Laidlaw International, Inc. Announces Results for Second Quarter Fiscal 2007



    NAPERVILLE, ILL., April 9 /CNW/ - Laidlaw International, Inc. (NYSE:   LI):

    --  Realizes EBITDA of $116 Million

    --  Announces Quarterly Dividend of $0.17

    --  Affirms EPS and EBITDA Guidance

    --  Provides Update on Proposed Merger

    Laidlaw International, Inc. (NYSE:   LI) today announced its financial
results for the second quarter ended February 28, 2007. Consolidated revenue
for the second quarter of fiscal 2007 was $791 million, flat to prior year,
and income from continuing operations was $19 million, a decrease of $19
million, as compared to the previous year. Earnings from continuing operations
was $0.23 per common share as compared to $0.38 per common share for the prior
year. The results of the quarter include $9 million of additional interest
expense associated with debt used to fund the Company's recent share
repurchase program and an additional $6 million, or $0.07 per share, of costs
related to the previously announced merger with FirstGroup plc.

    "These results are in line with our expectations," said Kevin E. Benson,
President and Chief Executive Officer of Laidlaw International. "I am pleased
with the revenue growth we are now achieving in our school bus operations and
with the steady improvements in the performance of our transit division.
Greyhound has had a more challenging environment this year, but our new
systems and procedures have enabled us to maintain a tight control on costs.
Notwithstanding Greyhound's decreased contribution this quarter, a review of
the past few years underscores its significant improvement in performance."

    Quarter Results

    Education Services revenue grew 6%, and offset the impact of a $23
million reduction of revenue at Greyhound. Contract growth and higher rates at
Education Services, more than compensated for a $7 million reduction of
revenue due to bad weather, most of which will be recovered during the second
half of fiscal 2007. The decline in revenue at Greyhound was a result in part
of fewer ticket sales in response to its most recent price increases.
Greyhound's reduction in revenue was also impacted by severe weather during
the quarter and the high level of hurricane related travel that occurred in
same period of the previous year.

    EBITDA of $116 million was down 5% from the prior year and EBITDA margin
decreased to 14.7%. At Education Services, lower insurance costs were offset
by higher fuel costs and increases in spending associated with the development
of systems designed to lower future operating costs, resulting in lower EBITDA
margins. Greyhound's EBITDA decreased $9 million as a result of softer travel
volumes and higher insurance costs associated with a significant claim that
was incurred several years ago. Although Public Transit's revenue was nearly
flat, EBITDA and EBITDA margin improved due largely to lower insurance costs.

    EBITDA is a non-GAAP financial measure, representing operating income
plus depreciation and amortization. Schedules reconciling EBITDA to income
from continuing operations and EBITDA to cash used by operating activities are
presented as a supplement to this release.

    Key Balance Sheet Items

    As of February 28, 2007, Laidlaw had cash and cash equivalents of $93
million and debt outstanding of $769 million. Net capital expenditures for the
six month period were $176 million, as compared to $141 million in the prior
year. Laidlaw anticipates filing its Form 10-Q which includes more complete
information with the Securities Exchange Commission on April 9, 2007.

    Outlook

    With one-half of fiscal 2007 completed, the Company is updating its
revenue guidance for fiscal 2007. It now expects 2007 revenue to increase 1 to
3 percent, as compared to 2006, reflecting the softer than anticipated demand
at Greyhound and a lower than anticipated Canadian dollar exchange rate.
Previously, the Company had projected an increase in 2007 revenue by 2 to 4
percent.

    The outlook for EBITDA, earnings per share and capital expenditures is
unchanged from previously provided guidance. EBITDA for fiscal 2007 is
projected to be in the range of $470 million to $500 million. Earnings per
share from continuing operations is anticipated to be $1.35 to $1.55 per
share. Net capital expenditures for fiscal 2007 are projected to be $230
million to $260 million.

