New Flyer Announces Strong Operating Results for the Third Quarter of 2007 Fiscal Year


    -   2007 Q3 Consolidated Adjusted EBITDA of $23.8 million increases by
        38% compared to 2006 Q3.
    -   2007 Q3 bus manufacturing operations Adjusted EBITDA of
        $19.4 million increases 43% over 2006 Q3 due to ramp-up of bus
    -   Continued growth of aftermarket operations results in 2007 Q3 revenue
        and Adjusted EBITDA increase of 22% and 30%, respectively, compared
        to 2006 Q3.
    -   2007 Q3 Distributable Cash of C$18.4 million results in excess of
        C$5.1 million over distributions declared in 2007 Q3.
    -   The Company announces intention to utilize excess cash to redeem
        Class B and Class C shares issued by New Flyer Holdings, Inc.
    -   Total order backlog of $2.5 billion (representing 6,641 equivalent
        units) increased by 36.8% compared to December 31, 2006 total order
        backlog of $1.8 billion (representing 5,313 equivalent units).

    WINNIPEG, Nov. 12 /CNW/ - New Flyer Industries Inc. (TSX:NFI.UN) ("New
Flyer" or the "Company"), the leading manufacturer of heavy-duty transit buses
in Canada and the United States, today announced its results for the 13-week
period ("2007 Q3") and for the 39-week period ("2007 YTD") ended September 30,
2007. Full financial statements and Management's Discussion and Analysis (the
"MD&A") are available at the Company's web site at: Unless otherwise indicated all
monetary amounts in this press release are expressed in U.S. dollars.
    Higher bus production and delivery levels in response to the Company's
growing bus order backlog and continued strong growth in aftermarket
operations resulted in consolidated revenue for 2007 Q3 of $202.6 million,
which represents an increase of 26.2% compared to consolidated revenue for the
third quarter of 2006 ("2006 Q3") of $160.5 million. Bus manufacturing revenue
in 2007 Q3 of $181.3 million increased by 26.8% compared to bus manufacturing
revenue of $143.1 million in 2006 Q3. Total bus deliveries in 2007 Q3 were 466
equivalent units, which represents a volume increase of 18.9% compared to 2006
Q3 deliveries of 392 equivalent units. This increase in delivery volumes is
due to the significant improvement in firm order position throughout 2006 and
2007 YTD, which resulted in the Company increasing production rates. The
balance of the increase in bus manufacturing revenue is primarily attributable
to product sales mix and passing cost increases through to customers. 2007 Q3
aftermarket operations revenue of $21.3 million increased by 21.9% compared to
$17.4 million in 2006 Q3. The growth in aftermarket operations is a result of
growth in market share as New Flyer buses continue to represent a larger share
of the active installed fleet in the combined United States and Canadian
    Consolidated Adjusted EBITDA for 2007 Q3 totaled $23.8 million compared
to $17.2 million in 2006 Q3, which represents an increase of 38.4%. The
reported consolidated Adjusted EBITDA is a result of sustaining the higher
production and delivery levels attained in 2007 due to the improved bus order
backlog position, favourable bus manufacturing operations sales mix and
continued growth of the Company's aftermarket operations. 2007 Q3 bus
manufacturing operations Adjusted EBITDA of $19.4 million increased by 43.1%
compared to bus manufacturing operations Adjusted EBITDA of $13.6 million in
the corresponding period of 2006. The improvement in bus manufacturing
operations performance is the result of higher deliveries and higher contract
margins related to product sales mix. 2007 Q3 aftermarket Adjusted EBITDA of
$4.6 million increased by 29.6% compared to $3.5 million in 2006 Q3, which
exceeds the increase in aftermarket sales as a result of higher gross profit
    The Company reported a net loss of $14.0 million and $0.8 million in 2007
Q3 and 2006 Q3, respectively. With 2007 Q3 earnings from operations increasing
by $8.2 million and interest costs increasing by $0.8 million, the decrease in
net earnings is attributable to non-cash charges to earnings and increased
income tax provisions. In 2007 Q3, non-cash charges to earnings totaled
$15.5 million compared to non-cash charges included in 2006 Q3 earnings of
$3.0 million. This change in non-cash items included in earnings related to
fair value adjustments to assets and liabilities, unrealized foreign exchange
losses, and amortization. Fair value adjustments to other liabilities for
Class B and Class C common shares resulted in a non-cash gain to earnings of
$4.6 million in 2007 Q3 compared to a non-cash gain of $2.2 million in 2006
Q3. Gains credited to earnings for the fair value adjustment to other
liabilities for Class B and Class C common shares reflect the decrease in the
value of those shares, which has decreased together with the value of New
Flyer's IDSs during 2007 Q3 and 2006 Q3. Unrealized foreign exchange losses
charged to earnings in 2007 Q3 were $15.7 million compared to a gain of
$0.5 million in 2006 Q3 and relate to unrealized foreign exchange losses on
IDS notes, subordinated notes issued separately from IDS notes and forward
foreign exchange contracts. Interest charges (including distributions on Class
