NFI Group Inc.

Thank you, Henry. Good morning, everyone and welcome to NFI Group's Second Quarter 2021 Results Conference Call.

This is Stephen King speaking. Joining me today are Paul Soubry, President and Chief Executive Officer; and Pipasu Soni, 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 results presentation that can be found in the Investor section of our website.

While we will be moving the slides via the webcast link, we will also call out the slide number as we go through the deck for participants on the phone. Starting with Slide 2; I would like to remind all participants and others that certain information provided on today's call may be forward-looking and based on assumptions and 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 were advised to review the risk factors found in NFI's press releases 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 3; we have included some key terms and definitions referred to in this presentation.

Of note, zero-emission buses or ZEBs consist of battery-electric, hydrogen fuel cell-electric and trolley-electric buses. Equivalent units or EUs is a term we use for both production levels and delivery statistics.

The majority of our vehicles represent one equivalent unit, while an articulated 60-foot transit bus takes two production slots and therefore is equal to two equivalent units or two EUs. On Slide 4; for those of new to the NFI story, we are a leading independent global provider of bus and motorcoach solutions.

Our purpose and mission is simple. We exist to move people.

In other words, our products move precious cargo. We are focused on designing, building and delivering exceptional mobility solutions.

On this slide, we've also included our stakeholder matrix that drives our strategic decisions and core operating principles that govern our behavior. I'll now pass it over to Paul to recap the quarter [ph].

Thanks, Steven, and good morning, everyone. I'm now turning to Slide 5.

In 2021 Q2, we experienced numerous positives as we executed on our strategic priorities of: A, winning the evolution to the zero-emission mobility; B, lowering our cost structure; C, strengthening our balance sheet; and D, supporting our customers as markets recover and as they transition to their fleets. While there has been significant progress related to vaccine rollouts and easing of government restrictions, COVID-19 is not yet over.

The pandemic continues to impact our people and has created notable supply chain challenges which in turn is disrupting our production schedule. It's not an excuse we're hiding behind.

It's our reality now. We have and we will manage through it.

We anticipate supply chain challenges to be transitory and like most other manufacturers who are navigating daily disruptions and working closely with our supplier partners. On the positive side, we have seen exciting growth in active procurements with bids up almost 50% from 2021 Q1.

Our North American public sales team is the busiest that it's ever been. In addition to the growth in procurements, we've also seen broad signs of market recovery and unprecedented levels of government support, with multi-billion dollars planned in public transit investments to come.

Although we view funding as the key driver for procurements, it is also worth noting that transit ridership is more than 80% up from early 2020 levels in some of the U.S. communities.

We continue to lead the evolution to zero-emission and ZEBs are now 16% of our total backlog. We've been awarded large ZEB awards in the United States, England, Scotland and Ireland, and we recently announced entry into the Australian market via strategic partnership.

In addition, we delivered our best performance ever on the U.S. Federal Transit Administration's low no grant program.

Plus in 2021 to-date, we've launched seven new zero-emission products and we remain on-track for approximately 20% to 25% of our annual deliveries this year to be zero-emission. Our company-wide transformation initiative launched last year, NFI Forward is on schedule and continues to meet its targets.

NFI Forward is designed to make as a simpler, leaner company with fewer business units and reduced footprint to drive margin improvement as top line revenue grows. In May, we released our third annual Environmental, Social and Governance Report for 2020.

The report focused on the three main components of NFI's sustainability pledge -- a better product, better workplace and a better world. The ESG report also introduced NFI's four pillar approach including vehicles, infrastructure, smart connected technology and workforce development, directly supporting the evolution of zero-emission technology, the need for equitable access for mobility and people development that will drive more sustainable future.

Once again, we are reaffirming our full year 2021 guidance for revenue of approximately $2.8 billion to $2.9 billion and adjusted EBITDA of approximately $220 million to $240 million, additional insights we've provided on today's call. I'll now turn it over to our CFO, Pipasu Soni to review NFI's Second Quarter Financial Results.

Thanks, Paul. Turning to Slide 6.

You will see that our backlog decreased slightly due to deliveries in the quarter, expiry of older options that date back to 2016 and timing of new orders. Our backlog remains at a robust 8,168 EUs with 16% being ZEBs.

Our year-over-year deliveries were up in all product lines primarily due to the idling of facilities in Q2 2020. Turning to Slide 7.

Total revenues increased by 75% year-over-year, largely driven by idling of production facilities in 2020 and from record quarterly aftermarket revenues. Aftermarket performance was driven by Asia Pacific volumes and significant volume increases in North America, the UK and Europe.

The continued improvement in Asia Pacific transit markets is a good sign for broader market recovery, given those markets were impacted earliest by the pandemic. Adjusted EBITDA was up by $76.1 million from the combined benefits of higher deliveries, NFI Forward savings and the receipt of $18 million in government support largely provided to assist with retention of skilled personnel.

Going forward, we expect volume recovery and margin improvement will replace the impact of wage subsidies received. Free cash flow was up by $58.5 million, a 136% increase over 2020 Q2.

A significant factor contributing to this increase was NFI Forward savings of approximately $13 million and additional free cash flow savings of approximately $1 million. Liquidity at the end of the quarter was $389 million, an increase of $70 million from the previous quarter, primarily driven by working capital improvements.

During the quarter, we repaid $46 million at debt for a year-to-date repayment of $161 million. In addition to repaying debt and funding strategic investments, we remained focused on returning capital to shareholders through dividends.

A key priority for 2021 is a focus on working capital. We saw the benefits of this approach as we lowered working capital days by six from the previous quarter, generating a $62 million inflow.

These improvements have come from better supplier payments, increased usage of purchasing programs, and improve collection processes. Going forward, we anticipate continued improvements to working capital metrics although supply chain challenges, product mix, and seasonality may cause some quarterly variants.

Turning to Slide 8. I'll explain some of the dynamics we're seeing with NFI tax exposure.

Our North American tax structure includes minimum tax components that are more fixed in nature plus variable components based on profitability and the impact of non-recurring discrete or one-time items, for which we normalize. As discussed in our previous financial results call, for 2021 Q1 on an annual basis, we expect our minimum fixed tax expense will be at the $18 million to $22 million while our variable taxes will be based on a range of 21% to 23% of adjusted pretax earnings.

During the second quarter, we also saw a tax benefit from currency fluctuations, which lowered our total adjusted ETR. We may continue to see these impacts during the remainder of the year.

