Student Transportation Second Quarter Results

Student Transportation Second Quarter Results

Increased Revenue, Cash Flow, Earnings and Margin
“Kids have to go to school”

Highlights:



  • Revenue was $54.5 million, up 16.2% from the same period last year

  • Net income of $0.7 million for the second quarter compared to a net loss of $2.4 million from the same period last year

  • EBITDAR* and Cash Available for Distributions* for the quarter increased 18.5% and 18%, respectively, from the same period last year

  • EBITDAR* margin improvement of 50 basis points from the same period last year

  • Subsequent to quarter end, Student Transportation Canada subsidiary completed acquisition of Canadex Resources Limited – the seventh acquisition in Ontario

TORONTO (February 13, 2008) Student Transportation of America Ltd. (TSX: STB, STB.UN) (“STA”) today reported financial results for the second quarter of fiscal 2008 ended December 31, 2007.  All financial results are reported in U.S. dollars and compared to the same three month period last year except as otherwise noted.

     

Second quarter revenue was $54.5 million, up 16.2 per cent from $46.9 million.  Net income for the quarter was $0.7 million, or $0.02 per common share, compared to a net loss of $2.4 million or a $0.12 net loss per common share.

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EBITDAR* for the second quarter increased to $12.0 million from $10.2 million for the prior year second quarter and cash available for distributions* increased to $9.7 million from $8.3 million.  The Company paid out C$5.9 million in distributions during the quarter.  Net cash provided by operations was $8.5 million for the quarter compared to $3.2 million in fiscal 2007.  

“The bottom line is, kids have to go to school.  Our recession-resistant business model demonstrates the stability and consistency of our revenue and cash flow,” said Denis J. Gallagher, Chairman and Chief Executive Officer. “Year-over-year improvement in our second quarter operating results reflects the gains in strategic growth areas we achieved during our 2007 fiscal year.”

Subsequent to quarter end, on January 18, 2008, the Company completed its offer for Canadex Resources Limited (“Canadex”), one of the largest independent school bus operators in Ontario. “This strategic acquisition is STA’s largest investment in Ontario and will significantly increase our Canadian cash flows at a time when the Canadian dollar is near par with the US,” Gallagher said. “The increase in Canadian dollar cash flows acts as a natural hedge in connection with our monthly distributions.”

Reconciliation of Net Income and EBITDAR

Student Transportation’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 website at www.sta-ips.com.

Conference Call & Webcast

Management will host a conference call and live audio webcast to discuss Student Transportation’s performance for the second quarter ended December 31, 2007 at 11 a.m. ET on February 14, 2008.  The call can be accessed by dialing 416-849-9305 or 1-866-838-4337. The audio webcast will be archived at www.sta-ips.com. A taped rebroadcast will be available until 12 a.m. ET on February 21, 2008.  To access the rebroadcast, please dial 416-915-1035 or 1-866-245-6755 and enter the passcode 586601#.

About Student Transportation

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 5,000 school vehicles in North America. For more information, please visit www.sta-ips.com.

* 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. EBITDAR represents earnings before interest, taxes, depreciation, amortization, operating lease expense, severance expense and non cash items such as unrealized gain / loss on foreign currency exchange contracts, non cash stock compensation expense, and other income / loss.

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 STA’s results of operations, expense levels, cost of capital, financial leverage, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the STA’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”, “plans” or “continue” or similar expressions suggesting future outcomes or events.  These forward looking statements reflect STA’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 acquisition of less than a significant number of notes under the Exchange Offer and 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.

INVESTOR CONTACTS:    

Student Transportation of America Ltd.

Denis J. Gallagher

Chairman and Chief Executive Officer

(732) 280-4200

(732) 280-4213 (FAX)

Patrick J. Walker

Executive Vice President and Chief Financial Officer

(732) 280-4200

(732) 280-4213 (FAX)

Keith P. Engelbert

Director of Investor Relations

(732) 280-4200

(732) 280-4213 (FAX)

Email: kengelbert@sta-ips.com

Website: www.sta-ips.com