Student Transportation announces fiscal 2009 second quarter and YTD results



    BARRIE, ON, Feb. 16 /CNW/ - Student Transportation of America Ltd. ("STA"
or the "Company") (TSX: STB, STB.UN) today reported financial results for the
second quarter of fiscal year 2009, ended December 31, 2008. All financial
results are reported in U.S dollars, except as otherwise noted.
    "We are pleased with our operating results for the quarter and the first
half of our fiscal year," said Denis J. Gallagher, Chairman and Chief
Executive Officer. "With revenues up 22 percent for the first half of the
fiscal year and EBITDAR up over 33 percent for the same period, our business
model has proved "resistant" in the early stages of this recession.
Additionally, our cash available for distributions has increased almost 80
percent from the same period last year while our total distributions paid have
increased by 17 percent. While we do view cash available for distributions on
an annualized basis, this is a significant year over year improvement."
    Gallagher added, "We have been affected on a non-cash basis by the
weakening of the Canadian dollar and the unrealized loss of entering into a
fuel hedge for the year. Last year our fuel cost spiked in the second half of
the fiscal year so we are looking forward to a favourable year over year
comparison in the second half of this fiscal year should market fuel prices
remain in the current price range."
    Second quarter revenue increased to $62.7 million from $54.5 million and
EBITDAR(*) improved to $13.8 million from $12.0 million from the same period
last year. Revenue for the quarter was negatively impacted by approximately
$2.6 million due to the change in exchange rates for the second quarter of
fiscal 2009 compared to the same period last year in connection with the
translation of the Company's Canadian operations into U.S. dollars. STA's
reported net loss for the quarter totalled $9.2 million or $0.22 per common
share compared to net income $0.7 million or $0.02 per common share from the
same period last year. The net loss for the quarter included non-cash charges
of $9.7 million in unrealized losses on derivative contracts and $4.5 million
in a goodwill impairment charge. The loss on derivative contracts relates to
the Company's currency and fuel hedge contracts, while the goodwill impairment
charge resulted from the recent decline in commodity prices associated with
the Company's oil and gas portfolio.
    The Company's cash available for distributions(*) for the quarter was $10.4
million and distributions paid amounted to $6.0 million (C $5.3 million). Net
cash provided by operations was $6.0 million for the quarter.
    "Our management team continues to see opportunities in the school
district conversion market throughout the United States," Gallagher added. "We
have already been awarded new long term contract wins in Southern California,
where we currently operate, and in Florida which will serve as a new base of
operations as we grow throughout the Southeastern U.S. Both contracts have
good margins and we look forward to starting work on both contracts for the
next school year."

    
    Reconciliation of Net Income and EBITDAR
    (in 000's of US$)
                             Year over Year - Q2        Year over Year - YTD
                              Three Months Ended           Six Months Ended
                         --------------------------  ------------------------
                          12/31/08      12/31/07      12/31/08      12/31/07
                          --------      --------      --------      --------

    Net (loss) income  $    (9,201)  $       713   $   (15,260)  $    (8,755)

    Add back:
      (Recovery of)
       provision for
       income taxes         (3,418)          515        (7,390)       (5,404)
      Loss on
       extinguishment
       of debt                   -             -         1,316        10,662
      Other non
       operating
       (income)
       expense, net           (895)       (1,342)       (1,706)       (1,205)
      Unrealized loss
       (gain) on
       derivative
       contracts             9,660           952        13,274        (2,500)
      Non-cash stock
       compensation          1,026           327         1,940         1,396
      Interest
       expense               2,718         3,336         5,625         6,896
      Amortization
       expense                 627           632         1,334         1,222
      Depreciation
       expense               7,784         6,165        10,904         8,243
      Impairment of
       goodwill (oil
       and gas unit)         4,455             -         4,455             -
      Operating
       lease expense         1,061           744         1,415         1,388
                       ------------- ------------- ------------ -------------
    EBITDAR            $    13,815   $    12,042   $    15,905  $     11,943
                       ------------- ------------- ------------ -------------
                       ------------- ------------- ------------ -------------


    Reconciliation of Cash Flow Provided by Operations and Cash Available for
    Distributions
    (in 000's of US$)
                                   Three       Three         Six         Six
                                  Months      Months      Months      Months
                                   Ended       Ended       Ended       Ended
                                12/31/08    12/31/07    12/31/08    12/31/07
                                --------    --------    --------    --------

    Cash flows
     provided by
     operating
     activities                $   6,046   $   8,348   $   2,185  $    3,706

    Adjustments:
      Changes in
       non-cash
       working
       capital
       items                       4,897         409       8,655       1,056
      Changes in
       other
       assets and
       liabilities                     2         369          36           8
      Non-
       operating
       cash flows                   (721)       (999)     (1,645)       (788)
      Cash
       interest
       expense                     2,531       3,171       5,261       6,573
                              ----------- -----------  ---------- -----------
    Subtotal                      12,755      11,298      14,492      10,555

