Student Transportation Announces Fiscal 2009 Second Quarter and YTD Results
Barrie, ON (February 16, 2009) – Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB, STB.UN) today reported financial results for the second quarter of fiscal year 2009, ended December 31, 2008. All financial results are reported in U.S dollars, except as otherwise noted.
“We are pleased with our operating results for the quarter and the first half of our fiscal year,” said Denis J. Gallagher, Chairman and Chief Executive Officer. “With revenues up 22 percent for the first half of the fiscal year and EBITDAR up over 33 percent for the same period, our business model has proved “resistant” in the early stages of this recession. Additionally, our cash available for distributions has increased almost 80 percent from the same period last year while our total distributions paid have increased by 17 percent. While we do view cash available for distributions on an annualized basis, this is a significant year over year improvement.”
Gallagher added, “We have been affected on a non-cash basis by the weakening of the Canadian dollar and the unrealized loss of entering into a fuel hedge for the year. Last year our fuel cost spiked in the second half of the fiscal year so we are looking forward to a favourable year over year comparison in the second half of this fiscal year should market fuel prices remain in the current price range.”
Second quarter revenue increased to $62.7 million from $54.5 million and EBITDAR* improved to $13.8 million from $12.0 million from the same period last year. Revenue for the quarter was negatively impacted by approximately $2.6 million due to the change in exchange rates for the second quarter of fiscal 2009 compared to the same period last year in connection with the translation of the Company’s Canadian operations into U.S. dollars. STA’s reported net loss for the quarter totalled $9.2 million or $0.22 per common share compared to net income $0.7 million or $0.02 per common share from the same period last year. The net loss for the quarter included non-cash charges of $9.7 million in unrealized losses on derivative contracts and $4.5 million in a goodwill impairment charge. The loss on derivative contracts relates to the Company’s currency and fuel hedge contracts, while the goodwill impairment charge resulted from the recent decline in commodity prices associated with the Company’s oil and gas portfolio.
The Company’s cash available for distributions* for the quarter was $10.4 million and distributions paid amounted to $6.0 million (C $5.3 million). Net cash provided by operations was $6.0 million for the quarter.
“Our management team continues to see opportunities in the school district conversion market throughout the United States,” Gallagher added. “We have already been awarded new long term contract wins in Southern California, where we currently operate, and in Florida which will serve as a new base of operations as we grow throughout the Southeastern U.S. Both contracts have good margins and we look forward to starting work on both contracts for the next school year.”
Student Transportation’s interim financial statements, notes to financial statements and management’s discussion and analysis will be available at www.sedar.com or at the Company’s website at www.rideSTA.com.
Conference Call & Webcast
Management will host a conference call and live audio webcast to discuss STA’s performance for the second quarter of fiscal year 2009 at 11 a.m. (ET) on February 17, 2009. The call may be accessed at by dialling 1-888-205-4499 or 416-883-7132 and enter the passcode 37614#. The webcast will be subsequently archived at www.rideSTA.com. A rebroadcast will be available until 12 a.m. February 24, 2009 and can be accessed by dialling 1-877-245-4531 and enter passcode 781061#.
Founded in 1997, Student Transportation is the fourth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school bus transportation company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 5,600 school vehicles in North America. For more information, please visit www.rideSTA.com.
* Non-GAAP Measures
EBITDAR is a non-GAAP financial measure, but management believes it is useful in measuring STA’s performance. Readers are cautioned that this measure should not be construed as an alternative to net income or loss or other comparable measures determined in accordance with GAAP as an indicator of the Company’s performance or as a measure of its liquidity and cash flow. The Company’s method of calculating non-GAAP measures may differ from the methods used by other issuers and accordingly, the Company’s non-GAAP measures may not be comparable to similarly titled measures used by other issuers.
Cash available for distributions is a non-GAAP measure, and is not intended to be representative of cash flow or results of operations determined in accordance with GAAP. Investors are cautioned that cash available for distribution, as calculated by the Company, is unlikely to be comparable to similar measures used by other issuers.
Certain statements in this news release are “forward-looking statements” within the meaning of applicable securities laws, which reflect the expectations of management regarding, among other matters, STA’s revenues, expense levels, cost of capital, financial leverage, seasonality, liquidity, profitability of new businesses acquired or secured through bids, borrowing availability, ability to renew or refinance various loan facilities as they become due, ability to execute STA’s growth strategy and cash distributions, as well as their future growth, results of operations, performance and business prospects and opportunities. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions, and the negative forms thereof, suggesting future outcomes or events.
These forward-looking statements reflect STA’s current expectations regarding future events and operating performance and speak only as of the date of this news 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, including, but not limited to, the inability of STA to control its operating expenses, its significant capital expenditures, its reliance on certain key personnel, the possibility that a greater number of its employees will join unions, its acquisition strategy, its inability to achieve our business objectives, significant competition in its industry, rising insurance costs, new governmental laws and regulations, its lack of insurance coverage for certain losses, environmental requirements, seasonality of its industry, its inability to maintain letters of credit and performance bonds and the termination of certain of its contracts for reasons beyond its control. Material factors and assumptions that were relied upon in making the forward-looking statements include the number of Notes acquired pursuant to the Exchange Offer, contract and customer retention, current and future expense levels, availability of quality acquisition, bid and conversion opportunities, current borrowing availability and financial ratios, as well as current and historical results of operations and performance. Although the forward-looking statements contained in this news release are based upon what STA 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 news release and STA assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by applicable law.
Student Transportation of America Ltd.
Denis J. Gallagher
Chairman and CEO
Patrick J. Walker
Executive VP and CFO