Student Transportation Third Quarter Results

Student Transportation Third Quarter Results

Highlights:


  • Revenue was US $59 million, up 20% from the same period last year

  • EBITDAR* improvement of 26% to US $13.6 million while net loss for the quarter was $0.9 million versus $0.2 million from the same period last year.

  • Subsequent to quarter end, completed several common share private placement offerings raising approximately C $60 million

Toronto, ON, May 12, 2008 – Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB, STB.UN) today reported financial results for the third quarter of fiscal year 2008, ended March 31, 2008.  All financial results are reported in U.S. dollars and compared to the same three month period last year except as otherwise noted.

Third quarter revenue was $59.1 million, up from $49.2 million and EBITDAR* rose to $13.6 million from $10.8 million. STA reported a net loss for the quarter of $0.9 million or $0.03 per common share compared to $0.01 from the same period last year.

For the quarter the Company generated cash available for distributions* of $11.8 million and paid out distributions of $5.2 million (C $5.9 million). Net cash provided by operations was $9.2 million for the quarter. As stated previously, due to the seasonality of the business, schools are not in session during the majority of STA’s first quarter, the Company views distributable cash on an annualized basis.  

“It was a good quarter for STA,” said Denis J. Gallagher, Chairman and Chief Executive Officer. “We grew revenue by 20% and improved EBITDAR by 26%, compared to the same period last year, as a result of our growth strategy of acquisitions, bids and conversions. We were especially pleased to see margin improvement this quarter considering the increases in both snow days and fuel prices in the school bus division which was helped by the increase in commodity prices in our energy division. Our management team did a good job containing expenses they can control. In addition, since the end of the quarter, we strengthened our balance sheet by substantially reducing our debt with the net proceeds of the completed C $60 million private placement offerings of our common shares.”

Revenue for the quarter was approximately $1.0 million less than anticipated due to poor weather conditions which closed schools in several of STA’s regions during the winter months. This year’s third quarter brought heavy snows from Ontario to the Mid-west and conditions slightly worse than last year in New England. The Company, however, expects a corresponding improvement on EBITDAR in the fourth quarter when snow days are added on to the end of the school year.

“Historically we recover most of the revenue lost due to bad weather although it is not certain we will recoup the full amount.” said Gallagher. “We also are pleased that outstanding safe driving performance by our drivers resulted in lower insurance costs both fixed and claims, again this year. In addition, we plan on continuing our lease program with GE Capital to extend our vehicle leasing program through fiscal year 2009 at approximately 5 percent fixed rates for some of our replacement capital expenditures. We are well positioned for a good year-end as we approach the close of another school year and continue to actively bid on new contracts and discuss a number of targeted acquisitions.”  

Reconciliation of Net Income and EBITDAR

Reconciliation of Cash Flow Provided by Operations and Cash Available for Distributions

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 website www.rideSTA.com.

Conference Call & Webcast

Management will host a conference call and live audio webcast to discuss STA’s performance for the third quarter of fiscal year 2008 at 11 a.m. (ET) on May 13, 2008. The call may be accessed at by dialling 866-838-4337 or 416-849-9305. The webcast will be subsequently archived at www.rideSTA.com. A taped rebroadcast will be available until 12 a.m. May 20, 2008 and can be accessed by dialling 416-915-1035 or 1-866-245-6755 and quoting passcode108242.

Profile

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.rideSTA.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.

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.

INVESTOR CONTACTS:    

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)

Email: kengelbert@rideSTA.com

Website: www.rideSTA.com

MEDIA CONTACT:

Lynette Viviani

973-968-7929 office

973-534-1004 mobile

lviviani@ridesta.com