Summary (U.S. Dollars except as noted):

Revenue of $553.2 million increased by 45.5% compared to 2015 Q1 revenue of $380.3 million .

Adjusted EBITDA of $68.2 million increased by 117.0% compared to 2015 Q1 of $31.4 million .

Net earnings of $22.6 million in 2016 Q1 increased 108.1% compared to $10.9 million in 2015 Q1 and earnings per share of $0.40 increased from $0.20 in 2015 Q1.

Liquidity improved by $23.0 million to $196.9 million during 2016 Q1.

Free Cash Flow of C$61.5 million generated in 2016 Q1 increased 400.0% compared to $12.3 million in 2015 Q1 while dividends of C$10.4 million were declared in 2016 Q1 compared to C$8.1 million during 2015 Q1.

Annual dividend rate increased 35.7% to C$0.95 , effective for dividends declared subsequent to May 12, 2016 . This increase is based on the Free Cash Flow payout ratio for 2016 Q1 of 17%.

WINNIPEG, May 12, 2016 /CNW/ - New Flyer Industries Inc. (TSX:NFI) (TSX:NFI.DB.U) (the "Company"), the largest transit bus and motor coach manufacturer and parts distributor in North America, today announced its results for the 14-week period ended April 3, 2016 ("2016 Q1"). Full unaudited interim condensed 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 . Unless otherwise indicated all monetary amounts in this press release are expressed in U.S. dollars.

Operating Results









Transit Bus and Coach Deliveries 2016 2015 % (U.S. dollars in thousands) Q1 Q1 change New transit bus and coaches

829

572 44.9 % Pre-owned coaches

104

— 100.0 % Number of Total equivalent units ("EUs") delivered

933

572 63.1 %













New transit bus and coaches average selling price $ 514.0 $ 508.2 1.1 % Pre-owned coaches average selling price

133.6

— 100.0 % Total average EU selling price $ 471.6 $ 508.2 (7.2) %













Consolidated Revenue 2016 2015 % (U.S. dollars in millions) Q1 Q1 change Transit Bus and Coach Manufacturing $ 440.0 $ 290.7 51.4 % Aftermarket

113.3

89.6 26.4 % Total Revenue $ 553.3 $ 380.3 45.5 %

The increase in 2016 Q1 revenue primarily resulted from a 63.1% increase in total transit bus and coach deliveries compared to 2015 Q1 deliveries and a 7.2% decrease in average selling price per EU in 2016 Q1 compared to 2015 Q1. The deliveries increased primarily as a result of the inclusion of new and pre-owned coaches of Motor Coach Industries' ("MCI") and an extra week in 2016 Q1 as compared to 2015 Q1. The decrease in average selling price is the result of changes in the product sales mix which now includes pre-owned coaches.

The increase in aftermarket operations revenue in 2016 Q1 is primarily a result of aftermarket revenues generated by MCI and an extra week in 2016 Q1 as compared to 2015 Q1. The pro forma aftermarket business revenue (which includes MCI) for 2015 Q1 was $122.3 million and $105.9 million when excluding the revenue from the Chicago Transit Authority ("CTA") mid-life overhaul program. Therefore, the core aftermarket revenue in 2016 Q1 increased 7.0% when compared to the pro forma aftermarket revenue for the core business in 2015 Q1.









Consolidated Adjusted EBITDA 2016 2015 % (U.S. dollars in millions) Q1 Q1 change Transit Bus and Coach Manufacturing $ 45.4 $ 14.7 207.9% Aftermarket 22.8

16.7 36.8% Total Adjusted EBITDA $ 68.2 $ 31.4 117.0%











Adjusted EBITDA % of revenue









Transit Bus and Coach Manufacturing 10.3%

5.1% 5.2% Aftermarket 20.1%

18.6% 1.5% Total 12.3%

8.3% 4.0%

Consolidated Adjusted EBITDA for 2016 Q1 increased compared to 2015 Q1 primarily as a result of the increase in transit bus and coach manufacturing Adjusted EBITDA. Transit bus and coach manufacturing Adjusted EBITDA increased primarily as a result of increased deliveries and improved margins. Contributors to the increase in margin is a favourable sales mix, improved pricing and the positive impact from product rationalization. Profit margins can vary significantly between orders due to factors such as pricing, order size, propulsion system and product type and components specified by the customer. Management cautions readers that quarterly transit bus and coach manufacturing Adjusted EBITDA can be volatile and should be considered over a period of several quarters.

The 2016 Q1 aftermarket operations Adjusted EBITDA increased compared to 2015 Q1 as a result of Adjusted EBITDA generated from MCI's aftermarket business. As well, the Adjusted EBITDA as a percentage of aftermarket revenue during 2016 Q1 increased 1.5% when compared to 2015 Q1.