As foreign exchange rates are very difficult to forecast, we will report the fluctuations and actual results, but we will not provide a forecasting methodology for this component of the tax expense. I'll also note that during the quarter, we had a $6.1 million tax expense related to the impact of UK legislative tax changes that will normalize for our adjusted ETR.

On Slide 9, you'll note that net earnings and adjusted net earnings improved significantly from the same periods in 2020. Both metrics were positively impacted by revenue growth, savings from NFI Forward, support from government wage subsidy and foreign exchange gains.

The derivative financial instruments noted on the year-to-date reconciliation of adjusted EPS relates to pretax gains on our interest rate swaps. Turning to Slide 10.

The NFI Forward initiative remains at or above targets. Included here are a list of projects that we've completed in the first year of the program and the projects that we are currently working on to generate further savings.

Since inception, NFI Forward has generated $41.5 million in adjusted EBITDA savings and an additional $2.5 million in free cash flow savings. Note that the additional free cash flow benefits are on top of the expected cash flow that will be generated from the adjusted EBITDA savings and our normal operating activities.

We remain on target with our original plans and anticipate that we'll reach a run rate of at least $67 million in annual adjusted EBITDA savings by 2023, plus an additional $10 million in annual free cash flow savings. These cost reductions will generate a significant leverage.

As markets recover, we'll grow revenues on a lower fixed cost base with expected drop through to adjusted EBITDA. On Slide 11, we reaffirm our guidance for revenue, adjusted EBITDA and cash capital expenditures.

I wanted to add a comment on seasonality. We anticipate that revenue and adjusted EBITDA for the third quarter will be down from the same period in 2020 and similar in profile to Q2 2021.

This is mostly driven by the impact of supply chain challenges and impacts on production schedule due to timing of customer orders. Fourth quarter revenue and adjusted EBITDA are expected to be higher than the comparative period in 2020.

A reminder for listeners that in 2021, Q3 will be a 13-week period, while Q4 will be a 14-week period for a total fiscal year of 53 weeks. I would like to now turn things back over to Paul to discuss the factor driving our longer term outlook.

Thanks for Pipasu. And now on Slide 12.

On this slide we summarized the unprecedented government support for public transit in Canada, the U.S., the UK and New Zealand. A significant amount of this funding is focused on zero-emission buses and infrastructure solutions where NFI has leadership positions.

These announcements are very encouraging, but they are complex and they're still going through the approval, negotiation and deployment phase. As such, we do not yet have all the details of when these proposals and funds will actually materialize in the financial results and buying and delivering of buses.

Turning to Slide 13. What we attempted to do here was to present our view of the timing of market recovery as it relates to public and private transit of motorcoach markets, essentially, a phasing of the recovery from the pandemic.

As mentioned, the North American public bid activity is increasing and we anticipate that this trend will continue for the seeable future, driven by an unprecedented levels of government support. We expect to start seeing an uptick in project awards in the latter part of 2021 and into 2022 and we expect production to significantly increase in the second half of 2022.

North American private coach markets are anticipated to reach 50% of their pre-COVID levels in 2022. Recovery here will be driven by travel and leisure, sports teams, universities, employee shuttles and colleges.

We've already started to see a shift in optimism from private coach motorcoach operators. This market will take longest to recovery from the pandemic.

In Europe, the UK and Scotland government support and customer demand is driving strong ZEB adaption and overall order activity. We expect to see these markets continue to improve throughout this year into 2022 and beyond.

Asia Pacific is currently experiencing higher aftermarket volumes, with new vehicle order activity expected to pick up again as the market enters its next purchasing cycle in 2023. Overall, our view is that the markets will recover in 2022, but it's likely 2023 before we see a return to pre-pandemic demand, production and delivery levels.

On Slide 14, we provide the latest update on the North American public customer bid universe. As mentioned earlier, active bids where we have submitted, or in the process of submitting a proposal, meaning they've had the most significant near-term impact on our operations, increased by 48% from 2021 Q1.

The forecasted five-year North American industry procurements developed through detailed discussions with transit agencies and from their published fleet replacement plans is down slightly from the first quarter. But this is primarily driven by the shift to increased active bids with agencies revisiting their capital plan as they now gain a better-understanding of the new government funding programs available to them.

At the end of 2021 Q2, 38% of the total bid universe were zero-emission buses, up 28% from the end of Q1, highlighting the ongoing evolution to zero-emission transit. We continue to see increased usage of purchasing schedules, which includes state and national contracts and cooperative agency purchasing agreements.

Since 2018, NFI has received more than 600 vehicle awards from these schedules, which highlights their growing importance within North American transit agencies as an effective and efficient bus procurement tool. I want to remind everyone that these schedules are not recorded in NFI's backlog as they do not have a defined quantity associated with them allocated to NFI or any other OEM at point of award.

Once a customer purchases a vehicle using one of these agreements, the purchase is recorded immediately as a firm order. Turning to Slide 15, it shows our targets through 2025.

We're well-positioned for the near and long term with expectations for growth with $3.9 billion to $4.1 billion in revenue and $400 million [ph] in adjusted EBITDA in 2025. Our performance will be driven by our sole focus on buses and motorcoaches where we have deep customer relationships and the ability to deliver highly-customized vehicles.

In addition, we'll continue to grow in new markets through ADL, and ARBOC. We have a proven track record in delivering zero-emission buses and we will lead the market's transition to zero-emission future.

We expect that 35% to 40% of the 2025 production will be higher priced and higher margin zero-emission buses more than tripling our 2020 levels, with the largest zero-emission bus capacity in North America and the UK, with growing presence in Europe and Asia Pacific. NFI Forward will create volume leverage as we deliver higher revenue on a lower and more flexible fixed cost base.

This is evidenced by our 2025 targets including an expected revenue CAGR of more than 8%, but an adjusted EBITDA CAGR of more than 16%. We have one of the largest aftermarket bus and coach parts business in the world supporting over 105,000 of our own vehicles in service and others and delivering a recurrent revenue part stream.

We're pleased with our performance and we're confident in our business recovery and our market outlook. I'll now turn it back to Stephen to summarize today's discussion.

Following that, we'll open the call up for analyst questions. Thank you.

Thanks, Paul. Turning now to Slide 16 for a quick recap.

We had a solid second quarter performance in a very challenging environment. Although the market is on the path to recovery, there are ongoing challenges from the pandemic primarily related to the supply chain.

We continue to see unprecedented government support for transit, which will help drive order activity and growth. North American public transit bid activity is at pre-COVID-19 levels and we expect to see production volumes back to normal in the back half of 2022.

