New Flyer Industries Inc. and New Flyer Industries Canada ULC announce July cash distribution and amendment to senior credit facility

    WINNIPEG, July 4 /CNW/ - (TSX:NFI.UN) New Flyer Industries Inc. ("NFI")
and New Flyer Industries Canada ULC ("NFI ULC") (together, "New Flyer") today
announced that the thirty-fifth consecutive monthly cash distribution on the
income deposit security ("IDS") of New Flyer in the amount of $0.0975 will be
payable on August 15, 2008, to holders of record of IDSs at the close of
business on July 31, 2008. The IDSs trade on the Toronto Stock Exchange under
the symbol NFI.UN.
    Each IDS consists of one common share of NFI (a "common share") and
C$5.53 principal amount of 14% subordinated notes of NFI ULC (the
"subordinated notes"), an indirect subsidiary of NFI. The total distribution
of C$0.0975 per IDS reflects a cash dividend of C$0.03298 per common share and
an interest payment of C$0.06452 per C$5.53 principal amount of subordinated
notes for the period from July 1, 2008 to July 31, 2008.
    All dividends paid by NFI to Canadian residents on the common shares
after December 31, 2005 are designated as "eligible dividends" for purposes of
the enhanced dividend tax credit rules contained in the Income Tax Act
(Canada) and any corresponding provincial and territorial tax legislation. In
addition, unless stated otherwise, all dividends paid by NFI hereafter on the
common shares are designated as "eligible dividends" for the purpose of such
    New Flyer also announced that NFI ULC has recently entered into an
amendment to its senior credit facility in order to better align the
provisions of the senior credit facility with the working capital intensive
nature of New Flyer's business and month-to-month variations in cash flows and
earnings. The amendments have relaxed the restrictions on NFI ULC and certain
of its affiliates relating to the payment of dividends. As before, dividends
may only be paid from accumulated excess cash flow (as determined in
accordance with the senior credit facility); however, fluctuations in working
capital will no longer be included in determining excess cash flow.
Additionally, dividends may now be paid based on excess cash flow generated
during the prior four fiscal quarters.
    The inclusion of working capital fluctuations in the determination of the
pre-existing dividend restrictions under the senior credit facility resulted
in certain breaches of such restrictions during 2006 and 2007. The substantial
growth of New Flyer's business since the IPO in 2005 and the working capital
necessary to support that growth contributed to these issues. In connection
with the amendment, New Flyer's senior lenders waived the past breaches.
Similar breaches had also occurred under the note indenture governing NFI
ULC's subordinated notes. NFI ULC has rectified those breaches and has
established a procedure to better align the ability to fund dividends on NFI's
common shares under the provisions of the note indenture with the ability to
do so under the amended senior credit facility.
    Notwithstanding these historical events, management has determined that
New Flyer has generated a significant cumulative surplus of excess cash (for
the purposes of both the senior credit facility and the note indenture) over
and above the amount of dividends paid since the IPO. These amendments will
facilitate the ability of New Flyer to continue to make consistent monthly
distributions on the IDSs.
    John Marinucci, President and CEO of New Flyer, said, "The amendments to
our senior credit facility are an important step forward in better aligning
the requirements of the facility with the nature of New Flyer's business. As
demonstrated by the significant growth in Adjusted EBITDA and backlog over the
last five quarters and a 73.4% Distributable Cash payout ratio for the
52 weeks ended March 30, 2008, New Flyer's business has continued to perform
very strongly."

    About New Flyer
    New Flyer is the leading manufacturer of heavy-duty transit buses in the
United States and Canada and a leading provider of aftermarket services. New
Flyer has the broadest range of products in the heavy-duty transit bus
industry and provides its products and services to the majority of the largest
transit authorities in North America.

    Non-GAAP Measures
    Adjusted EBITDA consists of earnings before interest, income taxes,
depreciation, amortization and other non-cash charges, adjusted for certain
costs related to the July 12, 2007 transaction and certain other non-recurring
charges as set out in New Flyer's Management Discussion & Analysis. Management
believes Adjusted EBITDA and Distributable Cash (as defined below) are useful
measures in evaluating the performance of New Flyer. "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 increased for
withholding taxes related to capital transactions, 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, fair market value adjustment to
deferred revenue, fair market value adjustment to accounts payable and accrued
liabilities 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.

    Forward-Looking Statements
    This press release may contain forward-looking statements relating to
expected future events and financial and operating results of NFI and NFI ULC
that involve risks and uncertainties. Actual results may differ materially
from management expectations as projected in such forward-looking statements
for a variety of reasons, including market and general economic conditions,
the covenants contained in NFI ULC's senior credit facility and subordinated
note indenture and the other risks and uncertainties detailed in the
disclosure documents filed with the Canadian securities regulatory
authorities. Due to the potential impact of these factors, NFI and NFI ULC
disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, unless required by applicable law.

For further information:

For further information: New Flyer Industries Inc., Glenn Asham, Chief
Financial Officer, Tel: (204) 224-1251

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