Mr. Jon Koffman reports

NEW FLYER ANNOUNCES 2013 THIRD QUARTER RESULTS

New Flyer Industries Inc. has released its results for the 13-week period ended Sept. 29, 2013. Full financial statements and management's discussion and analysis are available at the company's website. Unless otherwise indicated, all monetary amounts in this press release are expressed in U.S. dollars.

Summary:

• 2013 third-quarter consolidated revenue of $309.0-million increased by 48.2 per cent compared with the 2012 third quarter primarily due to incremental revenue associated with the acquisition of the NABI bus and parts businesses and the Orion parts business;
• 2013 third-quarter consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $24.4-million increased by $10.3-million or 73.5 per cent compared with 2012 third quarter and net earnings of $7.8-million increased by 420 per cent compared with $1.5-million in 2012 third quarter;
• 2013 third-quarter free cash flow was $13.1-million (Canadian) and declared dividends were $8.1-million (Canadian) during 2013 third quarter. The current dividend rate is expected to be maintained;
• Liquidity improved by $7.1-million during 2013 third quarter resulting in closing liquidity of $90.5-million;
• Total bus order backlog at the end of 2013 third quarter was $4.6-billion, representing an increase of $900-million during the quarter. Book-to-bill ratio for the 12-month period ended Sept. 29, 2013, was 309 per cent, which represents the third consecutive quarter where the ratio exceeded 100 per cent.

                                 OPERATING RESULTS

                                               Q3      Q3      YTD    YTD
Bus deliveries                               2013    2012     2013   2012

Number of equivalent units delivered          577     386    1,556  1,269
Average selling price per EU
(U.S. dollars in thousands)                $434.4  $464.6   $435.7 $451.5

The increased deliveries were as a result of including deliveries of buses by NABI Bus LLC, the company's newly acquired business, effective June 21, 2013. The average selling price has decreased as a result of sales mix when comparing the two periods.

The company line-entered 592 EUs in 2013 third quarter, which, on a weekly basis, is less than management's planned average weekly rate of 48 EUs. This was due to the companywide planned summer vacation that decreased production during the first week of 2013 third quarter.

                      FINANCIAL HIGHLIGHTS
                  (in millions of U.S. dollars)

                                   Q3      Q3     YTD     YTD
                                 2013    2012    2013    2012       

Bus                            $250.6  $179.3  $678.0  $572.9 
Aftermarket                      58.3    29.1   147.0    90.1 
                               ------- ------- ------- -------
Total revenue                   309.0   208.4   825.0   663.0 
Earnings from operations         13.8     7.8    27.1    25.8  
Non-cash recoveries (charges)     1.8    (0.9)   (0.4)   (8.1)   
Interest expense                 (3.6)   (3.9)  (11.1)  (11.8)   
Income taxes expense             (4.2)   (1.5)   (2.6)   (0.5)
                               ------- ------- ------- -------
Net earnings                   $  7.8  $  1.5  $ 13.0  $  5.4  
                               ======= ======= ======= =======

The increase in 2013 third-quarter revenue primarily resulted from a 49.5-per-cent increase in total bus deliveries compared with the 13-week period ended Sept. 30, 2012, deliveries offset by a sales mix with lower average selling prices.

The increase in revenue from aftermarket operations is primarily a result of increased volumes including incremental revenue from the Orion parts business and the recently acquired parts business of NABI Parts.

Revenue from bus manufacturing operations for the 39-week period ended Sept. 29, 2013, also increased compared with the 39-week period ended Sept. 30, 2012. The 2013 YTD increase is due to increased deliveries compared with 2012 YTD.

Revenue from aftermarket operations for 2013 YTD increased compared with 2012 YTD primarily as a result of increased volumes resulting from incremental revenue from the Orion parts business subsequent to the March 1, 2013, acquisition date and the NABI parts business subsequent to June 21, 2013.

Third-quarter 2013 and 2013 YTD bus manufacturing operations adjusted EBITDA increased primarily due to the addition of the NABI bus operations. Profit margins can vary significantly between orders due to factors such as pricing, order size and product type. Adjusted EBITDA from bus manufacturing operations per EU can be volatile on a quarterly basis and therefore, management believes that a longer-term view should be taken when comparing bus manufacturing operations margins.

Third-quarter 2013 and 2013 YTD aftermarket operations adjusted EBITDA increased compared with their 2012 respective periods, primarily due to the addition of the NABI parts and Orion parts businesses offset by margin compression as a result of pricing pressure in the market. The aftermarket operations adjusted EBITDA for 2013 third quarter and 2013 YTD was normalized for non-recurring transitional costs of $400,000 and $1.2-million, respectively.