We continue to innovate and disrupt ourselves and the market. We've had numerous new product launches this quarter and we also announced entry into new EV markets in Australia and Ireland.

We reaffirm our full-year 2021 guidance despite a challenging global environment. We are focused on achieving our ESG goals through initiatives aimed at reducing our internal footprint while creating equitable access to mobility and workforce development.

We are leading this evolution to a zero-emission future with strong 2025 targets that would see us drive top line growth and even better margin performance. We'll now open the line for analyst questions.

Henry, please provide instructions to our callers.

Hi, good morning, everyone. So, my first question is regarding the manufacturing segment.

If I read this correctly, there's a little bit of pressure on the margin side. I'm just wondering, does that has to do with the product mix?

Or is there supply chain pressures? If you could just provide some color on that trend?

Okay. So, let me just make sure I understand.

One of the things that you're asking is from a manufacturing segment side of things, you're seeing some margin pressure and from that perspective, you're asking about what's kind of causing that margin pressure?

That is correct, yes.

Okay. So let me just kind of start out and then maybe we can kind of go from there.

So, I think one of the things that we're starting to see more of from my perspective is we're starting to see a couple of things. So, number one is we're starting to see more EVs and with that EV mix dynamic, what's happening is we're getting a little bit more top line revenue, but when we talk about margin percentage pressure, we are getting a little bit less on the margin percentage side.

That's the way I can kind of -- and just to be clear, though, as we get more zero-emission vehicles, the EBITDA margin for zero-emission buses is actually at this point, better than we're seeing for conventional propulsion. The problem is that the sale price of the EV is materially higher and therefore by simple math, the margin percent is slightly deteriorated.

We're not viewing that as a fundamental dynamic yet in terms of our competitiveness on zero-emission. In fact, we're in a really good position there.

But just the simple more top line or the higher sale price has a quite a significant impact on a margin percent calc.

And Nauman, just one quick thing, too. There was some mix for sure in the second quarter.

So, we sold more motorcoaches and more vehicles in UK and Asia than American transit. And some of that, yes, it's related to just market dynamics and market recovery and a little bit of the issue, too, from the supply chain on some of the idling of facilities, and days, and stuff like that.

So, there was a little bit of mix issue as well in the quarter.

Okay, perfect. That's great color.

And just a second one. It's more about maybe Paul can answer, there's a good slide on NFI view on market recovery.

I'm just wondering, there's a solid bid universe there. What really has to happen in the North American market for that to sort of translate into backlog?

Is that the infrastructure bill? Or is there like something that needs to happen where it actually gets translated?

Or this is just like a normal cycle where it will take a few quarters to translate into backlog?

Well, it's a really good question. As we spend every day, watching the news and living in Washington, and watching what's going on in terms of the infrastructure bill, the replacement for the FAST Act and all those other things.

So, there's kind of a micro and a macro dynamic. First of all, the transit agencies that through kind of 18, 19 and 20 that were trying, pilot projects on zero-emission buses are starting to get their heads around the way they want to go, the charging strategy, the size of the fleet, the pace of adaption, smaller vehicles versus 30 or 45-footers, versus artics [ph], and even now double-decks and so forth.

So, there's a micro dynamic of them getting confident in the way they want to proceed on a zero-mission and having learned a little bit around the requirements from infrastructure. At the macro level, there is no question that the Biden administration's strategy and policies and plans around dealing with congestion in cities, dealing with the zero-emission dynamic and funding the infrastructure has a really massive impact on future demand, but stability of demand.

And so, there's a lot of people that are spending an insurmountable [ph] amount of time right now trying to understand the timing of that. And the thing that often we try to get across to investors, and analysts, and stakeholders is even with an announcement -- today, for example on the U.S.

government, the Canadian government, it can be 18 to 24 months before that really solidly trends into actual build and delivery activity. So, the good news is you've got the general market recovery and economic recovery, you've got confidence from an operator and kind of starting to get their heads around the way they want to move to zero-emission, the type of vehicles, the rushers [ph], and then you have the macro tailwinds of some pretty serious funding like we have ever seen before.

So, this is why I think between my comments and Stephen's comments this morning, we kind of continue to see, a little bit of noise through 2021, a little bit more solid order and backlog development through 2022, and then what we think with [ph] recovery was the previous replacement factors, if not, a little bit higher in 2023 and beyond.

This is very helpful. And maybe the last one before I head back into the line.

You've entered the Australian market with a partnership. I'm just wondering if you could provide some color on the economics of such partnerships?

You did one on New Zealand and Ireland. If some big picture on that.

Yes, great point. So, Australia, a little bit of history.

When we were just New Flyer and Alexander Dennis was on its own and Marco Polo before they had made an investment in New Flyer, there was a company that came for sale in Australia, the market leader. All three of us bid on acquiring that business.

Marco Polo was the successful player, Alexander Dennis then bought another player in Australia, a smaller business and it really wasn't a success. So, they backed out of that market.

But what they did learn was how the market operates, the provincial dynamics, or state dynamics in Australia, the local buy requirements and so forth. What this allows us to do, this partnership with an export allows was to actually build chassis body kits and work with that local partner to do final assembly of our buses on a BYD chassis in Australia, for the Australian market.

And so it's not a new market to us in terms of understanding the market dynamics, but it's a re-entry into a market with a proven kind of strategy, the same thing we do for example in New Zealand, work with a local build partner to build it for the local market. So, it's not a home run, but it's another really solid, we think, interesting market for us to try and diversify from our current, cost-base and diversifying our revenue base.

Okay. Thanks for the color and that's it for me.

Thank you. Thanks.

Thank you.

Thanks, Nauman.

Thanks for taking my question. Paul, I assume [ph] you talked about the bidding activity being elevated here, funding environments good.

I'd be just interested if you see any changes in how transit agencies are looking at I guess replacing the fleet or building back their fleet post-pandemic. Are you seeing considerations around how many people they want to put in a box, how they're looking at capacity utilization, and the type of buses they may want to order moving forward?

And maybe how you view that potential demand profile versus maybe what a transit agency would have typically ordered pre-pandemic?

Let me start off at kind of a simple statement, Kevin, and then give you a little bit of color. I don't think we're seeing anything different than how they think about the future of operating their fleet and the mixed profile of the size of the vehicles.

All of them have strategies for on route service, their various routes structures, their pace, or cadence of buses, every X per hour and so forth. They all have their own current facility strategy.

