New Flyer Provides Financial Update: 2008 Q4 Adjusted EBITDA Negatively Impacted by Canadian Dollar Depreciation

The Company’s Adjusted EBITDA, reported in U.S. dollars, is expected to be reduced by approximately US$ 5.5 million in 2008 Q4 compared to 2008 Q3 primarily due to the significant depreciation in the value of the Canadian dollar during the period. Based on the most recent calculations, management expects that the depreciation of the Canadian dollar resulted in a reduction of Adjusted EBITDA for 2008 Q4 of approximately US$ 4 million. The Company’s cash flow for 2008 Q4 and for the year ended December 28, 2008 was adequate to maintain the current level of distributions to IDS holders as reductions in interest, income taxes and distributions denominated in Canadian dollars provided a natural hedge against the impact of Canadian dollar depreciation.

In advance of the completion and release of the financial statements, New Flyer is providing this update regarding its expected financial results for 2008 Q4. The results described above are based on management’s current expectations and are subject to change in the process of completing the financial statements and audit process.

As previously reported in the Company’s Management Discussion and Analysis for 2008 Q3, the Company’s net Canadian dollar inflow together with the significant and accelerated depreciation of the Canadian dollar in 2008 Q4 results in a reduction of revenue and Adjusted EBITDA when measured in US dollars. New Flyer operates in both Canada and the U.S. resulting in revenues and operating costs being denominated in both of these countries’ currencies, with the Company’s financial statements being reported in US dollars. During 2008 Q4, the Company’s Canadian dollar revenue significantly exceeded Canadian dollar operating costs. However, interest costs, income taxes, and distributions to IDS holders are primarily denominated in Canadian dollars which results in a natural hedge against a portion of the foreign exchange impact on net cash inflow of Canadian dollars. This natural hedge mitigates the impact on net Canadian dollar cash flow due to Canadian dollar depreciation. Approximately US$ 3 million of the US$ 4 million expected reduction in Adjusted EBITDA is offset by the natural hedge resulting in an expected US$ 1 million reduction to net cash flow.

A conference call for analysts and interested listeners will also be held on Thursday, March 19, 2008 at 4:30 p.m. (Toronto time). The call-in number for listeners is 800-733-7560. A live audio feed of the call will also be available at:

http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2542760

A replay of the call will be available from 6:30 p.m. (ET) on March 19, 2009 to 11:59 p.m. on March 26, 2009. To access the replay, call 416-640-1917 or 877-289-8525, enter the pass code number 21297007, and then press the pound # sign. The replay will also be available on the Company’s website at www.www.newflyer.com.

Unless otherwise indicated all monetary amounts in this press release are expressed in U.S. dollars.

Non-GAAP Measures
Adjusted EBITDA consists of earnings before interest, income taxes, depreciation, amortization and other non-cash charges, adjusted for IPO and follow-on offering related costs and certain other non-recurring charges as set out in the Company’s prior published Management Discussion and Analysis. Management believes Adjusted EBITDA is a useful measure in evaluating the performance of the Company. Adjusted EBITDA is not an earnings measure recognized under GAAP and does not have a standardized meaning as prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other entities. Investors are cautioned that Adjusted EBITDA 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 2,300 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 2008 financial results and its 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 the Company’s 2008 financial results and 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 www.sedar.com.

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:
Glenn Asham
Chief Financial Officer
Tel: (204) 224-1251
E-mail: [email protected]