    The earnings guidance includes $6 million of merger related costs
incurred through February 28, 2007, but does not take into account transaction
costs that may be expensed in the second half of fiscal 2007. Additionally,
the capital expenditure forecast includes some amounts related to assets
needed for new contract wins; a successful bid season could necessitate upward
revisions to the guidance.

    Distributions

    During the quarter, the Board of Directors approved a quarterly dividend
of $0.17 per share of Laidlaw's common stock payable on May 7, 2007 to all
shareholders of record at the close of business on April 17, 2007.

    Merger Update

    As previously announced, on February 8, 2007 Laidlaw entered into a
merger agreement with FirstGroup plc under which FirstGroup will acquire all
of the outstanding common shares of Laidlaw for $35.25 per share in cash.
Laidlaw will hold a special meeting of stockholders on April 20, 2007 to vote
on the proposed merger with FirstGroup. FirstGroup will hold an extraordinary
general meeting of its shareholders on the same day to vote on the proposed
merger and related matters.

    On March 29, 2007, FirstGroup re-filed its notification report under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 to provide additional
time for the Department of Justice to complete its assessment of the proposed
transaction. The waiting period under the Hart-Scott-Rodino Act will expire at
11:59 pm, EDT time, on April 30, 2007, unless this period is terminated
earlier or extended.

    The Exon-Florio Notice was filed on April 2, 2007, with the Committee on
Foreign Investments at the U.S. Department of Treasury. The review period
expires on May 2, 2007.

    On March 21, 2007, First Group filed its short form pre-merger
notification with the Competition Bureau of Canada. Although the 14 day
statutory waiting period has expired, the Bureau is continuing its assessment
of the proposed transaction. First Group has also requested formal written
clearance of the transaction from the Competition Bureau, the receipt of which
is a condition to closing.

    Additionally, on April 5, 2007, the United States Surface Transportation
Board published notice in the Federal Register of its tentative grant of
authority of Laidlaw's transaction with FirstGroup. The comment period
associated with the Surface Transportation Board's notice will expire on May
21, 2007.

    Conference Call Details

    The Company will hold a conference call hosted by senior management to
discuss the financial results on Tuesday, April 10, 2007 at 10:00 a.m.
(eastern time). A web cast of the conference call will be accessible at
Laidlaw International's website www.laidlaw.com.

    
          To participate in the call, please dial:
                 877-407-0782 - (US and Canada)
                 201-689-8567 - (International)
    

    A replay will be available immediately after the conference call through
May 11, 2007. To access the replay, dial 877-660-6853 (U.S and Canada) or
201-612-7415 (International); account number: 286; conference ID: 236179.
Additionally, the web cast will be archived on the company's website.

    Certain statements contained in this press release, including statements
regarding the status of future operating results and market opportunities and
other statements that are not historical facts, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by the use of terminology
such as: believe, hope, may, anticipate, should, intend, plan, will, expect,
estimate, continue, project, positioned, strategy and similar expressions.
Such statements involve certain risks, uncertainties and assumptions that
include, but are not limited to,

    --  Risks and uncertainties related to the proposed merger with
FirstGroup, including but not limited to receiving approval from the
stockholders of both Laidlaw and FirstGroup and the required regulatory
agencies as well as other customary closing conditions;

    --  Economic and other market factors, including competitive pressures
and changes in pricing policies;

    --  The ability to implement initiatives designed to increase operating
efficiencies or improve results;

    --  Costs and risks associated with litigation and indemnification
obligations;

    --  Changes in interpretations of existing, or the adoption of new,
legislation, regulations or other laws;

    --  The potential for rising labor costs and actions taken by organized
labor unions;

    --  Continued increases in prices of fuel and potential shortages;

    --  Control of costs related to accident and other risk management
claims;

    --  Terrorism and other acts of violence;

    --  The ability to produce sufficient future taxable income to allow us
to recover our deferred tax assets;

    --  The ability to pay dividends;

    --  Potential changes in the mix of businesses we operate; and

    --  The inability to earn sufficient returns on pension plan assets thus
requiring increased funding.

    Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary materially
from those indicated. In light of these risks and uncertainties you are
cautioned not to place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or
otherwise. You are advised, however, to consult any further disclosures the
Company makes on related subjects as may be detailed in the Company's other
filings made from time to time with the Securities and Exchange Commission, in
particular the Company's Risk Factors as set forth in its most recently filed
Annual Report on Form 10-K.

    About Laidlaw International

    Laidlaw International, Inc. is a holding company for North America's
largest providers of school and inter-city bus transport services and a
leading supplier of public transit services. The company's businesses operate
under the brands: Laidlaw Education Services, Greyhound Lines, Greyhound
Canada and Laidlaw Transit. The company's shares trade on the New York Stock
Exchange (NYSE:   LI). For more information on Laidlaw International, visit the
website: www.laidlaw.com.

    
                         LAIDLAW INTERNATIONAL, INC.
                    Consolidated Statements of Operations
                  ( $ in millions except per share amounts )
                                 (unaudited)

                                   Three Months Ended   Six Months Ended
                                      February 28,        February 28,
                                   ------------------- -------------------
                                     2007      2006      2007      2006
                                   --------- --------- --------- ---------

    Revenue                          $790.9    $789.0  $1,649.0  $1,635.8

      Compensation expense            401.1     396.0     822.4     802.7
      Vehicle related costs            61.3      61.8     120.9     124.9
      Fuel expenses                    65.9      60.3     135.8     125.6
      Insurance and accident claim
       costs                           29.3      34.5      73.1      81.6
      Occupancy costs                  40.7      41.9      79.1      80.6
      Depreciation and amortization    60.9      57.1     122.9     115.7
      Other operating expenses         76.7      72.1     160.0     142.7
                                   --------- --------- --------- ---------
    Operating income (loss)            55.0      65.3     134.8     162.0
      Interest expense                (14.3)     (5.4)    (29.2)    (10.9)
      Other income (expense), net      (8.7)      2.0     (10.6)      3.8
                                   --------- --------- --------- ---------
    Income from continuing
     operations before income taxes    32.0      61.9      95.0     154.9
      Income tax expense              (13.5)    (24.1)    (36.4)    (59.1)
                                   --------- --------- --------- ---------
    Income from continuing
     operations                        18.5      37.8      58.6      95.8
      Loss from discontinued
       operations                         -      (3.8)        -      (3.5)
                                   --------- --------- --------- ---------
      Net income                      $18.5     $34.0     $58.6     $92.3
                                   --------- --------- --------- ---------

    Basic earnings (loss) per share
      Continuing operations           $0.23     $0.38     $0.73     $0.96
      Discontinued operations             -     (0.04)        -     (0.04)
                                   --------- --------- --------- ---------
    Net income                        $0.23     $0.34     $0.73     $0.92
                                   --------- --------- --------- ---------

    Diluted earnings (loss) per
     share
      Continuing operations           $0.23     $0.38     $0.73     $0.96
      Discontinued operations             -     (0.04)        -     (0.04)
                                   --------- --------- --------- ---------
    Net income                        $0.23     $0.34     $0.73     $0.92
                                   --------- --------- --------- ---------
    

    
                         LAIDLAW INTERNATIONAL, INC.
                             Operating Highlights
                              ( $ in millions )
                                 (unaudited)

                                   Three Months Ended   Six Months Ended
                                      February 28,        February 28,
                                   ------------------- -------------------
                                     2007      2006      2007      2006
                                   --------- --------- --------- ---------

    Revenue
      Education services             $444.4    $420.5    $946.1    $884.2
      Greyhound                       271.3     293.8     550.8     598.4
      Public transit                   75.2      74.7     152.1     153.2
                                   --------- --------- --------- ---------
      Consolidated                   $790.9    $789.0  $1,649.0  $1,635.8
                                   --------- --------- --------- ---------

    EBITDA
      Education services              $92.2     $91.9    $204.1    $207.3
      Greyhound                        17.2      26.3      42.8      61.2
      Public transit                    6.5       4.2      10.8       9.2
                                   --------- --------- --------- ---------
      Consolidated                    115.9     122.4    $257.7    $277.7
                                   --------- --------- --------- ---------