Net earnings 2016 2015 $ (U.S. dollars in millions) Q1 Q1 change Earnings from operations $ 44.0 $ 20.2

23.8 Non-cash (loss) gain

2.5

(1.9)

4.4 Interest expense

(11.5)

(4.1)

(7.4) Income tax expense

(12.4)

(3.3)

(9.1) Net earnings $ 22.6 $ 10.9

11.7













Net earnings per share (basic) $ 0.40 $ 0.20 $ 0.20

Net earnings during 2016 Q1 increased by 108.1% compared to 2015 Q1, primarily as a result of improved Earnings from Operations offset by the increase in interest and income tax expense.



Liquidity









Free Cash Flow

2016

2015 % (CAD dollars in millions)

Q1

Q1 change Free Cash Flow $ 61.5 $ 12.3 400.0% Declared dividends $ 10.4 $ 8.1 28.4%

The Company's 2016 Q1 Free Cash Flow increased compared to 2015 Q1 primarily as a result of the increased Adjusted EBITDA when comparing the two periods. The amount of dividends declared increased in 2016 Q1 primarily as a result of the previous increase in the annual dividend rate from C$0.62 to C$0.70 per share.

Effective for dividends declared after May 12, 2016, the board of directors has approved a 35.7% increase in the annual dividend rate from C$0.70 to C$0.95 per share. It is the Company's policy to pay dividends on a quarterly basis. The first quarterly dividend on the shares in the amount of C$0.2375 per share, if declared in June 2016, is expected to be paid in July 2016.

The April 3, 2016 liquidity position of $196.9 million is comprised of available cash of $39.8 million and $157.1 million available under the revolving portion of the Company's credit facility ("Revolver") as compared to a liquidity position of $173.9 million at December 27, 2015. The increased liquidity relates to improved cash flow from operations. As at April 3, 2016, there were $171.8 million of direct borrowings and $14.1 million of outstanding letters of credit related to the $343.0 million Revolver.

Outlook

The Company's annual operating plan for the 53-weeks ended January 1, 2017 ("Fiscal 2016") is focused on completing the integration of New Flyer and NABI's aftermarket businesses, defending and growing leading market position in the heavy-duty transit bus and motor coach markets and developing an integration/combination plan for operating the acquired MCI business.

Management continues to pursue cost and overhead savings as a result of its decision to focus exclusively on the Xcelsior® platform for transit buses as well as in daily operations through its Operational Excellence ("OpEx") initiatives. The Company's master production schedule combined with current backlog and orders anticipated to be awarded by customers under new procurements is expected to enable the Company to deliver new transit buses and coaches of approximately 3,450 EUs during Fiscal 2016 (53-week period) which compares to 3,265 EUs (New Flyer plus pro-forma MCI) in Fiscal 2015 (52-week period).

With respect to the integration of MCI, the Company continues to target annual synergies of approximately $10 million through the rationalization of corporate costs and deployment of New Flyer's OpEx and sourcing expertise. As of this date, the Company has achieved approximately $3.0 million of annualized cost savings. Management is taking the necessary time to evaluate and assess the various scenarios before determining the strategic action required. Once a course of action is determined, management will disclose the expected related costs associated with the estimated synergies savings.

Management maintains its guidance that the core aftermarket business (excluding CTA mid-life overhaul revenue) is expected to grow by approximately 5% in Fiscal 2016.

Conference Call

A conference call for analysts and interested listeners will be held on Friday May 13, 2016 at 8:00 a.m. (ET). The call-in number for listeners is 888-231-8191, 647-427-7450 or 403-451-9838. A live audio feed of the call will also be available at:

http://event.on24.com/r.htm?e=1184207&s=1&k=CDBDA9E4B7907EA43080753AD4A538D0

A replay of the call will be available from 11:00 a.m. (ET) on May 13, 2016 until 11:59 p.m. (ET) on May 20, 2016. To access the replay, call 855-859-2056 or 416-849-0833 and then enter pass code number 4508867. The replay will also be available on New Flyer's web site at www.newflyer.com.