Some of them are fairly advanced on adapting their facilities for other larger vehicles, or to adapt the charging strategies and so forth. When COVID started, we saw clearly in some cities, the bus go to Sunday or holiday service.

So, the frequency changed dramatically, the route structures really didn't change. Then as we saw them starting to come back, we in some cases saw as many buses on the road, but limiting the number of people on the bus.

And so again, every city, every area was different depending on how many people were riding, how many first responders, or how many essential workers had to get onto those vehicles. But as they now start to get back into load factor starting to increase, ridership going up.

The strategy is more around the evolution of the propulsion and their choice of either depot charging only or on route charging select batteries, but charging more frequency, or in some cases, really starting to seriously look at fuel cell-electric vehicles that give them a range benefit. I'm not so sure it's changing the quantum or the type of bus that they want to buy other than the real focus on the propulsion system.

What is changing though, is the pace now of maybe their fleet renewal. So, let's say since 2018 to now, not only the first part of 18, 19, into 20 was around what kind of zero-emission do I want and what's my strategy?

And then, from then on here has now been kind of survival and adaptation. They're starting to get their heads around what they really think they want.

So, when you sit back and think if you and I were running a transit agency and the average city [ph] in the U.S., the comfort today that the federal government is dead-serious about A, public transit; B, about transit in every city available to allow congestion reduction; and C, a commitment to environmental responsibility and therefore zero emission. It's actually really encouraging.

And so, if we sat here with Chris and his team and went through the actual bids on the street, like we've never had as many active bid opportunities that we have than we have today. In many cases, the quantum of buses per bid is less because they're getting into that recovery phase.

But the number of discrete opportunities is at record levels.

That's helpful. And I appreciate, I think Slide 13 here on your views on the market recovery.

I found that to be very helpful. Maybe if I look at it, your performance in the first half of 2021, a transition year, you delivered just under 2,000 new buses.

I know mix played a role, but that's actually not too far from the total you would deliver in the first half of like you said, pre-pandemic year. Obviously with much higher earnings attached to that.

So, it'd be interesting to see how you think about the recovering earnings with the recovery and volumes. Like, do you think by 2023, you're kind of back to pre-pandemic levels on your way to kind [indiscernible] of EBITDA by 2025?

Like, that would be interesting to think as volumes recover, what are some of the marks we should be thinking about in terms of in terms of EBITDA as well?

That's a really good question. In fact, I'll take you to Slide 15, Kevin, if you don't mind, just to give you our look at it.

So, previously we have given this slide. This case, we actually went back and showed you 2019.

And 2019, we only had half of Alexander Dennis in our business. And basically, when you look from 2019 to 2020 and then you look at the start of the trajectory of recovery, we've basically lost two and-a-half to three years of our lives, if you will, in terms of getting back to pre-pandemic EBITDA performance.

And so some of it will have a mixed dynamic, some of it will have the full year benefit of ADL coming in and some of it will have the reduction or costs and therefore, the improvements in our performance. So, we kind of think, help giving the details of individual periods past 2021.

We think that where you'll take our 2019 numbers and kind of insert them somewhere in 2023 and so forth, then you'll see us with a very strong trajectory of returning back to what we predict to be $400 million to $450 million by 2025. And a reminder of what we talked about last quarter, we didn't just make up a number based on units.

We went back to the volume of each of our markets pre-pandemic, we took costs out of our business, we added the conversion to zero-emission, we added a little bit of growth based on some of the strategies that Alexander had and that got us to the $400 million to $450 million. So, we've kind of looked at that as a prudent, responsible, reasonable conservative approach to where we can get to.

The tailwinds that we're seeing are really positive in terms of funding, but it's not tomorrow. It doesn't allow for a bus to be bought tomorrow.

The other dynamic that -- all you got to do is read the paper today or start to click on the internet. There is not a supplier in the world that doesn't have a manufacturer that has no supply chain challenges.

And so in addition to managing customer demand, and build slots, schedules, and all this stuff, the supply chain dynamics are really causing our inability to really try and speed up. So, you were in a pretty good place today, we're relatively stable, we've got continue to change our master production schedule they are under [ph] every week.

That's really why we articulated this year as a transition year. Nobody should expect our business to bounce back.

But we've given guidance for 2021. As we get close to or past the New Year, we'll give 2022 guidance.

And we think it's about a two, two and-a-half year downgrade, if you will, relative to where we were in 2019. But we're well on our path back.

Now, the one thing -- and again, Paul, just to make sure -- Kevin, I'm understanding you, I think you were looking at 2019 and you were not factoring a full-year of ADL. Correct?

Yes, exactly. You've been taking the 2020 pre-pandemic guidance that you have issued, I guess, on early 2020.

But yes, I guess the earnings frame work is roughly the same.

Yes. I'm sorry, Kevin, pro-forma 2019, we would have did about 6,100 units for a full year ADL.

That's helpful. I may just last one for me here.

I know you do operate in a pretty stringent local content requirement environment. But there's also a lot of headlines about the Biden administration's push to move the overall Buy American [ph] percentage to 75%, I believe it is.

And I know you already operate in the 70% rule. But are you hearing anything of an increase in your local content requirements in the U.S.

and is there anything you think you'd have to do to hit that, if that is coming down the pipeline?

Just a point of clarification, Kevin, there are two different things -- Buy America is the provisions inside the FTA for the purchase of rolling stock. That's the world we live in.

And it went from 60%, to 65%, to 70%, as you just summarize. Buy American is for construction contracts in the United States that has nothing to do with the purchase of buses.

We have heard nothing in any of our investigations or lobbying efforts to increase in our world past the 70%. So, that's the first issue.

The second issue is the local procurement requirements. There is some lobbying by various organizations, United States to try and get local content dynamics and we have seen none of that yet make its way into, again, the purchasing of rolling stock.

So, we have in the past set up local completion centers or local service centers and pick one, Ontario, California, or in Washington, or a fabrication facility in New York to try and assist with local content. But at this point, we don't expect to have to change our footprint to accommodate any of that as far as we can tell.

That's it for me. Thank you for taking my questions.

Thanks, Kevin.

Thanks, Kev.

Thanks very much. Good morning.

Hey, Cam.

So, just question on supply chain. I think we're all familiar with what's going on the chip shortages and things like that.

I guess maybe two questions here. One is what gives you some confidence that we're going to start to see some normalization in that by the end of the year?

And I also wonder if you could talk a little bit about cost inflation, anything specifically there that you're seeing that's affecting you on the cost side?

