will open up the call to your questions.

And with that, I'll turn things over to Glenn.

Thank you, Paul, and good morning, everyone. I will be highlighting certain 2015 second quarter results and provide comparisons to the same period last year.

I will focus my commentary on this call to providing key financial insights that will then allow more time and attention on our market, business and strategic efforts. I would like to direct you to the company's full financial statements and management discussion and analysis of financial statements that are available on SEDAR or the company's website.

I do want to remind you that New Flyer's financial statements are presented in U.S. dollars, the company's functional currency and all amounts are referred to in U.S.

dollars, unless otherwise noted.

The company generated consolidated revenue of $375 million in the second quarter of 2015, an increase of 8.2% compared to $346.5 million during the second quarter of 2014. New Flyer bus deliveries increased 2.1% for this quarter compared to the second quarter of 2014, despite being negatively impacted by an increase of 63 equivalent units in total bus inventory at the end of the second quarter of 2015.

This increase is due to the transition to the Xcelsior platform at the Alabama facility. Management expects to reduce this excess bus inventory by year-end.

Average selling price per EU increased 5.3%. The increase in average selling price is the result of a more favorable product sales mix of bus pipes during the second quarter of 2015.

The average selling price can be volatile when comparing 2 fiscal quarters as a result of the sales mix.

Aftermarket increased 10.6% -- sorry, aftermarket revenue increased 10.6%. The increase in 2015 Q2 aftermarket operations revenue is primarily a result of increased volumes from the Chicago Transit Authority mid-life overhaul program.

The CTA mid-life overhaul program stream of revenue is included in June 2015. Excluding the CTA mid-life overhaul program, the revenue from aftermarket operations for both 2015 second quarter and 2014 second quarter was $72.4 million.

Bus manufacturing operations adjusted EBITDA increased 61.3%, primarily due to higher margins as a result of a favorable sales mix and cost savings achieved from the transition to the Xcelsior in Anniston when comparing the 2 periods. Management had anticipated and previously provided guidance that, on average, margins on planned orders or orders planned for production in fiscal 2015 are expected to be higher than the average margins achieved during fiscal 2014.

Adjusted EBITDA from bus manufacturing operations per EU can be volatile on a quarterly basis. And therefore, management believes that a longer-term view should be taken when comparing bus manufacturing operations margins.

Aftermarket operations adjusted EBITDA increased 28.3%, primarily due to additional adjusted EBITDA generated by the CTA mid-life overhaul program and improved profit margins. Management improves -- management believes that aftermarket operations core business is improving as a result of improved aftermarket parts market fundamental and the benefits to the product mix that has resulted from a broader portfolio of services and parts offerings to customers.

Net earnings increased by $8.8 million and earnings per share increased by $0.16. The company reported net earnings of $12.4 million in the second quarter of 2015, representing an improvement compared to net earnings of $3.6 million in the second quarter of 2014, primarily as a result of improved earnings from operations, offset by an increase in income tax expense.

The company's net earnings per share in 2015 Q2 were $0.22 compared to $0.06 generated during the second quarter of 2014.

The company generated free cash flow of CAD 26.4 million during the 2015 second quarter as compared to CAD 15.9 million in 2014 second quarter, primarily as a result of improved earnings from operations. The company declared dividends in the second quarter of 2015 of $8.4 million as compared to $8.1 million in the second quarter of 2014.

The amounts of dividends declared increased in 2015 second quarter as a result of the dividend rate increase in May 2015. The current annual dividend rate is CAD 0.62 per share, which is paid monthly.

The free cash flow payout ratio of 31.9% in 2015 Q2 improved as compared to 50.9% during the second quarter of 2014. On a year-to-date basis, the payout ratio of 42.7% for 2015 also improved compared to 61.1% for the corresponding period in 2014.

During 2015 second quarter, the company increased its borrowing from the revolver by $35 million to temporarily fund the working capital requirements primarily caused by increased inventories and decreased accounts payable. Bus inventory increased by 63 equivalent units as compared to the previous quarter, primarily due to transition of the Anniston plant to the Xcelsior product line.

Some of the final NABI buses were produced earlier than the customers need to facilitate a smoother transition to the Xcelsior-only production. Management expects to reduce the excess bus inventory through the delivery of these buses prior to the end of fiscal 2015.

With that, I will turn it back to Paul.

