Student Transportation Reports Second Quarter Result

Student Transportation Reports Second Quarter Results


  • Revenue for the quarter up 33% over the same period last year
  • EBITDA* for the quarter up 21% over the same period last year, margin of 21%
  • Completed new US $160 million debt refinancing which lowers cost of capital and provides up to US $100 million for future revenue and cash flow growth
  • Student Transportation of Canada subsidiary closed fifth acquisition in Ontario, located in Peterborough

Toronto, ON, February 12, 2007 – Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB.UN) today reported the financial results for its second quarter of fiscal year 2007, ended December 31, 2006. All financial results are reported in U.S. dollars, except as otherwise noted.

“We are pleased with our results for the second quarter of fiscal year 2007. We continue to have another good year that should provide us with revenue and cash flow growth consistent with prior years and our lowest pay out ratio since our IPO,” said Denis J. Gallagher, Chairman and Chief Executive Officer.

“The recent restructuring of our senior credit facilities, recognizes our stable, predictable cash flows and provides us with increased capacity for our continued growth initiatives as we plan for the new fiscal year. These new facilities provide us with lower interest rates and increased leverage capacity to create shareholder value as we increase revenues and cash flows from new business,” continued Mr. Gallagher.

During the quarter, the Company said it had expanded its Student Transportation of Canada subsidiary with a fifth acquisition, a “tuck-in”, into its existing operations in Peterborough, Ontario. “Canada continues to be a great market for us. We are reviewing a number of new opportunities in Ontario as well as other selected provinces where we see growth potential. In the U.S. where we also had good growth, we experienced some driver shortages in two start-up locations for the first half of the year which affected expected results. The shortages have now been corrected and these locations have excellent long term contracts with good customers and are certainly business we want to own,” commented Mr. Gallagher.

For the second quarter, revenue totalled $46.9 million, up from $35.3 million for the same period last year and EBITDA* rose to $9.9 million from $8.1 million in the same period in fiscal 2006.

Student Transportation’s reported net loss for the three month period ended December 31, 2006 amounted to $2.4 million or $0.12 per unit which includes $2.8 million of interest paid to Unitholders on the subordinated notes portion of the IPS units. For the quarter, the Company generated cash available for distributions* of Cdn $9.8 million and paid out distributions of Cdn $5.6 million. As stated previously, due to the seasonality of the business and schools not being in operation during the majority of the first quarter, the Company views distributable cash on an annualized basis.

STA’s interim financial statements, notes to financial statements and management’s discussion and analysis are available at or at the Company’s investor web site

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 2007 at 10 a.m. (ET) on February 13, 2007. The call may be accessed at by dialing 1-866-838-4337 or 416-849-9305. The webcast will be subsequently archived at A taped rebroadcast will be available until 12 a.m. February 20, 2007 and can be accessed by dialing 416-915-1035 or 1-866-245-6755 and quoting passcode 887636#.


STA is neither a Trust nor a Partnership and each Income Participating Security (“IPS”) Unitholder holds two separate securities consisting of one Canadian qualified common share of STA Ltd. and Cdn $3.847 principal amount of 14 per cent subordinated notes of STA ULC, a wholly-owned subsidiary of STA Ltd. The IPSs are listed on the TSX under the symbol STB.UN while the common shares and subordinated notes are listed separately under the symbols STB and STB.DB respectively.

The Issuer is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. The Issuer 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 4,000 school vehicles in North America. For more information, please visit

* 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.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws, which reflects the expectations of management regarding the Issuer’s and Company’s results of operations, expense levels, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the Company’s growth strategy and cash distributions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “track”, “targeted”, “estimate”, “anticipate”, “believe”, “should”, “could”, “plans” or “continue” or similar expressions suggesting future outcomes or events. These forward looking statements reflect the Company’s current expectations regarding anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward looking statements involve significant risks and uncertainties, and 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 which or by the performance or results will be achieved. A number of factors could cause our actual results to differ materially from the results discussed, expressed or implied in any forward-looking statement made by us or on our behalf, including, but not limited to, the factors discussed under “Risk Factors” in our Annual Information Form. These forward looking 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

David A. White
President and Chief Operating Officer
Phone (732) 280-4200
Fax: (732) 280-4213