Great, great questions. So, just put in context for all of our listeners, the product that we build is not a standard vehicle.

Sure, there are certain parts that are the same on every vehicle, but every single one of them is customized and we're buying quantum of parts to put on a vehicle based on a certain batch quantity of each customer. So, we're in daily communication with every single individual supplier based on each of those batches.

We don't buy microprocessors or chips directly. We buy parts that have them embedded in and so yes, we've had situations where we'll get forced mature [ph] letters, or we'll get customer, supplier notifications of delays and all these other things.

But our quantum of what we buy is nowhere near what automotive guys would buy and so forth. In terms of confidence for the rest of the year, we're working based on our suppliers' ability to supply to Washington.

So, in that daily dialogue around, 'Do you have 15 of those or 50 of these that we have an order? Are we going to get them?'

This is part of the daily gymnastics that we go through of adjusting massive [ph] production schedules to meet production output. In many cases, we'll make judgment calls about delaying the line entry of a certain order based on concerns about supply chain and we'll make game-time decisions about known line entry weeks to clean up [ph] to adjust production schedules, which is why you are seeing us dramatically recover volumes in 2021.

In terms of commodity price increases, most of what we're building today was price and cost a year ago or a year and a half ago. And yes, there are some commodities that we buy that, steel, for example, I think it's 15,000 [ph] a bus is raw steel.

And so, we see shorter-term cost increases. Almost all of our contracts or the vast majority of them have -- at least on the new flex [ph] side have a purchase price index elements to those contracts.

So, that go-forward builds we're able to adjust the price based on the cost inflation. There are some risk in those numbers.

There's also some opportunities in numbers where we can kind of beat the inflation number. So, given the size of our quantities, or our batches, individual builds, our escalation of costs is managed at the micro-level contract-by-contract to try and understand the impact on our business.

And so, we think -- there's no question, there's inflation on pretty well everything that we're buying, we think we can manage for the most part of that inflation inside our sale price adjustments as we go forward. And of course, everything we're bidding today reflects the current costs and the current price from our supplier in those proposals.

So, it's not like it's a massive issue for us. But it is no question, something we spend an enormous amount of time trying to manage so that we can maintain our margins.

Okay, that's very helpful. I guess second question for me just on the aftermarket.

You've had a few quarters in a row here where revenue has been very strong, margin strong. But wondering if there's maybe -- you sort of mentioned some retrofit offer to your activity in Asia and other things.

I'm just wondering the sort of the sustainability of the current revenue run rate and margin run rate in the aftermarket. Is this kind of a new baseline for you?

It's a really good question, Cam. I'm not trying to be elusive on this one, but it's kind of hard to tell.

In Asia, there is no question. We have a big contract in Hong Kong and some others where there's a retrofit that's almost like what we would see historically.

North America where we have a refurb type program, it's a quantity of vehicles we're managing with the customer, a complete retrofit. So, I'm not sure if that side of the Asia market is sustainable, but it's a really good contributor through this period of COVID.

In North America, private motorcoach and public transit, I think what we're starting to see is as any of those operators have idled their fleets through COVID, as they're starting to get back moving, there's kind of catch-up mode to some extent in terms of getting their vehicles ready. Some of it replacement parts, some of it let's call it 'tuna parts' or whatever, to get the vehicles back into daily operating service.

Whether it's sustainable or not, it's tied a little bit to the pace at which they recover or replace their fleets, which as we just said, isn't an overnight issue. It's a two or three-year trend.

So, as far as we can tell for the next couple of quarters, we've got fairly positive outlook on the aftermarket volume and margin in North America and in the UK for that matter as the vehicles get back on the road.

Okay, that makes sense. Appreciate the time.

Thanks, Cam.

Yes. Thanks, guys.

Good morning.

Hey, Chris.

Not to beat this one to death, but just thinking about the supply chain issues and I guess a couple pieces of this and maybe even looking out for the rest of the year. So, I guess I'm trying to understand what kind of risk we should be thinking about you guys actually hitting your guidance numbers and the type of confidence you have about making the deliveries you've got.

We've had some issues before where going to get into Q4 and stuff has to push out of the year just for some timing issues. And the second piece of this is really how much of this is about external supply versus internal issues, say with the Kentucky Manufacturing Group.

So, any sort of color you can give us on your confidence level that these are actually going to be transitory and we shouldn't be too worried about you guys hitting your numbers.

Really good questions, Chris. Let's take them in reverse.

KMG, we dropped the ball in late 2018 and into 2019, which caused us a bunch of problems. We told everybody about us rethinking how to manage the facility, we changed the leadership team, we added a bunch of resources, get caught up and KMG has been profitable now even with this volume for about a year and-a-half.

KMG is not our problem anymore. They've been a really, really solid internal supplier and quite honestly, as you've seen some from our NFI Forward documentation, we continue to insource more strategic parts into that building or that facility.

So, we're not worried about KMG. The external supply is real, and it's every day, and it changes every day, and every product in every individual corner has different implications.

And so we're doing our best to manage that. Again, as I said a minute ago, if you sat every week in Chris' Stoddart's production team meeting, they're making calls about the current cadence of what's on the line, but also the pace at which they'll deploy or line-enter new product based on their gut feel of how good the supply chain is going to be.

There is also some areas where our customers told us to hold slots for them. They haven't been able to get all the paperwork in the contract in place.

And so, we're adjusting what we're line-entering based on customer demand dynamics as well. In terms of our external confidence in our supply chain, David White and his team will tell you it's absolute hell today, but it's not that we're not managing our way through it.

There are no question problems. And in some cases, we're spending crazy amounts of money to airfreight to part in to meet the production line and that's part of some of the cost pressure, or we're building things online and we'll make the conscious decision not to install a widget on and sell to but we'll do it and sell for which has retrofit dynamics, or inefficiency dynamics, or expedite dynamics and so forth.

But now what would you say, Paul, from a guidance perspective? And I think what we would say right now just based on some of the discussions we have at our monthly meetings is we have confidence in the $220 million to $240 million today -- exactly.

But it's a very dynamic situation.

So Chris, the fourth quarter is no question our strongest quarter expected this year. We don't have this year the real dynamic where we traditionally sell a whole bunch of MCI motorcoaches in December, for U.S.

customers to accept vehicles to take advantage of accelerated tax. And so, it's largely a transit bus delivery dynamic as well as an Alexander Dennis dynamic.

We just reaffirmed our confidence of the $220 million to $240 million, knowing that fourth quarter is going to be our strongest quarter of the year. So, at this point, we're feeling we can continue to deliver.