Thanks, Glenn. So I'd like to talk a little bit about our bid pipeline and our order activity and our backlog, and then provide some insights into the current issues in our market.

The New Flyer bid universe has remained at or above 20,000 equivalent units for the last year, which we believe reinforces our view of a robust market demand, driven by an aging fleet and U.S. recovery of the economy.

The pipeline of active equivalent units, which consist of bids received with our proposal and process at New Flyer, and proposals that we've already submitted and waiting award. The total number of active EUs at the end of the second quarter 2015 increased by 7.1% compared to the same -- the first quarter of this year.

This increase is consistent with our expectations of forecasted bid activity and market outlook.

Our 2015 Q2 LTM book-to-bill ratio, which we define as new firm and option orders divided by deliveries, was 121%, which now has exceeded 100% for 9 of the last 10 quarters, and a ratio above 100% implies that more orders are being received than are being filled, which is indicating an increased demand for the New Flyer products.

At the end of the second quarter of 2015, our total backlog, which includes both firm and options, was 7,011 equivalent units, which is valued at $3.49 billion, which is compared to 7,193 EUs, valued at $3.57 billion at the end of the first quarter. We're pleased to note that the firm portion of the total backlog has increased as has the ratio of firm to total.

Now as discussed in our orders in backlog press release that we issued at the end of the quarter, July 15, 2015, we had an additional 1,238 equivalent units of new firm and options that were pending, where approval of the award had been made by our customers, board, counsel or commission, as applicable, but purchase document had not yet been received by New Flyer. And therefore, we did not include it in our Q2 backlog.

Since that release, we've now formally received the contracts of 2 of the 3 customers, which total nearly half or 513 of those EUs, with the remaining paperwork expected from the last customer very shortly. All 3 awards will be highlighted in individual press releases once we have approval to issue them as granted by our customers.

From a new product development perspective, much has been reported by New Flyer in the media in the last year, on the electrification of the transit bus fleets in North America and candidly, around the world. We have extensive electric experience, with the largest installed fleet in North America of electric trolley, diesel electric hybrid and now, all battery-electric buses and service.

We just recently completed the testing of our Xcelsior XE40 battery-electric bus to the FTA bus test program standards, also known as the Altoona testing, and saw excellent results in the areas of safety, structural durability and integrity, reliability, performance, maintainability, noise and a fuel economy. We are very pleased with the performance of our electric bus.

With respect to the U.S. funding environment and the overwhelming majority of transit buses purchased in the U.S.

government using federal funds, New Flyer actively monitors federal, state and local funding mechanisms and budgets. The U.S.

administration's proposed GROW AMERICA Act, a revised multiyear service transportation bill that was introduced to Congress earlier this year, continues to be hotly debated, both on the amount of funding and the funding source. Since then, the house and the senate and last week, President Obama have amended the Moving Ahead for Progress in the 21st Century, or what's known as MAP-21 authorization.

It's been extended twice now to extend the current funding at current levels. This latest bill ensures the solvency of the highway transportation fund through October 29, 2015, and is the 34th short-term extension since 2009.

It is our view that additional short-term extensions to MAP-21 are highly probable.

From a Canadian perspective, in April of this year, the government in Canada announced that the federal budget would invest an additional CAD 1 billion in major transit infrastructure projects. Investments we made through a new public transit fund and will be on top of the current funding programs already in place in the new building Canada plant.

These new investments will start flowing in 2017 and 2018 at CAD 250 million per year to increase to CAD 500 million in 2018 and 2019, and CAD 1 billion going thereafter. From that perspective, we're encouraged about the Canadian marketplace.

Now from an outlook perspective and the remainder of 2015, we continue to execute the transition of production at the Anniston facility to our Xcelsior platform, which I'm very pleased to report is on budget and on target and to be completed in the second half of this year. In fact, I visited the Anniston plant a few weeks ago, and was very impressed with the physical, cultural and process transformation that's in place.

And now that facility is up completely to New Flyer standards.

The facility is completing the remaining NABI buses and it's currently building 8 Xcelsior buses a week and headed to a run rate of 12. In fact, on Tuesday of this week, the first all of Alabama-built Xcelsior was headed over to the Macon-Bibb County Transit Authority of Macon, Georgia in what we called our first celebration.

We remain on track to invest approximately $20 million in direct operating costs and CapEx and have utilized our operating cash flow, leases and credit facility to make that happen.

