Student Transportation Reports First Quarter Results
- Revenue for the quarter was US $19.8 million, up 15.1 per cent from same period last year
- EBITDA* flat for first quarter despite initial public company expenses and higher fuel cost environment
Toronto, ON, November 14, 2005 – Student Transportation of America Ltd. (TSX: STB.UN) (STA) today reported the financial results for its first quarter of fiscal year 2006, ended September 30, 2005. All financial results are reported in U.S. dollars, except as otherwise noted.
“Our performance for the first quarter met internal expectations. EBITDA was basically flat compared to the first quarter of last year, when we were a private company,” said Denis J. Gallagher, Chairman and Chief Executive Officer. “The first quarter of fiscal year 2006 includes costs associated with being a public company, and higher fuel costs resulting from the increases in fuel prices that began in the second half of fiscal year 2005. The first quarter also reflects the seasonality of the school bus industry, both from a revenue and cash flow perspective. It is important to note that our first quarter includes the summer season break, when most schools are not in session, and also includes the time period when we purchase a majority of our replacement capital expenditures. It is typical to have negative cash flow in the school transportation industry during the months of July, August and September.”
For the first quarter, revenue totalled $19.8 million, up 15.1 per cent from the same period last year. The increase in revenue was driven primarily by contributions from recent acquisitions and new bid and revenue contracts awarded for fiscal year 2006.
EBITDA* for the first quarter was $568,000 compared to $590,000 for the same period in 2005. As expected, during the first quarter the Company experienced an increase in fuel costs compared to the same period last year. The effect of higher market fuel prices on the Company’s results was partially mitigated due to approximately 40 per cent of revenue contracts including some form of fuel protection against price increases, ranging from fuel adjustment clauses and reimbursements to outright purchase of fuel by school districts. The Company continues to work with its customers to increase the level of fuel protection. In addition, the Company incurred costs and expenses associated with being a public company that were not present in the first quarter of the previous fiscal year as a private company.
“While the impact of higher fuel costs continued in the first quarter of fiscal 2006, we have had good success in our efforts to work with customers to minimize the impact of such costs,” Mr. Gallagher stated. “As the higher fuel cost environment we are in now started subsequent to the first quarter of the last fiscal year, and understanding the increase in expenses resulting from the transition from a private to public company, we believe most investors have already factored both of these issues into their expectations for the first quarter of fiscal 2006.”
STA posted a net loss of $1.4 million in the first quarter of fiscal 2006, representing a net loss of $0.11 per unit for the quarter. Net loss amounted to $4.0 million for the first quarter of last year as a private company. The Company historically generates negative cash in this quarter reflecting the seasonality of the business during the summer season break combined with a majority of replacement capital expenditures occurring in the first quarter of the fiscal year. The subsequent quarters of the fiscal year generate excess cash, as schools are in session and due to the fact that the majority of replacement capital expenditures have already been purchased. Due to this seasonality, the Company views available cash flow on an annualized basis.
STA’s interim financial statements, notes to financial statements and management’s discussion and analysis are available at www.sedar.com or at the Company’s investor web site www.sta-ips.com.
Conference Call & Webcast
Management will host a conference call and live audio webcast to discuss STA’s performance for the first quarter fiscal year 2006 at 2:00 p.m. (ET) on November 16, 2005. The call may be accessed at: 1-800-814-4890 or 416-644-3414. There will also be a webcast and subsequently archived at www.sta-ips.com. A taped rebroadcast will be available until November 23, 2005 at midnight. To access the rebroadcast, please dial 416-640-1917 or 1-877-289-8525 and quote the passcode 21161485#.
Annual General Meeting
STA will hold its annual general meeting of shareholders on December 8, 2005 at 10 a.m. (ET) in The Gallery of the Toronto Stock Exchange Broadcast & Conference Centre, The Exchange Tower at 130 King Street West in Toronto.
STA is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. STA 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 3,300 school vehicles in North America. For more information, please visit www.sta-ips.com
* Non-GAAP Measures
EBITDA 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.
This news release contains “forward-looking statements” within the meaning of applicable securities laws. These statements concern anticipated future events, results, circumstances, performance or expectations that are not historical facts. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking statement made by us or on our behalf. These statements are made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For more information contact:
Denis J. Gallagher
Chairman and Chief Executive Officer
Phone: (732) 280-4200
Fax: (732) 280-4213
Patrick J. Walker
Chief Financial Officer
Phone (732) 280-4200
Fax: (732) 280-4213
Keith P. Engelbert
Director of Investor Relations
Phone: (732) 280-4200
Fax: (732) 280-4213