The company reported net earnings of $7.8-million in 2013 third quarter, an increase compared with net earnings of $1.5-million in 2012 third quarter, primarily as a result of a $6.0-million increase in earnings from operations and the $2.7-million increase of the non-cash recoveries caused by the favourable impact of foreign currency translation resulting from the weakening Canadian dollar, offset somewhat by increased income taxes.

YTD 2013 net earnings were $13.0-million increased compared with 2012 YTD net earnings of $5.4-million, primarily due to significantly reduced non-cash charges, as 2012 YTD non-cash charges included a $5.5-million loss on exercise of the redemption right on the 14-per-cent subordinated notes and a $1.4-million charge associated with fair value change in the embedded derivative call option included in the subordinated notes.

Liquidity

The amount of dividends declared increased in 2013 third quarter as a result of issuing 11.1 million common shares in 2013 YTD to strategic investor Marcopolo SA. The amount of dividends declared in 2013 YTD is lower than 2012 YTD as a result of reducing the annual dividend rate to 58.5 Canadian cents per common share, effective for all dividends declared after Aug. 20, 2012. Management believes that sufficient free cash flow will be generated to maintain this current annual dividend rate.

During 2013 third quarter, the company improved its liquidity position by $7.1-million by generating cash from operating activities of $16.4-million which offset the $11.9-million of cash used for investing and financing activities and a $2.6-million reduction of letters of credit outstanding. The $7.5-million repayment of the company's revolving credit facility during 2013 third quarter does not factor into the change in liquidity position.

Bid universe, backlog and book-to-bill ratio

Management believes that the transit market continues to show positive signs of recovery. A number of large bids were awarded in 2013 third quarter, as New Flyer won new orders totalling 2,431 EUs. As well, the total New Flyer bid universe remains high at 19,941 EUs, where the total number of active EUs (request for proposals received and in process of review at New Flyer, and bids or proposals submitted by New Flyer awaiting customer action) at the end of 2013 third quarter was 8,117 EUs, compared with 5,876 EUs at Sept. 30, 2012.

The total New Flyer backlog at the end of 2013 third quarter was 9,890 EUs, an increase of 15.9 per cent from the backlog at the end of the second quarter of 2013. The firm portion of the total backlog at the end of 2013 third quarter is made up of 2,748 EUs which has increased 22.0 per cent compared with 2,252 EUs at the end of 2013 second quarter. The total value of the order backlog at the end of 2013 third quarter was $4.6-billion, compared with $3.7-billion at the end of 2013 second quarter.

New Flyer's book-to-bill ratio (defined as new order intake -- both firm and options -- divided by deliveries) for the last 12 months ending Sept. 29, 2013, was 309 per cent as compared with only 33 per cent for the LTM ended Sept. 30, 2012. A ratio of above 100 per cent implies that more orders were received than filled, indicating strong demand.

Outlook

The company has been very active over the last few years as it continues to lead the heavy-duty transit bus industry in Canada and the United States, and is executing on its the strategic plan by investing to pursue long-term stability, diversification and growth.

As has been highlighted many times over the past few years, the number of active heavy-duty transit bus procurements dropped noticeably since the financial crisis that began in 2008. In order to replenish decreasing backlogs in an environment of fewer procurements, prices for new contracts declined dramatically. A significant portion of New Flyer's order backlog comprises orders obtained during this time period and management expects that on average, margins on orders planned for 2014 production will be lower than the average margins achieved during the period of excess capacity.

Management does not yet feel an increase to the average annual production rate is sustainable. Management currently expects the average line entry rate to be approximately 51 EUs per production week during the 12 available production weeks in the fourth quarter of 2013, even though the company does not plan to line enter new buses into production during the winter holiday period occurring the last week of this year. The result is an expected average of 36 EUs line entered per production week at New Flyer for fiscal 2013, and an expected average of 12 EUs line entered per production week at NABI since its acquisition in June, 2013.

Management is very encouraged by its efforts to grow the aftermarket parts business. The company has substantially completed the integration of the Orion aftermarket parts business into the New Flyer parts business and is actively engaged in a strategic review of the New Flyer and NABI parts businesses.

Despite the pressure on margins, the company continues to pursue cost and overhead savings in daily operations through its operational excellence initiatives and as part of the long term NABI integration and platform strategy development and management expects that the company will remain in compliance with all credit facility covenants and will be able to maintain dividends at current levels.

Conference call

A conference call for analysts and interested listeners will be held on Thursday, Nov. 7, 2013, at 2 p.m. (ET). The call-in number for listeners is 888-231-8191 or 647-427-7450. A live audio feed of the call will also be available on-line.

A replay of the call will be available from 4 p.m. (ET) on Nov. 7, 2013, until 11:59 p.m. (ET) on Nov. 14, 2013. To access the replay, call 416-849-0833 or 855-859-2056 and then enter pass code No. 72612422. The replay will also be available on New Flyer's website.

We seek Safe Harbor.