As of the end of the quarter, June 28, 2015, we incurred $13.2 million in total spend, $6 million of which was expensed and $7.2 million of which was CapEx. We're pleased with the progress and expect the transition to prove our competitiveness and payback through captured cost reductions and synergies, currently expected to be approximately $14 million annually.

As for the market, we continue to see pricing and bus competitions normalize. And we expect margins realized this year will be on average, higher than those realized during fiscal 2014, as Glenn discussed earlier.

We continue to pursue costs and overhead synergies as a result of our focus exclusively on the Xcelsior platform and as we do in daily operations through our OpEx strategic sourcing and supply initiatives.

You will note in our MD&A that during the first week of July 2015, we had no scheduled assembly-line entries, as we decided to provide the opportunity for our employees to enjoy planned vacations that would allow -- that would also lessen future volatility in manpower due to individual vacations throughout the year. This resulted in a reduction of approximately 35 EUs being entered in production 2015.

Our master production schedule, combined with our current backlog and our orders that we anticipate, is expected to enable us to continue to operate at a corporate average line entry rate of approximately 50 EUs per available production week for 2015. And as always, and as Glenn mentioned, we remind you that production rates vary quarter-by-quarter due to sales mix.

And in 2015, we are also affected by the phased introduction of the Xcelsior platform into Anniston. But all is well from that perspective.

With respect to our aftermarket segment, we reiterate our forecast of core parts revenue growth at approximately 5% during fiscal 2015. And as Glenn mentioned, aftermarket revenue generated rate from the CTA mid-life upgrade program has ended as of June 2015, which represented 18.6% of the aftermarket revenue during fiscal year 2015 -- sorry, during year-to-date 2015.

I'm also really pleased to report that after 2 years of investment in our company, Marcopolo has chosen to appoint a board member to New Flyer. And so as you will note in our press release and our MD&A, New Flyer announced that Mr.

Paulo Nunes has been appointed to the Board of Directors, which now consists of 8 independent members, and myself.

The appointment of Mr. Nunes was proposed by Marcopolo, New Flyer's largest shareholder, pursuant to their investment agreement dated January 23, 2013, which gave Marcopolo the right to propose one nominee as a Director of our company.

Mr. Nunes has deep and extensive experience in manufacturing, distribution and automotive-related sectors, and having leadership positions for almost 40 years, now acting independent automotive business consultant and serves currently as a board member of many Brazilian companies, including Marcopolo.

So in summary, we're very pleased to see the operating results year-to-date in the last 12 months and how that translates into how our shareholders continue to view New Flyer. As discussed last quarter, we raised the New Flyer dividend by 6% and we continue to assess our performance and are actively engaged in discussions on the capital structure and dividend policy with our Board of Directors.

Sustainability of our performance and the appropriate yield for investors are key to our philosophy.

We remain focused on OpEx initiatives and very encouraged by the progress and transition of our building only Xcelsior buses in Anniston. We're encouraged by the improved market opportunities, our backlog recovery, especially the front portion of the backlog, and our improved book-to-bill performance.

New Flyer continues as the leading provider of heavy EU transit buses and a leading provider of aftermarket parts in Canada and the United States. We're proud of our history and excited about our future.

And as our tagline says, New Flyer, built to rely on.

Thanks for listening today. With that, I'll invite your questions.

Maybe just quickly on the comment you just had on the new board member. Just wondering, maybe specifically, why now?

Was there a catalyst from Marcopolo to want to add a board member now versus a couple of years ago? And is there any read through in terms of your diversification strategy, in terms of expanding your bus fleet product line or entering to new geographies?

Great question, Kevin. There's nothing that we're reading into it, no facilitator or transact -- or triggering event of why they did that.

Marcopolo's a global player. Wanted to introduce their presence in North America, did so through investment in Flyer.

We have lots of active conversations with them about projects, about products and so forth, from a day to day operational perspective. Paulo is an independent board member of both Marcopolo now and independent board member of New Flyer.

And we're excited. I mean, he's got lots of experience globally in the automotive and the manufacturing sectors.

We don't read anything other than that we're excited about how we're doing. We've come a long way since they invested.

And they now obviously think Paulo can contribute to the growth and diversification of New Flyer.

That's great color. And then maybe secondly, I know you're not going to provide 2016 guidance, but think of it simplistically, for the $14 million, you're going to save from this restructuring, first, do you anticipate realizing that full benefit all in 2016?

