New Flyer Announces Results for the Fourth Quarter and 2006 Fiscal Year


    -   2006 Q4 revenue and Adjusted EBITDA increased by 27.7% and 11.9%,
        respectively compared 2005 Q4
    -   Ramp-up of bus manufacturing operations and continued growth of
        aftermarket operations results in highest quarterly revenue and
        Adjusted EBITDA reported in the history of the Company.
    -   Fiscal 2006 Adjusted EBITDA of $59.4 million decreased by 19.0%
        compared to Fiscal 2005 primarily as a result of strike during first
        half of Fiscal 2006
    -   Fiscal 2006 aftermarket operations revenue and Adjusted EBITDA
        increase of 26.2% and 35.2%, respectively, compared to Fiscal 2005
    -   2006 Q4 Distributable Cash of C$18.7 million exceeds distributions by
        C$ 6.5 million
    -   Fiscal 2006 Distributable Cash of C$ 45.4 million results in
        shortfall of C$ 3.1 million compared to distributions declared.
    -   82.4% year-over-year increase in firm order activity compared to
        Fiscal 2005
    -   IDS distributions raised C$0.03 per annum effective the April 2007

    WINNIPEG, March 27 /CNW/ - New Flyer Industries Inc. (TSX:NFI.UN), the
leading manufacturer of heavy-duty transit buses in Canada and the United
States, today announced its results and those of its subsidiary, New Flyer
Holdings, Inc. ("New Flyer" or the "Company") for the 13-week period ("2006
Q4") and the 52-week period ended December 31, 2006 ("Fiscal 2006"). Full
financial statements and Management's Discussion and Analysis (the "MD&A") are
available at the Company's web site at:
    New Flyer Industries Inc. ("NFI") completed its initial public offering
("IPO") of income deposit securities ("IDS") and New Flyer completed the
associated acquisition of its operating business on August 19, 2005. In order
to provide investors with a meaningful assessment of its recent performance,
New Flyer also provided results for the comparable 52-week period ended
January 1, 2006 ("Fiscal 2005") consisting of the combined results of the
Company for the 19-weeks ended January 1, 2006 and the results for the     
33-weeks ended August 18, 2005 of its predecessor company, Transit Holdings,
Inc., as described in the MD&A. Note that all figures are in United States
dollars except amounts on a per share basis or unless stated otherwise.
    Both revenue and Adjusted EBITDA for 2006 Q4 were the highest reported
quarterly results in the Company's history. Consolidated revenue for the 2006
Q4 of $174.6 million increased by 27.7% compared to consolidated revenue for
the fourth quarter of 2005 ("2005 Q4") of $136.7 million. Bus manufacturing
operations revenue in 2006 Q4 of $157.9 million increased by 28.2% compared to
bus manufacturing operations revenue of $123.2 million in 2005 Q4. 2006 Q4
aftermarket operations revenue of $16.8 million increased by 23.6% compared to
$13.6 million in 2005 Q4. This growth in aftermarket operations revenue has
accelerated compared to growth in prior years as New Flyer buses continue to
represent a larger share of the active installed fleet in the combined United
States and Canadian market. In addition, the reduction of new bus purchases
experienced in the U.S. market in 2004, 2005 and in early 2006 has contributed
to higher demand in the aftermarket business as customers maintain older
    Consolidated Adjusted EBITDA for 2006 Q4 totaled $19.8 million, which
represents an increase of 11.9% compared to consolidated Adjusted EBITDA for
the same period of Fiscal 2005 of $17.7 million. 2006 Q4 bus manufacturing
operations Adjusted EBITDA of $15.3 million increased by 6.8% compared to bus
manufacturing operations Adjusted EBITDA of $14.3 million in 2005 Q4 even
though the Company's bus manufacturing operations experienced production
inefficiencies while significantly ramping up production through out the
second half of 2006 ("2006 H2") and ended the year with higher than optimal
work-in-process levels. 2006 Q4 Adjusted EBITDA from aftermarket operations
increased by 41.2% to $3.4 million from $2.4 million in the same quarter of
Fiscal 2005 resulting from higher sales from aftermarket operations.
    Consolidated revenue for Fiscal 2006 of $607.7 million increased by 2.9%
compared to Fiscal 2005 revenue of $590.8 million. Bus manufacturing
operations revenue of $540.3 million remained stable compared to Fiscal 2005
revenue from bus manufacturing operations of $537.4 million while revenue from
aftermarket operations for Fiscal 2006 of $67.4 million increased by 26.2%
compared to Fiscal 2005 aftermarket operation revenue of $53.4 million.
    Consolidated Adjusted EBITDA decreased by 19.0% to $59.4 million in
Fiscal 2006 compared to $73.4 million in Fiscal 2005, primarily related to
costs and delayed production volumes resulting from the strike at the Winnipeg
plant, production inefficiencies in 2006 H2 as the Company ramped up bus
manufacturing operations and higher than optimal work-in-process levels at the
end of Fiscal 2006.
    The 2006 Q4 positive results coupled with solid third quarter figures,
resulted in revenue for 2006 H2 of $335.1 million and Adjusted EBITDA of
$36.8 million, a significant increase from the first half of 2006 ("2006 H1")
revenue of $272.5 million and Adjusted EBITDA of $22.5 million, both of which
were negatively impacted by the strike at the Winnipeg facilities.
    During 2006 Q4 the Company generated Distributable Cash of C$18.7 million
and declared total distributions of C$12.2 million resulting in Distributable
Cash exceeding total distributions by C$6.5 million.
    The Company generated Distributable Cash for Fiscal 2006 of
C$45.4 million and declared total distributions of C$48.6 million representing
a payout ratio of 106.9%. The Company's cash balances funded the Fiscal 2006
shortfall of C$3.1 million.
    The board of directors have announced an increase in the annual rate of
distributions of C$0.03 per IDS effective the April 2007 distribution that is
payable May 15, 2007. The annual distributions are now expected to be
C$1.13 per IDS. This is NFI's first distribution increase since the IPO.
    The Company's overall cash position decreased $17.3 million during Fiscal
2006 primarily as a result of increased working capital investment required to
meet the higher production levels. The Company's current liquidity
requirements have been met with cash on hand ($4.0 million as at December 31,
2006) and a revolving credit facility, which was undrawn as at December 31,
    The Company reported a net loss of $22.2 million and $4.9 million in 2006
Q4 and Fiscal 2006, respectively. These losses are attributable in part to
interest expense (including interest on the IDS notes), distributions on class
B common shares and class C common shares, unrealized foreign exchange losses,
fair value adjustments to the class B common shares and class C common shares
and income taxes.
    During Fiscal 2006 our customers awarded New Flyer firm orders of
$771.9 million compared to awarded firm orders of $423.3 million during Fiscal
2005, which represents an increase in firm order activity of 82.4%. Included
in total firm bus orders are exercised options of $533.6 million (representing
69.1% of the firm orders awarded) in Fiscal 2006 compared to exercised options
of $187.6 million (representing 44.3% of the firm orders awarded) in Fiscal
    The Company's bus manufacturing order backlog, which includes both firm
orders and customer options, as at December 31, 2006 of approximately
$1.8 billion has decreased by 7.1% compared to the backlog of approximately
$2.0 billion at the end of the last fiscal year ended January 1, 2006. Based
on the recent increase in firm order activity and the general bid activity in
the U.S. heavy-duty transit bus market, management believes that the U.S.
market demand is continuing to improve following a period of reduced demand
from 2004 to early 2006. The firm order backlog of $849.3 million represents
46.3% of the total order backlog and has increased by $220.8 million or 35.1%
compared to the firm order backlog at the end of Fiscal 2005 of $628.5
million. This firm order backlog provides the order visibility to allow the
Company to efficiently plan the production schedule, thereby minimizing
expenses and working capital requirements and was the basis for management's
decision to significantly increase production levels during 2006.

