Highlights:

• 2008 Q1 Consolidated Adjusted EBITDA of $27.0 million increases 27.1% over 2007 Q1 resulting in Consolidated Adjusted EBITDA of $101.6 million for the 52-weeks ended March 30, 2008.
• Bus manufacturing operations Adjusted EBITDA of $21.3 million increases 24.7% over 2007 Q1 with unit deliveries increasing by 2.4%.
• Continued growth of aftermarket operations resulted in 2008 Q1 revenue and Adjusted EBITDA increase of 28.8% and 32.5%, respectively, compared to 2007 Q1.
• 2008 Q1 Distributable Cash of C$19.3 million increases by 29.9% compared to 2007 Q1 and results in excess cash of C$6.1 million compared to distributions declared in 2008 Q1, which represents a payout ratio of 68.2%.
• Positive cash flows from operations resulted in a liquidity position of $68.7 million at March 30, 2008 compared to $65.3 million at December 30, 2007
• Total order backlog of $3.0 billion increased by 5.2% compared to December 30, 2007. New firm orders for 2008 Q1of $240.6 million increased by 137.8% compared to new firm orders in 2007 Q1

WINNIPEG, May 12, 2008

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 for the 13-week period ended March 30, 2008 ("2008 Q1"). Full financial statements and Management's Discussion and Analysis (the "MD&A") are available at the Company's web site at: www.newflyer.com/index/financialreport. References in this press release to “New Flyer” or the “Company” are to New Flyer Holdings, Inc. (“NFL Holdings”) and its consolidated subsidiaries immediately prior to, and to New Flyer Industries Inc. and its consolidated subsidiaries immediately following, the consummation of the transactions described in note 1 of the consolidated financial statements of NFI for the period ended December 30, 2007 under “July 12, 2007 transaction” (the “Follow-on Offering”).

Increased bus production, stable delivery levels and continued robust growth in aftermarket operations resulted in consolidated revenue for 2008 Q1 of $224.4 million, which represents an increase of 1.7% compared to consolidated revenue for the 13-week period ended April 1, 2007 (“2007 Q1”) of $220.6 million. Bus manufacturing revenue in 2008 Q1 of $199.5 million decreased by 0.9% compared to bus manufacturing revenue of $201.2 million in 2007 Q1. Total bus deliveries in 2008 Q1 were 503 equivalent units, which represents a volume increase of 2.4% compared to 2007 Q1 deliveries of 491 equivalent units. The average price per equivalent unit delivered in 2008 Q1 was $396.6 thousand compared to $409.9 thousand in 2007 Q1, representing a decrease of 3.2%. This decrease is entirely attributable to product sales mix. 2008 Q1 aftermarket operations revenue of $25.0 million increased by 28.8% compared to $19.4 million in 2007 Q1. The continued strong growth in aftermarket operations is a result of increase 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 market.

Consolidated Adjusted EBITDA for 2008 Q1 totaled $27.0 million compared to $21.2 million in 2007 Q1, which represents an increase of 27.1%. This increase in consolidated Adjusted EBITDA is a result of increased bus production and delivery levels, favourable bus manufacturing operations sales mix, improved manufacturing efficiencies and continued revenue and profit margin growth of the Company’s aftermarket operations. 2008 Q1 bus manufacturing operations Adjusted EBITDA of $21.3 million increased by 24.7% compared to bus manufacturing operations Adjusted EBITDA of $17.1 million in 2007 Q1. The improvement in bus manufacturing operations is the result of higher contract margins related to product sales mix and improved manufacturing efficiencies. 2008 Q1 aftermarket operations Adjusted EBITDA of $5.6 million increased by 32.5% compared to $4.2 million in 2007 Q1, which exceeds the increase in aftermarket operations revenue, as a result of higher gross profit margins.

The Company reported net earnings of $35.7 million in 2008 Q1 compared to a net loss of $3.0 million in 2007 Q1. In addition to the increase in consolidated Adjusted EBITDA of $5.8 million in 2008 Q1 compared to 2007 Q1, the improvement in net earnings is a result of non-cash recoveries offset by interest costs. In 2008 Q1, non-cash recoveries totaled $24.2 million compared to non-cash charges included in 2007 Q1 earnings of $6.0 million. This change in non-cash items included in earnings related to fair value adjustments to assets and liabilities, unrealized foreign exchange gains, and amortization. Interest expense increased $1.4 million in 2008 Q1 compared to 2007 Q1, due primarily to the increase in interest on the Subordinated Notes issued in connection with the Follow-on Offering, offset by the related current income tax savings and the impact of fewer distributions on the Class B and Class C common shares resulting from the purchase for cancellation of Class C shares using the net proceeds of the Follow-on Offering.  

