Student Transportation Inc. Reports Fiscal 2018 Second Quarter Results
BARRIE, Ontario, Feb. 09, 2018 (GLOBE NEWSWIRE) — Student Transportation Inc. (“STI” or “Company”) (TSX:STB) (NASDAQ:STB) today announced financial results for the second quarter of fiscal year 2018 ended December 31, 2017. All financial results are reported in U.S. dollars except as otherwise noted.
Revenue for the second quarter of fiscal 2018 increased to $193.9 million from $177.2 million for the second quarter of fiscal 2017. Adjusted EBITDA* increased to $45.4 million compared to $42.9 million for the same period last year. STI reported net income for the second quarter of $22.7 million or $0.24 per common share, compared to $6.0 million, or $0.07 per common share, for the second quarter of fiscal 2017. Excluding the non-cash benefit of the new U.S. Tax Cuts and Jobs Act of 2017 legislative reform changes, net income for the second quarter of fiscal 2018 would have been $8.8 million, or $0.09 per common share.
“We are pleased with the results achieved in the first half of fiscal 2018, which will serve as a springboard moving forward,” said Patrick Vaughan, President of the School Transportation Group (STG). As many can appreciate, we have had severe weather impacts over the course of this school year. Roughly $2.5 million in revenue to-date was not booked due to weather-related issues from ice and snow storms throughout the U.S and Canada, as well as fires and ensuing mudslides in Southern California which closed schools in that area. We anticipate additional lost days in January due to weather. While we expect to make up most of the lost days, this year we will not make up all of the days and will incur some additional expenses for extra wages, fuel and snow removal which will not be recoverable. The good news is our operating efficiencies and new contracts in STG have softened the effect. The work that our team has been doing helping customers reduce costs, as well as improving safety, is continuing to grow our business and strengthening our reputation as the industry leader.
“Despite an increase of 40 percent since this time last year in crude oil prices, total fuel cost, which includes elimination of the $0.50 per gallon alternative fuel tax credits, has only risen from 5.3 to 5.6 percent. Our contract fuel mitigation strategy that we have been working on for years continues to have a positive impact in this area.”
STI’s year-over-year revenue is up 7.9 percent, to $301.3 million for the first half of fiscal 2018 from $279.4 million. Including the impacts of the 2017 tax reform, STI reported net income for the first six months of fiscal 2018 of $14.7 million, or $0.16 per common share, compared to a net loss of $5.7 million, or $0.06 loss per common share for the first six months of fiscal 2017. Adjusted EBITDA* increased 6 percent to $45.6 million from $43.1 million for the first six months of fiscal 2017.
Denis J. Gallagher, STI Chairman and CEO stated, “Last year at this time we faced a significant headwind in the form of a continued tightening in the labor market which created driver shortages in certain markets. Our recruitment efforts and retention programs, which speak to our industry leading culture, in addition to increasing driver wages, has vastly improved our position in each market. We are in an active bid and acquisition season and continue to be disciplined in that process of not only what we bid on in order to have proper staffing and provide great service should we win the contract, but we’re selective on where we bid, too. Our renewal process on many contracts is underway and has been going very well. With many bids and renewals still to come in all markets, we remain confident we will continue our steady growth.”
Thomas Kominsky, Chief Growth Officer of the Company, announced that the Managed Services Group (MSG) recently acquired a leading fleet consulting and management company that specializes in fleet advisory and outsourced management services working with local, state and federal agencies, as well as large private sector clients, and on such critical items as fleet planning, in-source and out-source decisions and logistics. “This new business, with annual revenues in excess of $5 million and growing, adds nicely to our existing fleet consulting business and brings a seasoned executive team to the Managed Services Group which will enhance further cross-selling opportunities across our entire non-asset group of companies. We continue to anticipate approximately 25 percent growth this fiscal year for MSG as the products and services we have developed are leveraged with customers. Real solutions for school districts, colleges, universities, and now municipal, state, federal and commercial fleets are being offered and utilized by the entities in the areas of transportation system management, fleet management and procurement, consulting, staffing, technology and training.”
Kominsky added, “For the third consecutive year, our industry-leading school bus tracking app, SafeStop™, more than doubled its size in terms of vehicles tracked and registered users. SafeStop, which continues to be a great lead generator for MSG has approximately 40,000 users from school district owned and operated vehicles plus a growing list of contractors using our tracking system. By utilizing our app and its data platform called SafeStop Analytics (SSA), school bus operators and district administrators can deliver vital bus information to the palm of a parent’s hand and dramatically reduce the number of phone calls schools receive. Only SSA can clearly demonstrate to school officials new ways to optimize their service thus lowering costs and allowing them to focus on improving overall safety and performance. As we continue to build our user base and develop more applications, our opportunities to engage customers in a B2C and B2B environment increases dramatically.”
The Company also announced that the Board of Directors, which reviews and approves the dividend on a quarterly basis in advance, has approved the monthly cash dividend of $0.03667 per common share for shareholders of record through the end of the fourth quarter of fiscal 2018. The dividend, paid in U.S. dollars, is Canadian Dividend Tax Qualified and is a Qualified Dividend in the U.S.
|Reconciliation of Net Income (Loss) and Adjusted EBITDA *|
|Year over Year||Year over Year|
|(Amounts in 000’s)||Three Months Ended||Six Months Ended|
|Net income (loss)||$||22,728||$||6,048||$||14,739||$||(5,668||)|
|Income tax (benefit) expense||(8,750||)||4,064||(13,529||)||(3,607||)|
|Foreign currency loss (gain)||36||128||(767||)||(14||)|
|Other (income) expense, net||(86||)||(694||)||(468||)||140|
|Non-cash gain on US$ 6.25% Convertible|
|Debentures conversion feature||–||–||–||(190||)|
|Non-cash stock compensation||821||2,479||821||5,802|
|Impairment of oil and gas assets||–||–||–||224|
|Depreciation and depletion expense||11,881||14,136||16,300||19,063|
|Operating lease expense||12,946||12,418||