And if the answer to that is yes, simplistically, should we be thinking of earnings in 2016, at the very least, being $14 million higher? Or will it take some time to realize the full benefits from this restructuring?

So let's start with -- we have already started to see some of the benefits from the introduction of Xcelsior into Anniston. So some of those benefits are already sitting in our 2015 results.

I would say more so in this quarter than the previous quarter. We do expect, by 2016, to be realizing the full benefit.

But it's not as simple as just adding in the full amount because, as I said, we already have some of that benefit in the 2015 results. And obviously, there's great many other factors that will ultimately contribute to how 2016 lines up, but we -- as I said, we do -- would anticipate that the full benefit of the Xcelsior rationalization at Anniston would be in the 2016 results.

Perfect. And just last one for me.

Looks like you're going to see -- you are seeing a step up in your free cash flow, especially as you get through this restructuring. I'm just trying to get a sense of what you think your priorities for this elevated free cash flow is going to be when you look at your dividend?

When you look at your leverage? And when you look at M&A?

If you can provide some color there, that would be great.

Well, first of all, the dividend, as we talked last quarter, candidly, since we transitioned from an IDS to a common share, with our heads down, very focused on cash flow generation from the business, making sure we can make the dividend. Last quarter, we came to the realization that the forecast for the rest of the year and going forward looks positive and we made the decision to increase the dividend by 6%.

We also, at the same time, really kicked off a very, very active debate at the board. And of course, with our team, about what the right dividend level is going forward, with the framework, with the capital allocation structure.

And candidly, that was a good part of our board meetings yesterday, is to really start to make sure something in place is robust and that we can work to. From an M&A perspective, we have not been shy to say that New Flyer, its long-term goal is in some way, shape or form, to diversify and to continue to grow.

But we were very clear that 2015 was a year of let's make sure we grab the transition and the synergies. And if you'll pardon my expression, let's not screw it up when we integrate these businesses together, at the same time of doing an upgrade to our IT system.

So we're really pleased that what we've been able to do from a project management and an implementation perspective. We continue to look for M&A activities, both in -- in fact, in all 3 areas, in the diversification of our product in markets, in our aftermarket perspectives and candidly, in the supply chain.

And so we now are provided with some opportunities, both free cash flow and debt capacity that, if we wanted to do something, if we find the right acquisitions, that we can move on that. But so the plan, the road map has not changed.

Clearly, the focus this year was to grab every penny of synergy and make sure it's sustainable for the long term. And we're very, very pleased with that.

So I know we always get into this discussion around margins, around the buses. But I mean, this was a pretty remarkable quarter, probably the best quarter in terms of EBITDA per EU in probably 4 years.

So I guess, is this something structural or was there some fairly unique product that got run in the quarter? Any color about the suitability of that margin would be great.

Well, there's a bunch of things at play. So as you know, Chris, and you've walked the factory floor, the variability of the product and depending on the customer and depending on the type of -- whether it's Canadian, U.S.

customer now with the currency the way it is and whether we're selling in Canadian or U.S. dollars, the OpEx initiatives that we -- we had a long conversation with the board yesterday about the reality if the board allowed us to invest significantly in our businesses when -- a time when EBITDA was going from $100 million to $60 million.

Knowing full well that, that's like turning a ship that you invest, and it doesn't happen overnight, it takes a while. And so we really are starting to hit stride on things like labor efficiency, the lead time to be able to fill slots and therefore, to do engineering, the supply chain that will work around strategic sourcing and using a little bit of our leverage now that we've got to combine New Flyer NABI building effectively all the same bus platform and so forth.

We also do have some -- and we gave color and we gave [ph] that as we headed into '15, that 2014 had some pretty tough margin customers in there that were bleeding through. Some of them were still in the early part of this year.

And we gave color and provided guidance that we were going to see improved margins because we saw pricing in the markets normalized. And so all those factors are contributing.

And we feel very comfortable with our ability to kind of work in the next, at least as long as our forecast period works, to continue to improve and deliver results in that neighborhood. We're very, very pleased with that.

So I guess, what I'm trying to get at is, was there anything in that quarter that I should take as not able to be sustainable? Like was there any kind of special models or anything like that?

Because historically, that's what's sort of thrown it around, is the product mix. But I guess, if I'm listening to what you're saying, is maybe not always at that level, but certainly higher than what we've seen through the last few quarters.