The other dynamic which is a little bit odd in this situation, if we under-deliver on certain volumes, we get an opportunity to potentially get a little bit more wage subsidy that helps us retain some of these skills. So, it's a bit of a circular discussion.

As of today, we stand behind our $220 million to $240 million for this year.

Okay, that's helpful. And then, maybe just even to follow on a little bit on Cam's question about the aftermarket.

You guys' margins, that's the first time I've seen a percentage margin with a two in front of it in a few years. The question is also -- part of that was also about the integration of all the different platforms.

And so, I'm just trying to understand, kind of like, yes, you've got some timing things in there, but how much of that is, call it the NFI Forward plan, or just kind of cleaning up and integrating on a common platform that you think is in that margin that might be a longer-term structural?

There is no question, as I said to Cam, there's definitely some campaign stuff and if it's not in Hong Kong, [indiscernible] customer in North America that's working on a retrofit campaign about driver barriers, or upgrading certain things in the vehicles. Your point on NFI Forward, it wasn't just about manufacturing facility, rationalization, or optimization.

We made a conscious decision to reduce the number of stocking locations and I think it's gone from 22, to 9, or 10 in North America. In addition, we took Alexander Dennis' North American parts business and ARBOC's part business and put into NFI parts.

So, what Brian Dewsnup has been able to do is to kind of reduce and strengthen the quality of the distribution machine and put more parts through that. The recovery of the markets has definitely helped the drop through.

But, Chris, as overhead as a percentage of sales is a couple of points down to what it was a few years ago, which reflects exactly that 'let's get really efficient at distributing aftermarket parts'. The other thing that's actually kicking in and we've been talking about this for a long time, more than any of other competitors, what Brian Dewsnup's team has done identifying parts is trying to actually change or expand the way we sell parts.

So, there's no question we get a phone call, 'The windshield or wiper? Sure, we'll sell them to you today.'

But the ability to put programs in place with customers, min-max level that consigned inventories, vendor-managed inventory programs, or even now we're flirting with some of these parts per mile type contracts on scheduled maintenance parts are really starting to help the performance of the business because it's now about planning parts delivery as opposed to guessing, and quoting, and hoping we're winning. So, I think some of that stuff is no question, sustainable in that business.

The movement to zero-emission on parts is going to have a long term effect because you'll have less parts being replaced. But that isn't today, that's years to come and we're planning for that as we speak.

Okay, that's my questions for today. Thanks, guys.

Thanks, Chris.

Thanks, Chris.

Good morning.

Hi, Maggie.

Good morning.

Following up on the conversation around outlook guidance, etcetera, but leaving most of the commentary as is, I'm just curious how we should be thinking about working progress in inventory, cadence for the balance of the year. You've got some initiatives to reduce some working capital days and you've also got, I guess I'd call it a bit of an unpredictable or lumpy supply chain.

So, should we be thinking about the potential for increased work in progress for Q3, falling in Q4, as you enter into that strong quarter? Or is it just kind of following historical pattern?

Yes. Maybe I'll just start out and then I'm sure Paul and Stephen could jump in.

So, maybe I'll just talk a little bit about cash flow and the jump into the working capital as well. So, at a very high level, if we start thinking about -- Maggie, if we start thinking about what we expect to spend on capital this year, we're kind of still looking at that $50 million range, the guidance that we provided.

There's a couple of things here from the inventory side that I'll kind of mention here. So number one is, our goal at the end of the day is to get back to the normal working capital days, which should be in the low 50s over time and I think we're kind of at that 60 range right now.

So, we're kind of dealing with some of that. There's a couple of things here, inventory levels for us.

We do expect those to be heightened on the private coach and some of the supply chain issues from our perspective. But I guess some of these supply chain issues will kind of give us a little bit of a raise, but we're still trying to get into that sub-60 obviously before the year end is up.

And we kind of think about that from a 13-point working capital average, which as you know, that's the internal metric we use, which is a very difficult metric to achieve from a target perspective.

Maggie, we've made really good progress on reducing some of the working capital. When we started the year as you know, everybody knows, we were worried about the asset fixed, the finished goods sitting in our motorcoach pool.

The private sales team in North America as well as the Alexander Dennis sales team in the UK have been able to actually really move some of those finished private motorcoaches. So, that's been a positive contributor.

It's not like we warehouse spare parts to build buses. We buy parts to put onto a specific bus.

And so, it's not really around a part, this is more around the pace and cadence of delivery of products through the factory. And so, given some of the supply chain dynamics, we have seen definitely noise that our ability to finish and deliver a vehicle.

But we kind of think we're in the worst of it right now. And as we head through the end of this year and into the first quarter and first half of next year, that we'll see even better performance on our working capital.

And the only thing I think I'd add there is probably on the back half of this year, probably a bit of a working capital investment. I don't know if it's something to $20 million to $30 million for the back half of 2021 because all the factors the guys talked about, if it's inventory levels, more sales of zero-emission buses, some of the supply chain challenges, but overall for the year, I think it's a positive working capital benefit, but a little bit of an investment in the back half of 2021.

Great, thanks. And then just in terms of how we should monitor the situation given we don't have the level of detail that you guys have, should we be thinking about the clearing up of the chip shortage, and the chassis shortage, and being kind of major markers or an indicator around your supply chain issues abating?

Or is it a bit too nuanced to be able to look at a couple of larger parts, markets and determine how things are going?

Well, it's a great question. I wish we had the fidelity to understand how the chip shortages affects the sub-suppliers and then our suppliers and then us.

So, we're not really deep inside that world. We know from a supplier where they can deliver to schedule and to the quantity that we need.

There's no question that global dynamic has. As it gets healthier, there's no question that will help us.

The second issue is the whole freight and logistics dynamics, the whole Suez Canal dynamic, the pushing back of the global movement of freight and so forth, parts -- not that we buy a light offshore, but parts being stuck in containers and different things has had an issue on our business. And so, as that kind of clears itself as a macro indicator, there's no question that will only help our individual business.

I don't know if that helps you. The chassis shortage is directly a result in two issues -- one in North America, ARBOC buys chassis and in some cases, the chassis are basically given to us by our dealer who then we build a body on it and sell it back to them.

In that, it's directly a chassis or a chip supply issue to the Fords and the GMs and so forth that supply those chassis. The other dynamic is Alexander Dennis in the UK, bodies BYD chassis.