Non-IFRS Measures

"Earnings from Operations" refer to earnings before interest, income taxes and unrealized foreign exchange losses or gains on non-current monetary items. "Adjusted EBITDA" consists of earnings before interest, income taxes, depreciation, amortization and other non-cash charges and certain other non-recurring charges as set out in the MD&A. "Free Cash Flow" means net cash generated by operating activities adjusted for changes in non-cash working capital items, interest paid, interest expense, income taxes paid, current income tax expense, effect of foreign currency rate on cash, past service costs, defined benefit funding, non-recurring transitional costs relating to business acquisitions, costs associated with assessing strategic and corporate initiatives, product rationalization costs, defined benefit expense, cash capital expenditures, realized ITCs, fair value adjustment to MCI's inventory and principal payments on capital leases. Management believes Earnings from Operations, Adjusted EBITDA and Free Cash Flow are useful measures in evaluating the performance of the Company. However, Earnings from Operations, Adjusted EBITDA and Free Cash Flow are not recognized earnings measures and do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and may not be comparable to similarly titled measures used by other issuers. Readers are cautioned that Earnings from Operations and Adjusted EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with IFRS as an indicator of the Company's performance, and Free Cash Flow should not be construed as an alternative to cash flows from operating, investing and financing activities determined in accordance with IFRS, as a measure of liquidity and cash flows. A reconciliation of Adjusted EBITDA and Free Cash Flow to net earnings and cash flow from operations, respectively, is provided in the MD&A.

About the Company

The Company is the largest transit bus and motor coach manufacturer and parts distributor in North America with fabrication, manufacturing, distribution and service centers in Canada and the United States and employs approximately 5,000 team members.

Through its Canadian and U.S. subsidiaries, NFI ULC and NFAI, the Company is North America's heavy-duty transit bus leader and offers a high quality transit bus product line (Xcelsior® and MiDi® models), incorporating the broadest range of drive systems available, including: clean diesel, natural gas, diesel-electric hybrid, electric-trolley and now battery-electric. New Flyer actively supports over 42,000 heavy-duty transit buses (New Flyer, NABI and Orion) currently in service.

Through its Canadian and U.S. subsidiaries, Motor Coach Industries Limited and Motor Coach Industries, Inc., the Company is North America's leader in motor coaches, A "motor coach" or "coach" is a 40-foot or 45-foot over-the-highway bus typically used for intercity transportation and longer distances than heavy-duty transit buses, and is typically characterized by (i) two axles in the rear (which allows higher speeds), (ii) high deck floor, (iii) baggage compartment under the floor, (iv) high-backed seats with a coach-style interior (often including a lavatory and underfloor baggage compartments), and (v) no room for standing passengers.

MCI offers a J-Series which is the industry's best-selling intercity coach for 11 consecutive years, and the D-Series, the industry's best-selling coach line in North American motor coach history. MCI is also the exclusive distributor of the Setra S417 and S407 in the United States and Canada. MCI actively supports over 28,000 MCI motor coaches currently in service and offers 24-hour roadside assistance 365 days a year.

The Company also operates North America's most comprehensive aftermarket parts organization providing support for all types of transit buses and motor coaches. All transit buses and coaches are supported by an industry-leading comprehensive warranty, service and support network.

The common shares and convertible unsecured subordinated debentures of the Company are traded on the Toronto Stock Exchange under the symbols NFI and NFI.DB.U, respectively.

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", "forecasts", "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, availability of funding to the Company's customers to purchase transit buses and coaches and to exercise options and to purchase parts or services at current levels or at all, aggressive competition and reduced pricing in the industry, material losses and costs may be incurred as a result of product warranty issues and product liability claims, changes in Canadian or United States tax legislation, the absence of fixed term customer contracts and the termination of contracts by customers for convenience, the current U.S federal "Buy-America" legislation, certain states' U.S. content bidding preferences and certain Canadian content purchasing policies may change and/or become more onerous, production delays may result in liquidated damages under the Company's contracts with its customers, the Company's ability to execute its planned production targets as required for current business and operational needs, 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, the covenants contained in the Company's senior credit facility and the indenture governing its Debentures could impact the ability of the Company to fund dividends and take certain other actions, interest rates could change substantially and materially impact the Company's profitability, the dependence on limited sources of supply, the timely supply of materials from suppliers, the possibility of fluctuations in the market prices of the pension plan investments and discount rates used in the actuarial calculations will impact pension expense and funding requirements, the Company's profitability and performance can be adversely affected by increases in raw material and component costs, the availability of labour could have an impact on production levels, new products must be tested and proven in operating conditions and there may be limited demand for such new products from customers, the ability of the Company to successfully execute strategic plans and maintain profitability, risks related to acquisitions, joint ventures, and other strategic relationships with third parties and the ability to successfully integrate acquired businesses and assets into the Company's existing business and to generate accretive effects to income and cash flow as a result of integrating these acquired businesses and assets. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in its press releases and 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 Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws.

SOURCE New Flyer Industries Inc.

For further information: Jon Koffman, Investor Relations, Tel: (204) 224-6672, E-mail: [email protected]