Student Transportation Inc. (STB)
F2Q13 Earnings Call
February 12, 2013 9:30 am ET
Keith P. Engelbert – Investor Relations
Denis J. Gallagher – Founder, Chairman and Chief Executive Officer
Patrick J. Walker – Executive Vice President and Chief Financial Officer
Mark Neville – Scotiabank
Greg R. Colman – National Bank Financial
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I’d now like to turn the conference over to your host for today, Mr. Keith Engelbert, Director of Investor Relations. Sir, you may begin.
Keith P. Engelbert
Hi, good morning. Thank you, Ben, and thank you for joining us to discuss our second quarter fiscal 2013 results which ended December 30, 2012. Joining me today on the call are Denis Gallagher, Chief Executive Officer and Pat Walker, Executive Vice President and Chief Financial Officer.
Yesterday, the earnings release, MD&A and financials were disseminated. The release, MD&A and financials are accessible on SEDAR, EDGAR and our website at ridestbus.com. In addition to our standard disclaimer about forward-looking statements, please also note that all figures are in U.S. dollars unless otherwise specified. I will also remind you that this conference call is being webcast live.
With that, I’ll turn the call over to Denis Gallagher.
Denis J. Gallagher
Thank you, Keith. Good morning everyone and thanks for joining us again. I’m pleased to report that our operating results for the second quarter of fiscal 2013 improved over the same quarter last year and were in line with our internal expectations, despite some effects of Superstorm Sandy.
The improvements reflect the continued momentum of growth secured in the fiscal year 2012, a disciplined focus on the cost controls we have put in place over the past year, and the continued ability of our operations team to run our fleet safely and efficiently no matter what Mother Nature throws at us. I’ll talk about those cost controls and the impact of Hurricane Sandy on our northeastern operations a little later.
I would also note that the Board of Directors as part of a normal course mode approved the expansion of the dividend payment through the end of the fiscal year which has been a hallmark of our success. In that period, the company will have paid its 100th consecutive monthly dividend since are going public in December of 2004.
As I have stated in previous calls, we entered into the new fiscal year anticipating an approximate 15% increase in annualized revenues for fiscal 2013. That increase which is well within our historic range is the result of year-over-year impact of some of the acquisitions we completed in fiscal 2012 and new contract wins that commence in the current fiscal year. Calculating our year-end revenues is as simple as taking last years revenues and adding 15%.
Since we last spoke to you, we have successfully integrated our new operations and secured many new contract renewals with terms for increased visibility of our revenues and in some cases extending the life of the vehicles in the contract. Pat Walker, our CFO, will review our complete financial results for the second quarter of 2013 in detail in a few minutes, but first let me just give you some of the highlights.
Revenue for the quarter of fiscal 2013 increased 18% to $119.4 million from a $101.1 million. Adjusted EBITDA was up 20% over the same period last year despite $2 million in deferred contracted revenue due to weather-related school closings. Net income for the quarter was $3 million compared to $1.3 million for the second quarter of fiscal 2012, which was a nice improvement year-over-year.
The school closings in the quarter were primarily due to the effects of Hurricane Sandy in late October and early November. As in past years, we will recoup those revenues during the third and fourth quarters as schools adjust their calendars to make up for the lost days giving us the strong finish to the 2013 fiscal year.
Speaking of Superstorm Sandy, let me just take a minute to share how proud I am of the members of our STI family who rose to meet the challenge of this historic storm in so many ways. Our regional operations teams which have emergency plans ready in the queue, acted as planned to move our assets to higher ground at apartment way. They had emergency generators in place and a communication system that was just remarkable. Now one vehicle was damaged, and we in fact were up and running to assist our communities and first responders with transportation for evacuees.
The greatest thrill in this bad situation was watching our local teams across the country reach out the fellow employees in New Jersey and Connecticut, some of whom lost homes and automobiles as they were swept away. Our employees stood together as a family offering not only emotional support, but voluntarily collecting and transporting many bus loads of much-needed basic supplies to their co-workers. It’s another example of the family culture that makes our company special and distinguishes us and our communities.
I can’t tell you enough how important this culture is to our success. I encourage you to visit our website and see one of the short videos they put together for this effort. Employees across the company are also pulling together to help us reduce cost. As you can see, we were able to reduce our fuel expense, despite fuel prices that are higher than this time last year.