And so the ability for BYD to build a chassis, batteries, frame, structure, microprocessors where they're required and then ship that from China to the UK or from Europe to UK are some of the challenges associated with that supply. There's no question, we hope and expect to see that start to clear up throughout the rest of the year and into next year, which then it goes back to the market demand increasing in our business and the reliability and stability of our own supply chain, which is why we continue to say 2021 is a kind of a transition for us.

Had we not had the supply chain dynamics, we'd be probably in a different place in terms of being far more sure or confident of the ramp up of our business. And then as I said before, we still have issues where customers are -- the pandemic had a massive issue impact on a transit agency.

And so, the ability to plan their fleet replacement, the ability to make sure that they have funding, the uncertainty and yet positive news of the federal government funding are all tailwinds that will help us. But if you walked into the middle of a transit agency today, there are still lots of pressures and dynamics around deployment, recovery of their fleets, strategy around deployment of zero-emission, charging things and so forth.

So, a little bit of Helter Skelter to some extent.

Thanks a lot. I really appreciate your responses.

Just one final thing for me. I noticed that your infrastructure solution division is starting to sort of pick up some steam.

But I think [ph] it's pretty small, but I'm really curious how that offering plays into your conversations around [indiscernible] transition as you as you discuss planning with these transit agencies around replacement of fleet etcetera? And if you've noticed any pattern standing out whereby that has actually given you a bit of an advantage versus maybe some of your competitors on that market?

Well, I think it's an important observation because the first number of deployments a couple of years ago, we were very frustrated trying to build a bus, delivering the bus to a customer and then the infrastructure side of it, or the charging side of it not being ready, or appropriate, or easily to operate. And so, we got into that business, maybe half good luck and half the foresight of trying to think about how to provide more of a solution than just the vehicle.

It has grown year-over-year and continues to grow. We're currently -- I think in one of our slides we had a stat in there about 44 individual initiatives that we're bidding on, where we're selling a vehicle and trying to tag the infrastructure side of it with.

I think Chris Houghton [ph] will give me a stat that says kind of for every 10 buses contracts, maybe six times or so, we'll actually sell the infrastructure associated with it. So that's an important part of our business, not only from a customer SAP and a customer confidence and deployment perspective, but also it's now to some extent a profit opportunity for us.

The growth of the business is something where we're spending a lot more time on. All you got to do is check the news or go on the internet and everybody's talking about mobility as a service or charging as a service and where the energy going to come from and whether they'll bundle the buses with and so forth.

That's an area we're spending a lot of time on trying to understand where we migrate from just a vehicle provider to a solution provider and how deep do we get into that. It's been a really good business.

I have to tell you as well, putting the chargers in and then providing the customer support in terms of troubleshooting their fleet, but also the chargers has allowed us to learn an awful lot about how to make more reliable, more robust buses going forward. It's going to be an area that we're going to continue to focus.

Every one of our competitors talks about it, but I think we've got a real leg up where we've actually had many, many situations of deployments and lots of lessons learned whether it's depot-level charging, or on route charging.

Thanks, again. Have a great morning, guys.

Thanks, Maggie.

Hey, good morning, guys.

Hey, Mark.

Good morning. Maybe just a follow-up on supply chain issues.

I guess consider to follow-up on Maggie's question. I guess just thinking about the cadence of recovery, you mentioned again, maybe you're ordering in much smaller batches in some the auto EVs [ph]?

In your opinion, is that like a good or bad thing? I'm just trying to think, do you sort of lead or lag of the recovery [indiscernible]?

I'm just trying to figure out how to handicap the cadence of the recovery.

Yes, it's a really good question that I wish I had the answer for you. Some days, we think, 'Hey, we only need 50 of these widgets.'

And so surely, they can find a way to get 50 and get us our parts. Then we hear about fields of 150,000 F150 somewhere waiting for a certain number of parts or components to build the bus, or to build the truck or finish the truck and deliver it.

So, I'm not sure we really know the answer to that. In many situations as you know, Mark, we don't get to choose our supplier.

Many of them are specked [ph] by our customers. So, we're kind of at the at the will, if you will, of our suppliers' ability to source that stuff.

I think at net, the smaller quantities that we need are probably allowing us to be a little bit more flexible in getting things here or there. So, the chip shortage is one of it, but we can't underestimate there are also a number of suppliers.

Like we had one supplier and I can't remember, doors or windows or some darn thing where they had a COVID breakout. The place was shut down for two weeks.

Well wait a minute, we're waiting for windows, or buses, or doors to build the bus. What are we going to do?

That stuff is still real and who knows if we'll have a real fourth wave of COVID. But in some of the parts of U.S.

for example, we've seen suppliers have real challenges to get us the parts and it has nothing to do with microprocessors or chips. So, it's a really uncertain time right now, both the combination of COVID and the supply chain dynamics and the chip supply.

I think net [ph] are smaller vast quantities gives us that ability to be a little bit more nimble. And quite honestly, Chris is really trying to be prudent about what he puts online based on what he knows is scheduled or is coming in in the competence of supply chain.

You will remember in 2019, our whip ballooned, because KMG couldn't deliver parts and we kept hoping, and managing, and trying to get those parts that we built up disproportionate whip. Chris is not doing that right now.

We're adjusting the input based on what we have known or have high competence in supply chain. And I'd rather take a little bit short-term pain or short-term muted revenue to make sure that we don't balloon our whip, or we don't spend disproportionate cost trying to resolve those problems until that whole thing kind of works its way over the next year or two.

But I think one of the things -- Paul, and you probably add -- real quick, Mark -- we are trying to help with the supply chain issues and kind of balancing that out. There's a lot of inventory coming out in that latter half of the year, especially on the MCI side of things.

So, I think we'll probably see a little bit of balancing out of that with that, and with ADL. So, to kind of help us there.

Sure. So, I'm thinking about the 2021 guide.

How much of that, I guess at this point would be sort of pre-sold and what the real risk is, again, maybe you come at the low-end or don't hit the number for the year. But it's really just an issue where it gets pushed in 2022.

And if that's the case, is there any penalties for late deliveries with the transit authorities, or the other customers? Are they sort of working with you through the supply chain issues as well?

95% of what we need to build in the back half of the year is effectively contracted work. There's a few slots we still have that we've either got to secure it for this year, or push it out into next year.

But we have had and we manage individual contract signings and timings, and so forth. Our issue for the back half of the year is more around the timing of what we put online and the confidence in the supply chain as opposed to lost work to somebody else.

