New Flyer Announces Correction to 2006 Third Quarter Financial Statements


    -   New Flyer corrects financial statements due to error in reporting
        future income tax provision in the third quarter of 2006
    -   Error impacts reported net earnings (loss) but does not affect
        previously reported Cash Flow, Adjusted EBITDA, or Distributable Cash
    -   Annual financial statements for 2006 to be released as scheduled on
        March 27, 2007

    WINNIPEG, March 22 /CNW/ - New Flyer Industries Inc. ("NFI")
(TSX:NFI.UN), the leading manufacturer of heavy-duty transit buses in Canada
and the United States, today announced a correction of its financial results
and those of its subsidiary, New Flyer Holdings, Inc. ("New Flyer" or the
"Company") for the 13-week period ("2006 Q3") and the 39-week period ("2006
YTD") ended October 1, 2006. Full restated financial statements and
Management's Discussion and Analysis (the "MD&A") are available at the
Company's web site at: All amounts referred to in this press
release are in US dollars.
    In the course of determining the tax provision for the year ended
December 31, 2006, the Company has determined that a calculation error was
made in recording the future income tax provision in the Company's 2006 Third
Quarter financial statements. The Company has restated the 2006 Q3 and 2006
YTD Consolidated Statement of Operations and Retained Earnings by recording an
incremental charge to net earnings for future income taxes of $4.5 million for
both 2006 Q3 and 2006 YTD periods. This resulted in a restated net loss for
2006 Q3 of $0.9 million and restated net earnings for 2006 YTD of
$17.3 million. This adjustment to earnings results in a reduction in future
income tax assets and retained earnings reported on the Company's Consolidated
Balance Sheet of $4.5 million from amounts previously reported. This
adjustment had no affect on the cash flows, Adjusted EBITDA and Distributable
Cash previously reported by the Company.
    NFI's financial statements were also affected by the 2006 Q3 error in New
Flyer's financial statements. As a result of the reduced net earnings reported
by the Company, NFI's net earnings (loss) has been charged an incremental
$4.5 million for income (loss) from equity accounted investments both for 2006
Q3 and 2006 YTD in NFI's Statement of Operations and Retained Earnings. This
results in NFI reporting a loss of $0.8 million ($0.04 per share) for 2006 Q3
and earnings of $17.1 million ($0.85 per share) for 2006 YTD. The investment
in New Flyer Holdings, Inc. and retained earnings, as reported on the Balance
Sheet of NFI, has been reduced by $4.5 million as a result of restating
earnings as noted above. This adjustment had no affect on the previously
reported cash flows of NFI.
    New Flyer plans to release its 2006 annual financial statements as
scheduled on March 27, 2007.

    Non-GAAP Measures

    Adjusted EBITDA consists of earnings before interest, income taxes,
depreciation, amortization and other non-cash charges adjusted for IPO related
costs and certain other non-recurring charges as set out in the MD&A.
Management believes Adjusted EBITDA and Distributable Cash (as defined below)
are useful measures in evaluating the performance of the Company.
Specifically, management believes that Adjusted EBITDA is the appropriate
measure from which to make adjustments to determine "Distributable Cash"
(being Adjusted EBITDA decreased for maintenance capital expenditures,
principal payments on capital leases, interest on the Company's credit
facility and capital leases, interest on New Flyer Industries Canada ULC's
subordinated notes (not forming part of IDSs) and cash taxes). Adjusted EBITDA
and Distributable Cash are not earnings measures recognized under GAAP and do
not have standardized meanings as prescribed by GAAP. Therefore, Adjusted
EBITDA and Distributable Cash may not be comparable to similar measures
presented by other entities. Investors are cautioned that Adjusted EBITDA and
Distributable Cash should not be construed as an alternative to net income or
loss determined in accordance with GAAP as an indicator of New Flyer's
performance or to cash flows from operating, investing and financing
activities as measures of liquidity and cash flows.

    About New Flyer

    New Flyer is the leading manufacturer of heavy-duty transit buses in
Canada and the United States. The Company's three facilities - in Winnipeg,
MB, St. Cloud, MN and Crookston, MN - are all ISO 9001, ISO 14001 and OHSAS
18001 certified. With a skilled workforce of approximately 2,100 employees,
New Flyer is a technology leader in the heavy-duty transit market, offering
the broadest product line in the industry, including drive systems powered by
clean diesel, LNG, CNG and electric trolley, as well as energy-efficient
gasoline-electric and diesel-electric hybrid vehicles. All of New Flyer's
products are supported by an industry-leading, comprehensive parts and service
network. New Flyer's Income Deposit Securities are listed on the Toronto Stock
Exchange under the symbol NFI.UN.

    Forward-Looking Statements

    This press release may contain "forward-looking statements", which
reflect the expectations of management regarding New Flyer Industries Inc.'s
and the Company's future growth, results of operations, performance and
business prospects and opportunities. Forward-looking statements involve
significant risks and uncertainties, should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such performance or
results will be achieved. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
statements. These factors and other risks and uncertainties are discussed in
the Company's materials filed with the Canadian securities regulatory
authorities and are available on SEDAR at
    Although any forward-looking statements contained in this press release
are based upon what management believes to be reasonable assumptions,
investors cannot be assured that actual results will be consistent with these
forward-looking statements, and the differences may be material. These
forward-looking statements are made as of the date of this press release and
neither New Flyer Industries Inc. nor the Company assumes any obligation to
update or revise them to reflect new events or circumstances.

For further information:

For further information: Glenn Asham, Chief Financial Officer, Tel:
(204) 224-1251, E-mail:

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