    EBITDA Margins
      Education services               20.7%     21.9%     21.6%     23.4%
      Greyhound                         6.3%      9.0%      7.8%     10.2%
      Public transit                    8.6%      5.6%      7.1%      6.0%
      Consolidated                     14.7%     15.5%     15.6%     17.0%

    Net Capital Expenditures                              176.2     140.8
    

    
    EBITDA is presented as a supplemental disclosure because management
     uses this measure to evaluate performance and allocate resources, and
     believes it provides useful information regarding our ability to
     service or incur debt. EBITDA is not calculated the same way by all
     companies. We define EBITDA as operating income plus depreciation and
     amortization. EBITDA is not intended to represent cash flow for the
     period, is not presented as an alternative to operating income as an
     indicator of performance, should not be considered in isolation or as
     a substitute for measures of performance prepared in accordance with
     generally accepted accounting principles (GAAP) and is not indicative
     of operating income or cash flows from operations as determined under
     GAAP.

                         LAIDLAW INTERNATIONAL, INC.
                Reconciliation of Non-GAAP Financial Measures
                              ( $ in millions )
                                 (unaudited)

    EBITDA is presented as a supplemental disclosure because management
     uses this measure to evaluate performance and allocate resources, and
     believes it provides useful information regarding our ability to
     service or incur debt. EBITDA is not calculated the same way by all
     companies. We define EBITDA as operating income plus depreciation and
     amortization. EBITDA is not intended to represent cash flow for the
     period, is not presented as an alternative to operating income as an
     indicator of performance, should not be considered in isolation or as
     a substitute for measures of performance prepared in accordance with
     generally accepted accounting principles (GAAP) and is not indicative
     of operating income or cash flows from operations as determined under
     GAAP.

    A reconciliation of EBITDA to income (loss) from continuing operations
     before cumulative effect of a change in accounting principle is
     presented below ($ in millions):
    

    
                                   Three Months Ended   Six Months Ended
                                      February 28,        February 28,
                                   ------------------- -------------------
                                       2007    2006      2007      2006
                                   --------- --------- --------- ---------
    EBITDA                           $115.9    $122.4    $257.7    $277.7

      Depreciation and amortization   (60.9)    (57.1)   (122.9)   (115.7)
      Interest expense                (14.3)     (5.4)    (29.2)    (10.9)
      Other income (expense), net      (8.7)      2.0     (10.6)      3.8
      Income tax expense              (13.5)    (24.1)    (36.4)    (59.1)
                                   --------- --------- --------- ---------
      Income from continuing
       operations                     $18.5     $37.8     $58.6     $95.8
                                   --------- --------- --------- ---------
    

    
    A reconciliation of EBITDA to cash provided by operating activities is
     presented below ($ in millions):
    

    
                                   Three Months Ended   Six Months Ended
                                      February 28,        February 28,
                                   ------------------- -------------------
                                     2007      2006      2007      2006
                                   --------- --------- --------- ---------
    EBITDA                           $115.9    $122.4    $257.7    $277.7

      Cash paid for interest          (14.7)     (5.2)    (25.1)     (8.7)
      Cash refunded (paid) for
       income taxes                    (2.4)      5.2     (10.3)      4.4
      Cash received (paid) for
       other income (expense), net     (0.8)      2.0       1.1       3.8
      Non-cash adjustments to
       EBITDA                          (1.8)      2.5      (2.5)      5.4
      Cash provided (used) by
       changes in operating assets
       and liabilities                 48.8      48.5    (124.1)   (123.1)
                                   --------- --------- --------- ---------
      Cash provided by operating
       activities                    $145.0    $175.4     $96.8    $159.5
                                   --------- --------- --------- ---------
    




For further information:

For further information: Laidlaw International, Inc. Sarah Lewensohn
Director, Investor Relations (630) 848-3120

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LAIDLAW INTERNATIONAL, INC.

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