So aiming at a number kind of in the low- to mid-30s in terms of EBITDA per EU is maybe not out of the question?

Well, as you know, Chris, I can't just look at one quarter. And for sure, we believe we are on a path of improvement.

But just jumping to predict off of one quarter is always a little bit dangerous in our business as we do see volatility due to the contracts. Just so improving in the high-20s, for sure, can be different to the low-30s, possible.

Okay. Good.

And then guys, the aftermarket margin, I know we had some good performance in Q1 and Q2 also was really strong. I'm just wondering, is there something going on in the market dynamics, similar to what you saw in manufacturing where some things going on, maybe that's not instantly obvious other than just customer demand?

Are you guys starting to see different competitive behavior? Or anything like that, that's giving you the opportunity to expand margins?

Your analogy or comparison to the bus market is probably a fair one. If we go back to right after 2008 and 2009, when the -- the global financial crisis, the bus market didn't drop off immediately because there was already appropriated money in the system.

And it dragged on for a little bit before it was really impacted and we saw really, really low quantity of competitions, not a lot of buses, crazy pricing and then so forth. The parts market was affected a little bit earlier because operating budgets, on a calendar basis, at our transit authorities got cut relatively quickly.

And so as we -- I think we've discussed in many calls in the past or some of our materials, the customers stopped buying inventory for stock and replenishing their warehouses for maintenance. They started burning those down and then buying to fix individual and specific projects and buses.

In the last couple of years, add to the dynamic that there is much better and much more improved health of state funding and civic funding, the reality of the New Flyer strategy, of a little bit of a rationalization, of course, Orion bus went away. We were successful in acquiring their parts business.

So we have a broader basket, a broader number of parts -- buses to support. Add to that the New Flyer acquisition of NABI, which have allowed us now to do cooperation on sourcing, creativity and analysis on pricing strategies, optimization of inventories and those kind of things.

We haven't really seen, and we don't want to take any of our competitors for granted or be naive in their activities, we haven't seen aggressive growth strategies yet from any of our competitors like we've tried to do in the aftermarket. And I'm not sure I can explain that, other than 50% of the fleet is either a NABI, a New Flyer or an Orion bus.

And we are not passive in trying to support our buses. We've become very, very aggressive to make sure that we offer any customer a variety of ways to sell -- to support their buses, whether they want transactional parts today on a quote basis, whether they want programs and contracts and a multiyear, kit strategies, vendor managed inventory strategies, the Chicago program was really important to us.

There's 1,028 buses with our logo in the front of it and we were determined to make sure those buses are overhauled and supported and are going to live the next part of their lives with authentic and supported New Flyer parts. So you kind of -- a long answer to a short question, Chris, but you add all that stuff up, and there may be some market dynamics, but we're going to take a little bit of credit that we got very aggressive at going after supporting that installed fleet.

Okay. Great.

And then, just one last question, just on capital structure. One of the things that's kind of new is that with the series of debentures you have out, I guess, you have a call that becomes active at the end of June and there were some triggering ratios, I think, based on the current share price.

And I think, if you look at it right now, you might be, over the next few days, probably eligible to start thinking about that. Any thoughts on the benefits of keeping those debs out versus forcing them in?

Sure. So as we look at it, first off, on the capital structure and our current level of leverage, we don't think there's any need to try to address a reduction in leverage.

So we're not looking to try to redeem them or in any way because in our minds, our call would only result in likely them converting to equity from a cash flow standpoint, but better off sitting [ph] from the company's point of view. Better off as sitting there as debt and taking the gain [ph] of the interest net of the tax.

So I think our view is borrowing some change in the business, we're quite content just to let them sit there to maturity.

Paul, just thinking about the performance in the quarter on the EBITDA per bus. And I'm wondering, some of the stuff that you'd be working through, certainly, would be orders that you would have booked in the past.

And we would definitely be in a lower steel price environment and FX, certainly, I think would have helped. And my understanding is engines, transmissions and brakes would be kind of U.S.

dollar anyway. So really, your benefits would be on labor and steel.

Wondering if you could help us think through that benefit in terms of lower steel and FX impact in the quarter more specifically.

Sure. Well, first of all, raw material or commodity prices have a relatively low impact on our business in the short term or medium term.