    Conference Call

    A conference call for analysts and interested listeners will be held
Wednesday, March 28, at 4:00 p.m. (ET). The call-in numbers for listeners are
416-644-3419 or 800-731-5774. A live audio feed of the call will also be
available at:
    A replay of the call will be available from 6:00 p.m. (ET) on March 28,
2007 until 11:59 p.m. (ET) on April 4, 2007. To access the replay, call   
416-640-1917 or 877-289-8525, enter pass code number 21224074, and then press
the pound (No.) sign. The replay will also be available on the Company's web
site at

    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

    Certain statements in this press release are "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. The words "believes",
"anticipates", "plans", "expects", "intends", "projects", "estimates" and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements reflect management's current expectations regarding
future events and operating performance and speak only as of the date of this
press release. 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. Such differences may be
caused by factors which include, but are not limited to, changes in Canadian
or United States tax legislation, competition in the heavy-duty transit bus
industry, availability of funding to the Company's customers at current levels
or at all, material losses and costs may be incurred as a result of product
warranty issues, material losses and costs may be incurred as a result of
product liability claims, the Company's success depends on a limited number of
key executives who the Company may not be able to adequately replace in the
event that they leave the Company, the absence of fixed term customer
contracts and the termination of contracts by customers for convenience, the
current "Buy-America" legislation may change and/or become more onerous,
production delays may result in liquidated damages under the Company's
contracts with its customers, currency fluctuations could adversely affect the
Company's financial results or competitive position in the industry, the
Company may not be able to maintain performance bonds or letters of credit
required by its contracts, third party debt service obligations may have
important consequences to the Company, interest rates could change
substantially and materially impact the Company's profitability, the
dependence on limited sources of supply, the Company's profitability and
performance can be adversely affected by increases in raw material and
component costs, and the availability of labour could have an impact on
production levels. The Company cautions that this list of factors is not
exhaustive. 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 the 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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