B and Class C shares) have increased primarily due to the increase in the rate
of distributions declared in 2007.
    On July 12, 2007, the Company and New Flyer Industries Canada ULC
(collectively, the "Issuer") issued an additional 9,410,000 IDSs at a price of
C$11.70 each to raise gross proceeds of C$110.1 million. Proceeds from the
offering (net of certain costs) were used to purchase for cancellation
10,490,293 Class C common shares of New Flyer Holdings, Inc. ("NFL Holdings").
After closing of the offering and this repurchase, NFI holds an approximate
55.3% voting and economic interest in NFL Holdings. Management expects this
change in the outstanding capital to have a neutral impact on the after-tax
cash flow of the Company.
    During 2007 Q3 the Company generated Distributable Cash of C$18.4 million
and declared total distributions of C$13.2 million resulting in Distributable
Cash exceeding total distributions by C$5.1 million. In comparison, 2006 Q3
Distributable Cash totaled C$16.6 million and the Company declared total
distributions of C$12.1 million resulting in a surplus of $4.6 million.
    Cumulatively, since the Issuer's initial public offering on August 19,
2005, the Company has generated Distributable Cash of C$126.0 million and
declared distributions of $104.8 million resulting in a cumulative surplus of
C$21.2 million.
    The Company's positive cash flow from operations before working capital
has been offset by an increased investment in working capital. As a result,
the Company's liquidity position as at September 30, 2007 totaled
$43.6 million comprised of cash balances of $3.6 million and a $40 million
revolving credit facility, which was undrawn as at September 30, 2007. In
comparison, the Company began the current fiscal year with total liquidity of
$44.0 million. Management expects to reduce the investment in working capital
through a reduction in work-in-process and accounts receivable during the
remainder of the year and early 2008.
    In the event that there is any excess cash, the board of directors of the
Company will consider utilizing such excess cash for future redemptions of
Class B shares and Class C shares of NFL Holdings, subject to the provisions
of the Company's senior credit agreement and IDS note indenture. Based on
current exchange rates and the foreign exchange provisions in the
securityholders' agreement of NFL Holdings, further redemptions are expected
to be accretive to the after-tax cash flow of the Company.
    The total order backlog (including firm orders and options) of
approximately $2.5 billion (representing 6,641 equivalent units) as at
September 30, 2007 increased by 36.8% compared to the total order backlog of
approximately $1.8 billion (representing 5,313 equivalent units) as at
December 31, 2006. Based on the significant increase in order activity in 2006
and 2007, and the current strong 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.
    During 2007 Q3 our customers awarded New Flyer firm orders of
$386.1 million (2007 YTD - $795.5 million) compared to 2006 Q3 awarded firm
orders of $171.7 million (2006 YTD - $561.9 million), which represents an
increase of 124.9% (YTD increase of 41.6%). As a result of new order activity
and deliveries during 2007 Q3, the firm order backlog as of September 30, 2007
is $1.1 billion, which represents 44.6% of the total backlog. The firm order
backlog, which represents 2,703 equivalent units of production, provides the
order visibility to allow the Company to efficiently plan the production
schedule, thereby minimizing expenses and working capital requirements and is
supportive of the current levels of production.

    Conference Call

    A conference call for analysts and interested listeners will be held on
Tuesday, November 13th, at 9:00 a.m. (ET). The call-in number for listeners is
800-732-6179. A live audio feed of the call will also be available at:
    A replay of the call will be available from 11:00 a.m. (ET) on November
13th until 11:59 p.m. (ET) on November 20th. To access the replay, call
416-640-1917 or 877-289-8525, enter pass code number 21250908, and then press
the pound 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.
"Distributable Cash" means cash flows from operations adjusted for changes in
non-cash working capital items, and effect of foreign currency rate on cash
and cash equivalents and increased for withholding taxes, defined benefit
funding, distributions on Class B and Class C common shares, follow-on
offering related costs, fair market value adjustment to inventory, fair market
value adjustment to prepaid expenses, proceeds on sale of redundant assets,
and interest on subordinated notes forming part of IDSs and decreased for
defined benefit expense, maintenance capital expenditures, and principal
payments on capital leases. 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 2,200 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 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, 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, changes in Canadian or United States tax
legislation, 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
the Company assumes no 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:

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890