I mean, at the end of the day, the steel that goes on a bus is, I don't know, 5% max of the cost of building that bus. And we are -- have multi-period contracts in place for the source of those kinds of things.

So the end items that we buy, that we put in a bus, whether it's axles, air conditionings, engines and so forth, most of that stuff, obviously, we know the cost of it and have a cost price from a supplier before we actually bid to the customer. So we're not, in the short term, impacted by volatility or rapid volatility.

The FX does play a role, surprisingly, and actually encouraging from our perspectives. We work really harder the last couple of years to do our best to try and get close to a natural hedge if we can, where we're not either benefiting or hurting from foreign exchange issues.

The reality is, depending on when we price the Canadian customer contract, when they decide to buy them and build them, has an impact on our P&L in that period. And if we have a budget or a forecast to build a Canadian customer at a lower, effectively priced, because it's a Canadian dollar denominated price, and that customer decides to pull it forward or push it back, that will impact this quarterly volatility that Glenn was talking about earlier.

So we are laser-focused on managing the costs and the building materials. We are aggressively continuing to go after our overhead costs and our -- ensure that building station process has happened in the shops, so we got maximum labor efficiency and maximum -- or minimum utilization of overtime and extra shifts and reprocessing and all those things.

And those are actually starting to punch through to be sustainable savings that we're very, very pleased about. So we'll always have, especially in this environment where the Canadian dollar where it is, when we build some Canadian customers that were priced a year or 2 years ago, we're doing our best operationally to offset those with maybe U.S.

customers that have a fair and appropriate margin for that work. So there will be mix and volatility.

FX has not played a major role and of course, where it does, at a roll up level, we've done some aggressive cash -- not aggressive, some prudent cash management and hedging strategies to make sure, again, that we're neither really harmed nor benefited from it.

Okay. So if we roll forward into Q3, and the -- let's say the average EBITDA per bus comes back down to, let's say, the high-20s, is that simply just mix?

That -- because it seems there's just a lot...

Absolutely. In mix -- and every competition is different.

In some cases, we're bidding like crazy with a customer, we're trying to either retain or win, and we will be very smart and very aggressive at trying to retain that customer. In other cases, we think we've got a very strong, solid position with the customer and their selection criteria, we think, works in our favor and will price accordingly.

And at the end of the day, they're government procurements, there's lots of oversight to make sure there's best value for those customers at a very high effort at lowest price. And so it's not like we're in a completely elastic market.

But mix will always, always be the biggest dominant factor in any one quarter of whether it's fantastic or not. And that's why Glenn continues to guide us, look at our business on an LTM basis, and there's noise inside there, but the best indicator of a go forward for us at this point in time looks really to be an LTM-type approach.

Okay. So it's nothing that this quarter would tell you is a step change in the profitability.

It's all the things that you've been working on that get you to closer to 30. Or is it...

Sure. And look, margin is a function of cost and it's a function of price.

And at the end of the day, you know, and we've just discussed this with Chris, 2014 and early '15 had some work going through that was priced very, very low at a very difficult time in our marketplace. And we still have some very low priced work, but we've got some more normalized work.

So the blend in the average is in a better place today than it was a year ago, and a materially better place than it was 2 years ago.

Okay. And how -- Paul, how's Nova behaving these days when you're bidding against them?

Have you seen any change in the behavior?

Yes. Like -- we always point to this, but when we go back to '12 and '13, where there was 5 of us, 2 for sale, Orion was actively being sold by Daimler or tried to be, and then Cerberus was actively trying to sell NABI, and everybody -- we had a very low bid universe.

We also have 2 competitors for sale and it was very, very difficult. Obviously, Orion felt they couldn't make a go of it and exited.

NABI, we were successful in acquiring and we've been very strategic and very transparent and are trying to bring those businesses together. Nova's like -- look, they're owned by Volvo, a world-class player.

Nova's had some challenges with some difficult contracts that they took on. Nova has a much higher Canadian customer base of late and have been very aggressive with some Canadian customers.

And so I can't really comment on their strategy and their performance. All I know is that we are really focusing on supporting our core customer base and managing the workload through the facility to be able to be competitive.

And more importantly, so that our business, profitability and dividends are sustainable.

Thank you, Jessa, much appreciated. So ladies and gentlemen, thanks for listening today.

As a reminder, this material will be on our website, as well as our updated investor presentation. We look forward to talking to you next quarter.

Have a great day.