Student Transportation Announces Fiscal 2009 Year End Results

Student Transportation Announces Fiscal 2009 Year End Results

Barrie, ON (September 28, 2009) – Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB) today reported financial results for the fiscal year ended June 30, 2009. All financial results are reported in U.S. dollars except as otherwise noted.

Revenue increased 11.1 percent year over year to $228 million for fiscal 2009 compared to $205.2 million. EBITDAR* for the fiscal year rose 11.3 percent to $44.7 million, resulting in a consistent 19.6 percent margin compared to $40.1 million or 19.6 percent margin for fiscal year 2008.

“We are extremely pleased with our operating performance and financial results for fiscal 2009 considering a very tough economy this past year. STA has not only weathered the economic storm of the past year but has sustained the steady, consistent growth in revenues and EBITDAR that have set our company apart from others since our inception 13 years ago,” said Denis J. Gallagher, STA Chairman and Chief Executive Officer. “Our margins remained consistent year over year and we had our lowest ever payout ratio of 72.5 percent, despite the negative impact of currency fluctuations on the translation of the Company’s Canadian operations year over year. We saw fuel prices come down in the second half of the year and we have secured fixed priced vendor contracts for the 2010 fiscal year that provide for lower average prices and are less volatile than the financial fuel hedges utilized in fiscal 2009.”

School bus transportation revenue and EBITDAR for fiscal 2009 increased $21.7 million and $4.1 million, respectively, while revenue and EBITDAR from the non-core oil and gas portfolio increased $1.1 million and $0.5 million, respectively. STA’s school bus transportation revenue and EBITDAR for the 2009 fiscal year were negatively impacted by approximately $7.1 million and $2.6 million, respectively, due to the weakening of the Canadian dollar during fiscal 2009 compared to fiscal 2008 in connection with the translation of the Company’s Canadian operations in U.S. dollars. The non-core oil and gas portfolio results reflect lower world wide commodity sale prices experienced during fiscal 2009 compared to fiscal 2008.

The Company previously reported that it has fuel mitigation features in approximately 60 percent of its school customer contracts reflecting some form of protection against fuel price increases. For fiscal 2009, the Company entered into financial fuel hedge contracts to cover an additional 20 percent of its fuel exposure at the beginning of the fiscal year. As a result of declining fuel prices during the year, fuel costs declined $2.5 million on a same terminal basis despite the payment of $3.0 million on the financial fuel hedge contracts for fiscal 2009. In connection with the decline in market fuel prices during fiscal 2009, the Company entered into fixed price fuel contracts with vendors most recently in July and August to cover the 20 percent of its school bus transportation fuel exposure for the 2010 fiscal year, locking in fuel prices at lower levels for fiscal 2010 compared to fiscal 2009.

The Company generated cash available for distributions* of $33.4 million (Cdn $40.2 million) for the fiscal year ended June 30, 2009. Distributions paid during the fiscal year totalled $24.2 million (C$ 29.1 million). Net cash provided by operations was $35.5 million for the fiscal year ended June 30, 2009. As previously stated, the company views cash available for distributions on an annualized basis.

Net loss for fiscal year 2009 amounted to $6.8 million down from $7.0 million for fiscal year 2008. The net loss for fiscal 2009 resulted primarily from several non cash charges including $7.7 million in unrealized loss on derivative contracts, $4.5 million in goodwill impairment on the oil and gas unit and a $1.3 million loss on the subordinated note redemption in connection with the exchange offer completed in the first quarter, partially offset by $4.3 million in realized gains resulting from the monetization of foreign currency contracts.

“Our ongoing regional growth plan was highlighted in fiscal 2009 by one key acquisition, which opened up a new territory in south-western Ontario, and five bids wins, two of which were nice tuck-ins to existing locations. While these strategic moves helped fuel our rise to the number three spot among the largest school bus companies in North America in 2009, retaining customers is equally important in a growth organization like ours. We have formed excellent relationships with our customers and our contract renewal rate remains at 95 percent over the life of our company,” Gallagher said.

“This past year has been an exciting one for STA and the coming fiscal year promises to be even more successful. We have favourable credit agreements in place to take advantage of market opportunities and already have announced the acquisition of Jordon Transportation, our first of the new fiscal year. We have secured six new bid wins in the U.S. and were awarded additional routes in Canada for fiscal 2010. The bid wins for fiscal 2010 include two of our largest and most successful start-ups in Duval County, Fla., and Los Angeles, Ca., and two important conversions of district-run fleets. We already have booked a total of 15.6 percent growth in school transportation revenue for fiscal 2010 and the year has just begun. Our drivers, staff and experienced management team continue to find new ways to create value for our customers while providing a high level of safe and reliable service which will continue to lead to new business.”

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 fiscal year 2009 at 11 a.m. (ET) on September 29, 2009. The call may be accessed at by dialling 416-883-7132 or 1-888-205-4499 and enter the passcode 37614#. The live audio webcast and archive will be available at A rebroadcast will be available until 12 a.m. October 7, 2009 and can be accessed by dialling 1-877-245-4531 and enter the passcode 967480#.


Founded in 1997, Student Transportation of America (STA) is North America’s third-largest and fastest-growing provider of school bus transportation services, operating more than 6,300 vehicles. STA’s family of local companies delivers safe, reliable and cost-effective transportation solutions to school districts throughout the U.S. and Canada. Services are delivered by drivers, dispatchers, maintenance technicians, terminal managers and others who are caring members of their local communities. 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 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

(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)