Lower fuel prices, new contract wins and closed acquisitions contribute to 28 percent increase in EBITDAR
BARRIE, ON, May 13 /CNW/ - Student Transportation Inc. (the "Company") (TSX: STB) today reported significantly improved financial results for the third quarter of fiscal year 2010, ended March 31 over the same period last year. All financial results are reported in U.S dollars, except as otherwise noted.
"The operating results for the third quarter of fiscal 2010 increase the year over year momentum built in the first half of the fiscal year," said Denis J. Gallagher, Chairman and Chief Executive Officer. "Revenues and EBITDAR increased 21 percent and 28 percent, respectively, with net income for the third quarter coming in at a multiple of ten times the net income recorded for the prior year third quarter. Growth secured for fiscal 2010 and lower fuel cost drove the increase while gains on derivative contracts contributed to the increase in net income for the third quarter," Gallagher added.
Third quarter revenue increased to $77.7 million from $64.2 million and EBITDAR* improved to $19.1 million from $14.9 million for the comparable period last year. Net income for the third quarter of fiscal year 2010 increased to $4.1 million or $0.07 net income per common share compared to the net income of $0.4 million or $0.01 net income per common share for the third quarter of fiscal 2009.
"Our year to date results for the first nine months of fiscal 2010 is certainly in line with our internal expectations and ahead of last year," said Gallagher. "While we did experience some revenue deferrals from fewer school calendar days in the current fiscal year through March 31st due to a later start of the school year in the current year and a few weather related days, we expect to recover a majority of those revenues and anticipate a strong fourth quarter finish to the 2010 fiscal year. The two acquisitions completed in the quarter, Wilkerson and Mid-City, as well as the Regional School District 17 conversion in Connecticut, will contribute additional revenues and cash flows to the positive momentum already reflected in the year to date results. This new conversion and the acquisitions are already integrated into our regional structure adding density to our operations in those areas."
The Company closed the two acquisitions near the end of the third quarter. On March 17, 2010, the Company purchased Wilkerson Transportation Company, Inc., located in Morristown, New Jersey, and on March 31, 2010, the Company purchased Mid-City Transit Corp., located in Middletown, New York. Subsequent to the quarter end, on April 9, 2010, the Company secured a five year conversion contract for transportation services for Connecticut's Regional School District 17, as the district converted to private contracting for its transportation services and selected Student Transportation of America ("STA") as its student transportation service provider. The district was a recipient of funds from the STA Education Stimulus Plan. Combined, this conversion and the two acquisitions are expected to contribute $12.7 million in revenues on an annual basis.
"As we close out the 2010 fiscal year, we are still reviewing various bid opportunities and a few targeted acquisitions, as well as following up on inquires from several school districts in regards to our Education Stimulus Plan," Gallagher concluded. "We continue to strongly believe the budgetary issues school districts face in the current economic environment will lead many of the 10,000 school districts who still own and operate their own fleets to finally consider outsourcing their transportation services. It really is about knowing what business you're in."
Reconciliation of Net Income and EBITDAR
Year over Year - Q3 Year over Year - YTD
(Amounts in 000's) Three Months Ended Nine Months Ended
3/31/10 3/31/09 3/31/10 3/31/09
------- ------- ------- -------
Net income (loss) $ 4,127 $ 362 $ 2,436 $(13,812)
Provision for (recovery of)
income taxes 2,629 (55) 1,584 (6,721)
Loss on extinguishment of debt - - 3,680 1,316
Other loss (income), net 321 89 711 (1,617)
Unrealized (gain) loss on
derivative contracts (1,282) 2,713 (6,704) 14,177
Non-cash stock compensation - 11 780 1,951
Interest expense 2,347 2,413 7,861 8,038
Amortization expense 704 636 2,077 1,970
Depreciation and depletion
expense 8,658 7,652 20,646 18,556
Impairment of goodwill (oil
and gas unit) - - - 4,455
Operating lease expense 1,608 1,061 3,752 2,476
EBITDAR $ 19,112 $ 14,882 $ 36,823 $ 30,789
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 & Live Webcast
Management will host a conference call and live audio webcast to discuss Student Transportation's results for the third quarter of fiscal year 2010 at 11 a.m. (ET) on May 14, 2010. The call may be accessed by dialing 1-877-353-9586 (Canada & USA) or 403-532-8075 (International) and enter the passcode 47507 followed by the number sign. To access the rebroadcast, please visit www.rideSTA.com for the webcast or dial 1-877-245-4531 (Canada & USA) or dial 403-205-4531 (International) and enter passcode 256015 followed by the number sign.
Founded in 1997, Student Transportation Inc. is North America's third-largest and fastest-growing provider of school bus transportation services, operating more than 6,300 vehicles. Student Transportation's family of local companies delivers safe, reliable and cost-effective transportation solutions to school districts throughout the U.S. and Canada. Services are delivered by drivers, dispatchers, maintenance technicians, terminal managers and others who are caring members of their local communities. 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 STI'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.
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, Student Transportation'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 Student Transportation'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 Student Transportation'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 Student Transportation 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 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 Student Transportation 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 Student Transportation assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by applicable law.
SOURCE STUDENT TRANSPORTATION INC.
For further information: For further information: INVESTOR CONTACTS: Student Transportation Inc., Denis J. Gallagher, Chairman and CEO; Patrick J. Walker, Executive VP and CFO; Keith P. Engelbert, Director of Investor Relations, (732) 280-4200, (732) 280-4213 (FAX), Email: ir@rideSTA.com, Website: www.rideSTA.com