The Company generated Distributable Cash of C$19.3 million during 2008 Q1 and declared distributions of C$13.2 million, which represents a 2008 Q1 payout ratio of 68.2%. During 2007 Q1, the Company generated Distributable Cash of C$14.9 million and declared distributions of C$12.3 million, resulting in a payout ratio of 82.6%. The 17.5% improvement in 2008 Q1 payout ratio compared to 2007 Q1 also includes an increase in distributions of 7.3% during 2007.

Cumulatively, since the Issuer’s initial public offering on August 19, 2005, the Company has generated Distributable Cash of C$158.4 million and has declared distributions of $131.0 million, resulting in a cumulative surplus of C$27.3 million and a payout ratio of 82.7%.

The Company’s positive cash flow from operations has resulted in a net cash inflow of $3.4 million during 2008 Q1. As a result, the Company’s liquidity position as at March 30, 2008 totaled $68.7 million comprised of cash balances of $28.7 million and a $40.0 million revolving credit facility, which was undrawn as at March 30, 2008. In comparison, the Company’s liquidity position as at December 30, 2007 was $65.3 million.

In the event that there is any excess cash as determined pursuant to the provisions of the Company’s senior credit agreement and Subordinated Note indenture, the board of directors of the Company will consider utilizing such excess cash for future redemptions of Class B and Class C common shares.

The total order backlog (including firm orders and options) of approximately $3.0 billion (representing 7,222 equivalent units) as at March 30, 2008 increased by 5.2% compared to the total order backlog of approximately $2.8 billion (representing 6,916 equivalent units) as at December 30, 2007. 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 expected to remain strong for the remainder of 2008.

During 2008 Q1 our customers awarded New Flyer firm orders of $240.6 million compared to 2007 Q1 awarded firm orders of $101.2 million, which represents an increase of 137.8%. As a result of new order activity and deliveries during 2008 Q1, the firm order backlog as of March 30, 2008 is $1.3 billion, which represents 44.0% of the total backlog. The firm order backlog, which represents 2,937 equivalent units of production, provides the Company with the order visibility to efficiently plan the production schedule, thereby minimizing expenses and working capital requirements, and is supportive of the current and planned levels of production.

On April 10, 2008, New Flyer Industries Inc. (“NFI”) and New Flyer Industries Canada ULC (“NFI ULC”) together issued 8,770,000 IDSs. The IDSs were sold at a price of C$11.40 per IDS resulting in gross proceeds of approximately C$100.0 million. NFI ULC also sold, on a private placement basis, approximately C$4.9 million aggregate principal amount of subordinated notes not forming part of IDSs (“Separate Subordinated Notes”). The Separate Subordinated Notes are identical in all respects to the Subordinated Notes represented by IDSs, and were issued pursuant to the same indenture. The Company used the net proceeds to redeem 10,830,901 Class C common shares of NFL Holdings. After giving effect to this transaction, NFI increased its ownership of NFL Holdings from an approximate 55.3% to an approximate 74.9% economic and voting interest of NFL Holdings, while management and non-management holders of Class B and Class C common shares of NFL Holdings decreased their ownership interest of NFL Holdings in the aggregate from an approximate 44.7% to an approximate 25.1% economic and voting interest.

Conference Call

A conference call for analysts and interested listeners will be held Tuesday, May 13, at 11:00 a.m. (ET). The call-in number for listeners is 800-732-9303. A live audio feed of the call will also be available at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2253020

A replay of the call will be available from 1:00 p.m. (ET) on May 13^th until 11:59 p.m. (ET) on May 20th. To access the replay, call 416-640-1917 or 877-289-8525, enter pass code number 21270091, followed by the pound sign (#). The replay will also be available on the Company's web site.

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 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 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.

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 Issuer'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, 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 existing contracts or obtain performance bonds and letters of credit required for new 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 Issuer cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Issuer’s materials filed with the Canadian securities regulatory authorities and 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 Issuer and the Company assume no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws.

For further information:
Glenn Asham
Chief Financial Officer
Tel: (204) 224-1251
E-mail: investor@newflyer.com