So, if Chris delays the deployment of a certain product online in 2021, it's because he doesn't have confidence that he get the paperwork in-time from the customer or that he can get the supply chain to do it efficiently. But it's not really lost work at this far into the year.

And I think from your point also, I think there's penalty-wise that's immature.

Yes, we do have every contract, has some element of liquidated damages. In many cases, the vast majority of the cases, we're able to manage that with a customer by promptly advising and working on delivery windows and schedules and in some cases, a few concessions here or there.

We do have LDs, liquidated damages at times, but it's not a material number in any way, shape or form.

Great. And if I could ask just one more question, I guess longer term.

Well, you mentioned that as transition sorry at the aftermarket opportunity become smaller. But as your infrastructure solution business grows and your install fleet to charging and all that grows, does that become a potential offset?

Or is it as an aftermarket opportunity down the road as well? Thanks for your time, guys.

That's a super insight and I think that comes directly for what we talked at our investor day part of this year. Those revenue streams that we're starting to get or starting to look at that we never had historically.

And in the parts business, not just the transactional sales, but all the things Brian's team has done in terms of vendor managed inventories and now potentially parts per mile [ph] contracts and those kinds of things are going to give us revenue streams that will displace some of that transactional parts' nature. The infrastructure solutions is again a revenue stream we never had before that now allows us not only the sourcing of it, potentially to do some servicing, or monitoring, or managing of it.

In fact, most of Chris Stoddart's field service team today are actually not just helping with the deployment of the infrastructure, but actually troubleshooting and servicing on behalf of the customer. Our trick is going to be to figure out how to convert that from a customer support dynamic into a go-forward revenue stream.

But that's exactly what we're trying to do, which is why when people say to us, 'Your parts business is going to go' and we say well to some extent that's true over time. There's less moving parts in a zero-emission vehicle.

I will caution to say the vast majority of the propulsion parts today, we don't sell. Allison has their own distribution network.

Cummins has their own distribution network. We don't sell a lot of that stuff, we sell some.

So, we're going to lose a little bit there, we're going to lose a little bit of break revenue, for example because they're really efficient use of zero-emission vehicle. You don't use the brakes as much.

But there are other revenue streams that we've got today and that we're pursuing that we think can supplant that for the longer term outlook.

Thanks for the time, guys.

Thanks, Mark.

Good morning.

Hey, Jonathan.

I noticed the finished goods inventory on the balance sheet was down at the end of Q2 from Q1. Has there been any change in the private coaches in inventory?

And how confident are you that the private markets will start improving toward that 50% of pre-COVID levels by Q4?

Great observation, Jonathan. You'll remember at the beginning of the year, one of our biggest concerns as we finished through last year, as we idled the production line of both the private motorcoach in North America and the private motorcoach in the UK through the Plaxton brand.

And our concern was we would have too many finished goods of new buses or new coaches and used coaches. The fail of the entire pool of the used coaches has proved to be extremely important and very, very strategic.

And because today, we're starting to see a little uptake in the purchasing in the U.S. of motorcoaches, I'll admit earlier than we thought they would be.

And so, Chris' team has done a really good job of burning down some of that excess finished goods as has the team in the UK to the point where we're actually now really trying to put on the calendar when we'll restart our production lines for commercial coaches in North America. We're looking at the end of the year as probably the point where we'll be able to do that.

At any one point in time, we'll probably have plus or minus 50 new private motorcoaches on the shelf and it will depend on the timing of the year when we sell them. Chris is actually projecting now to have that -- he's got that down quite materially from what we had originally and by the end of the year, we may be down to as little as 25 new motorcoaches on the shelf.

And that's exactly what's burning down the finished goods inventory.

Thanks. And there's been quite a few questions on the revenue guidance.

I'd just like to follow-up to make sure I'm not missing anything. If Q3 is lower than last year, then to achieve the low end of the range, my math suggests Q4 revenue would have to be well-above 2019 Q4 even after adjusting for the for 14 weeks that we'll have this year.

Does that make sense if say, coach production is still down?

Well, we're still selling finished goods, so that will contribute even though the production is down. There's a volume dynamic and there's a mix dynamic and as you know, every time we sell a zero-emission vehicle, whether it's battery or fuel cell-electric, it has one and-a-half times the revenue of a conventional vehicle.

And I think, Jonathan, the only thing I'd add there, when we're talking about being down year-over-year, we're mostly looking at the EBITDA margin on the revenue side. It may be kind of up year-over-year on the top line.

Yes and I think we're going to be getting a lot more ADL as well. So, I think there's some dynamics there that we've got to push, especially for the end of the year, which, obviously is a little bit of that dynamic with the supply chain and right now we feel confident we'll get it.

But obviously, we're monitoring that daily.

Okay. And last question for me.

I thought the latest news from the U.S. federal government over the weekend was fairly encouraging with respect to the long term outlook for funding.

At least based on what's on paper today, the $100 billion plus that's listed on Slide 12 of your presentation. Do you believe that would provide for transit volumes to recover to the 6,000 unit range?

And for the higher prices of zero-emission buses?

Yes. I think we totally think so.

I think one of the best things about the government funding that's coming through is its multi-year funding. So, similar to the FACT Act five-year funding program, which gives a lot of confidence to the transit agencies about their outlook of what's coming and what they can procure and that the funding is going to be available.

And I think from what we saw in both the Bipartisan Infrastructure act and in the INVEST in America Act, so the one that's in the House and then the ones that are in the Senate, they're both over five times more funding for zero-emission buses and additional funding for more low no-grants and additional funding for more infrastructure. So, across the board, there's definitely been would say a lot more focused from government on the higher cost of a zero-emission bus versus a traditional propulsion bus.

And that's in the U.S., UK and Canada, too, where we've seen some major announcements from the Canada infrastructure bank, $400 million in Ottawa, $450 million and Brampton. Again, all reflecting that they fully expect they are going to have to pay more for zero-emission bus versus our traditional propulsion bus.

So, I think our view, is yes, definitely that the funding as proposed would support getting the market back to those pre-pandemic levels.

Thanks for your comments.

Thanks, Jonathan.

Okay. Henry, are there any other questions?

Okay. Well, I think we'll wrap it up.

So, thanks, everyone, for joining us today. Thanks, Pipasu and Paul, as well and thanks to all the analysts for your questions.

Just wanted to let our listeners know that we are launching a new website with a new investor section. It should be done within the next couple of weeks in August, and thank everyone for your time today.

All of the all the information discussed today can be found on the Investor section of our website. We will now terminate the call.

Have a great day.