Student Transportation Announces Fiscal 2009 Third Quarter Results

BARRIE, ON, May 13, 2009 (Canada NewsWire via COMTEX News Network) — Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB, STB.UN) today reported financial results for the third quarter of fiscal year 2009, ended March 31, 2009. All financial results are reported in U.S dollars, except as otherwise noted.

“The operating results for the third quarter are in line with our internal expectations and we continue the favourable trend witnessed in the first half of the fiscal year,” said Denis J. Gallagher, Chairman and Chief Executive Officer. “The third quarter also reflected lower fuel expense in connection with the company’s core school bus transportation business resulting from lower market prices experienced in the current third quarter compared to the same quarter last fiscal year.”

“Year to date we have seen revenues increase 16.5 percent and
EBITDAR increase by 20.7 percent,” said Patrick J. Walker, Executive Vice
President and Chief Financial Officer. “Our EBITDAR margin improved for the quarter to 23.2 percent over last years 22.9 percent and year to date to 18.6 percent from 18 percent over very good results last year. This is despite the impact on severe currency fluctuations year over year.”

“We continue to generate strong cash flow which enables us to maintain our current dividend to our shareholders and we plan to continue our steady growth of acquisitions, bid wins and conversions due to the favourable terms we have secured in our credit agreements,” said Gallagher. “These are exciting times for STA and we are poised to take advantage of market opportunities as they arise.”

Third quarter revenue increased to $64.3 million from $59.1 million and EBITDAR* improved to $14.9 million from $13.6 million from the third quarter of the prior fiscal year. School bus transportation
revenue and EBITDAR increased $6.1 million and $2.3 million, respectively, and were partially offset by lower revenue and EBITDAR from the non-core oil and gas portfolio of $0.9 million and $1.0 million, respectively, due to lower commodity sale prices. STA’s school bus transportation revenue for the third quarter was negatively impacted by approximately $2.4 million due to the continued weakening of the Canadian dollar for the third quarter of fiscal 2009 compared to the third quarter of fiscal 2008 in connection with the translation of the Company’s Canadian operations in U.S. dollars. STA’s reported net income for the quarter improved to $0.4 million or $0.01 per common share compared to a net loss of $0.9 million or $0.03 per common share from the same period last year.

The Company’s cash available for distributions* for the third quarter was $11.6 million and total
distributions paid were $5.9 million (C $7.3 million) or 51 percent. Net cash provided by operations was $15.4 million for the third quarter of fiscal 2009. As previously stated, the company views cash available for distributions on an annualized basis.

    Reconciliation of Net Income and EBITDAR
    (in 000's of US$)

                                   Year over Year - Q3   Year over Year - YTD
                                   -------------------   --------------------
                                    Three Months Ended    Nine Months Ended
                                  --------------------- ---------------------

                                    3/31/09    3/31/08    3/31/09    3/31/08
                                  ---------- ---------- ---------- ----------

    Net income (loss)             $     362  $    (874) $ (13,812) $  (9,629)

    Add back:
      Recovery of income taxes          (55)      (491)    (6,721)    (5,895)
      Loss on extinguishment
       of debt                            -          -      1,316     10,662
      Other non operating
       (income) expense, net             89       (416)    (1,617)    (1,621)
      Unrealized loss on
       derivative contracts           2,713      3,388     14,177        888
      Non-cash stock
       compensation                      11         16      1,951      1,412
      Interest expense                2,413      3,711      8,038     10,607
      Impairment of goodwill
       (oil and gas unit)                 -          -      4,455          -
      Amortization expense              636        727      1,970      1,949
      Depreciation expense            7,652      6,954     18,556     15,197
      Operating lease expense         1,061        546      2,476      1,934
                                  ---------- ---------- ---------- ----------
    EBITDAR                       $  14,882  $  13,561  $  30,789  $  25,504
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Reconciliation of Cash Flow Provided by Operations and Cash Available for
Distributions (in 000's of US$)

                                     Three      Three      Nine       Nine
                                     Months     Months    Months      Months
                                     Ended      Ended      Ended      Ended

                                    3/31/09    3/31/08    3/31/09    3/31/08
                                  ---------- ---------- ---------- ----------

    Cash flows provided by
     operating activities         $  15,386  $  10,983  $  17,571  $  14,689

      Changes in non-cash working
       capital items                 (3,901)    (1,443)     4,754       (387)
      Changes in other assets
       and liabilities                  (51)       540        (15)       548
      Non-operating cash flows          163       (557)    (1,482)    (1,345)
      Cash interest expense           2,224      3,491      7,485     10,064
    Subtotal                         13,821     13,014     28,313     23,569

      Interest expense (other than
       noncash and IPS
       Subordinated Notes)           (1,134)    (1,970)    (3,914)    (4,719)
      Dividends on Class B-Series
       Two common shares               (128)      (227)      (439)      (255)
      Repurchase of Class
       B-Series Two common shares      (129)         -       (885)         -
      Net realized foreign
       currency gain                     12        784      1,409      1,600
      Cash taxes paid                    35         (6)      (569)       (81)
      Maintenance capital
       expenditures, net               (873)       246     (5,218)    (3,534)

    Cash Available for
     Distributions            US$ $  11,604  $  11,841  $  18,697  $  16,580

    Total Distributions
     - US$
      Interest on IPS
       Subordinated Notes     US$ $   1,105  $   1,245  $   3,364  $   4,528
      Dividends on IPS
       common shares          US$ $   1,163  $   1,286  $   3,534  $   4,684
      Dividends on common
       shares                 US$ $   3,628  $   2,666  $  11,320  $   6,501
    Total Distributions       US$ $   5,896  $   5,197  $  18,218  $  15,713

    Total Distributions      $Cdn $   7,277  $   5,927  $  21,844  $  17,904

Student Transportation’s interim financial statements, notes to financial statements and management’s discussion and analysis will be available at or at the Company’s website at

Conference Call & Webcast

Management will host a conference call and live audio webcast to discuss STA’s performance for the third quarter of fiscal year 2009 at 11 a.m. (ET) on May 14, 2009. The call may be accessed at by dialling 416-883-7132 or 1-888-205-4499 and enter the passcode 37614 followed by the number sign. The webcast will be subsequently archived at A rebroadcast will be available until 12 a.m. May 22, 2009 and can be accessed by dialling 1-877-245-4531 and enter
the passcode 889970 followed by the number sign.


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

* 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.

Forward-Looking Statements

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.

SOURCE: Student Transportation of America Ltd.

SOURCE: Student Transportation of America ULC

INVESTOR CONTACTS: Student Transportation of America Ltd., Denis J. Gallagher,
Chairman and CEO, (732) 280-4200; Patrick J. Walker, Executive VP and CFO, (732)
280-4200; Keith P. Engelbert, Director of Investor Relations, (732) 280-4200, (732)
280-4213 (FAX), Email:, Website:

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