    Less:
      Interest
       expense
       (other than
       noncash and
       IPS
       Subordinated
       Notes)                     (1,413)     (1,608)     (2,780)     (2,749)
      Dividends on
       Class B-
       Series Two
       common
       shares                       (165)          -        (311)          -
      Repurchases
       of Class B-
       Series Two
       common
       shares                       (756)          -        (756)          -
      Net realized
       foreign
       currency
       gain                          455           -       1,397           -
      Cash taxes
       paid                         (129)         34        (567)        (75)
      Maintenance
       capital
       expenditures,
       net                          (367)         13      (4,345)     (3,780)
                              ----------- -----------  ---------- -----------
    Cash Available
     for
     Distributions       US$  $   10,380  $    9,737   $   7,130  $    3,951
                        ----- ----------- -----------  ---------- -----------
                        ----- ----------- -----------  ---------- -----------
    Total
     Distributions -
     US$
      Interest on
       IPS
       Subordinated
       Notes             US$  $    1,105  $    1,248   $   2,259  $    3,283
      Dividends on
       IPS common
       shares            US$  $    1,163  $    1,290   $   2,370  $    3,398
      Dividends on
       common
       shares            US$  $    3,772  $    2,671   $   7,692  $    3,836
                        ----- ----------- -----------  ---------- -----------
    Total
     Distributions       US$  $    6,040  $    5,209   $  12,321  $   10,517
                        ----- ----------- -----------  ---------- -----------
                        ----- ----------- -----------  ---------- -----------

    Total
     Distributions      $Cdn  $    5,303  $    5,935   $  14,568  $   11,977
                        ----- ----------- -----------  ---------- -----------
                        ----- ----------- -----------  ---------- -----------
    

    Student Transportation's interim financial statements, notes to financial
statements and management's discussion and analysis will be available at
www.sedar.com or at the Company's website at www.rideSTA.com.

    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 2009 at 11 a.m. (ET)
on February 17, 2009. The call may be accessed at by dialling 1-888-205-4499
or 416-883-7132 and enter the passcode 37614#. The webcast will be
subsequently archived at www.rideSTA.com. A rebroadcast will be available
until 12 a.m. February 24, 2009 and can be accessed by dialling 1-877-245-4531
and enter passcode 781061#.

    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 5,600 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

    Certain statements in this news release are "forward-looking statements"
within the meaning of applicable securities laws, which reflect the
expectations of management regarding, among other matters, STA's revenues,
expense levels, cost of capital, financial leverage, seasonality, liquidity,
profitability of new businesses acquired or secured through bids, borrowing
availability, ability to renew or refinance various loan facilities as they
become due, ability to execute STA's growth strategy and cash distributions,
as well as their future growth, results of operations, performance and
business prospects and opportunities. Forward-looking statements generally can
be identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or
"continue" or similar expressions, and the negative forms thereof, suggesting
future outcomes or events.
    These forward-looking statements reflect STA's current expectations
regarding future events and operating performance and speak only as of the
date of this news release. Forward-looking statements involve significant
risks and uncertainties, 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 or by which, such performance or results will
be achieved. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements,
including, but not limited to, the inability of STA to control its operating
expenses, its significant capital expenditures, its reliance on certain key
personnel, the possibility that a greater number of its employees will join
unions, its acquisition strategy, its inability to achieve our business
objectives, significant competition in its industry, rising insurance costs,
new governmental laws and regulations, its lack of insurance coverage for
certain losses, environmental requirements, seasonality of its industry, its
inability to maintain letters of credit and performance bonds and the
termination of certain of its contracts for reasons beyond its control.
Material factors and assumptions that were relied upon in making the
forward-looking statements include the number of Notes acquired pursuant to
the Exchange Offer, contract and customer retention, current and future
expense levels, availability of quality acquisition, bid and conversion
opportunities, current borrowing availability and financial ratios, as well as
current and historical results of operations and performance. Although the
forward-looking statements contained in this news release are based upon what
STA believes to be reasonable assumptions, investors cannot be assured that
actual results will be consistent with these forward-looking statements, and
the differences may be material. These forward-looking statements are made as
of the date of this news release and STA assumes no obligation to update or
revise them to reflect new events or circumstances, other than as required by
applicable law.





For further information:

For further information: 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),
kengelbert@rideSTA.com; www.rideSTA.com; Media Contact: Lynette Viviani, (973)
968-7929, (973) 534-1004 mobile, lviviani@rideSTA.com

Organization Profile

STUDENT TRANSPORTATION INC.

More on this organization

STUDENT TRANSPORTATION OF AMERICA ULC

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890