Student Transportation announces fiscal 2009 third quarter results

    BARRIE, ON, May 13 /CNW/ - Student Transportation of America Ltd. ("STA"
or the "Company") (TSX: STB, STB.UN) today reported financial results for the
third quarter of fiscal year 2009, ended March 31, 2009. All financial results
are reported in U.S dollars, except as otherwise noted.
    "The operating results for the third quarter are in line with our
internal expectations and we continue the favourable trend witnessed in the
first half of the fiscal year," said Denis J. Gallagher, Chairman and Chief
Executive Officer. "The third quarter also reflected lower fuel expense in
connection with the company's core school bus transportation business
resulting from lower market prices experienced in the current third quarter
compared to the same quarter last fiscal year."
    "Year to date we have seen revenues increase 16.5 percent and EBITDAR
increase by 20.7 percent," said Patrick J. Walker, Executive Vice President
and Chief Financial Officer. "Our EBITDAR margin improved for the quarter to
23.2 percent over last years 22.9 percent and year to date to 18.6 percent
from 18 percent over very good results last year. This is despite the impact
on severe currency fluctuations year over year."
    "We continue to generate strong cash flow which enables us to maintain
our current dividend to our shareholders and we plan to continue our steady
growth of acquisitions, bid wins and conversions due to the favourable terms
we have secured in our credit agreements," said Gallagher. "These are exciting
times for STA and we are poised to take advantage of market opportunities as
they arise."
    Third quarter revenue increased to $64.3 million from $59.1 million and
EBITDAR(*) improved to $14.9 million from $13.6 million from the third quarter
of the prior fiscal year. School bus transportation revenue and EBITDAR
increased $6.1 million and $2.3 million, respectively, and were partially
offset by lower revenue and EBITDAR from the non-core oil and gas portfolio of
$0.9 million and $1.0 million, respectively, due to lower commodity sale
prices. STA's school bus transportation revenue for the third quarter was
negatively impacted by approximately $2.4 million due to the continued
weakening of the Canadian dollar for the third quarter of fiscal 2009 compared
to the third quarter of fiscal 2008 in connection with the translation of the
Company's Canadian operations in U.S. dollars. STA's reported net income for
the quarter improved to $0.4 million or $0.01 per common share compared to a
net loss of $0.9 million or $0.03 per common share from the same period last
    The Company's cash available for distributions(*) for the third quarter was
$11.6 million and total distributions paid were $5.9 million (C $7.3 million)
or 51 percent. Net cash provided by operations was $15.4 million for the third
quarter of fiscal 2009. As previously stated, the company views cash available
for distributions on an annualized basis.

    Reconciliation of Net Income and EBITDAR
    (in 000's of US$)

                                   Year over Year - Q3   Year over Year - YTD
                                   -------------------   --------------------
                                    Three Months Ended    Nine Months Ended
                                  --------------------- ---------------------

                                    3/31/09    3/31/08    3/31/09    3/31/08
                                  ---------- ---------- ---------- ----------

    Net income (loss)             $     362  $    (874) $ (13,812) $  (9,629)

    Add back:
      Recovery of income taxes          (55)      (491)    (6,721)    (5,895)
      Loss on extinguishment
       of debt                            -          -      1,316     10,662
      Other non operating
       (income) expense, net             89       (416)    (1,617)    (1,621)
      Unrealized loss on
       derivative contracts           2,713      3,388     14,177        888
      Non-cash stock
       compensation                      11         16      1,951      1,412
      Interest expense                2,413      3,711      8,038     10,607
      Impairment of goodwill
       (oil and gas unit)                 -          -      4,455          -
      Amortization expense              636        727      1,970      1,949
      Depreciation expense            7,652      6,954     18,556     15,197
      Operating lease expense         1,061        546      2,476      1,934
                                  ---------- ---------- ---------- ----------
    EBITDAR                       $  14,882  $  13,561  $  30,789  $  25,504
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Reconciliation of Cash Flow Provided by Operations and Cash Available for
Distributions (in 000's of US$)

                                     Three      Three      Nine       Nine
                                     Months     Months    Months      Months
                                     Ended      Ended      Ended      Ended

                                    3/31/09    3/31/08    3/31/09    3/31/08
                                  ---------- ---------- ---------- ----------

    Cash flows provided by
     operating activities         $  15,386  $  10,983  $  17,571  $  14,689

      Changes in non-cash working
       capital items                 (3,901)    (1,443)     4,754       (387)
      Changes in other assets
       and liabilities                  (51)       540        (15)       548
      Non-operating cash flows          163       (557)    (1,482)    (1,345)
      Cash interest expense           2,224      3,491      7,485     10,064
    Subtotal                         13,821     13,014     28,313     23,569

      Interest expense (other than
       noncash and IPS
       Subordinated Notes)           (1,134)    (1,970)    (3,914)    (4,719)
      Dividends on Class B-Series
       Two common shares               (128)      (227)      (439)      (255)
      Repurchase of Class
       B-Series Two common shares      (129)         -       (885)         -
      Net realized foreign
       currency gain                     12        784      1,409      1,600
      Cash taxes paid                    35         (6)      (569)       (81)
      Maintenance capital
       expenditures, net               (873)       246     (5,218)    (3,534)

    Cash Available for
     Distributions            US$ $  11,604  $  11,841  $  18,697  $  16,580

    Total Distributions
     - US$
      Interest on IPS
       Subordinated Notes     US$ $   1,105  $   1,245  $   3,364  $   4,528
      Dividends on IPS
       common shares          US$ $   1,163  $   1,286  $   3,534  $   4,684
      Dividends on common
       shares                 US$ $   3,628  $   2,666  $  11,320  $   6,501
    Total Distributions       US$ $   5,896  $   5,197  $  18,218  $  15,713

    Total Distributions      $Cdn $   7,277  $   5,927  $  21,844  $  17,904

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

    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 2009 at 11 a.m. (ET) on
May 14, 2009. The call may be accessed at by dialling 416-883-7132 or
1-888-205-4499 and enter the passcode 37614 followed by the number sign. The
webcast will be subsequently archived at A rebroadcast will
be available until 12 a.m. May 22, 2009 and can be accessed by dialling
1-877-245-4531 and enter the passcode 889970 followed by the number sign.


    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

    (*) 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), Email:, Website:

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