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Student Transportation (STB)
Q4 2013 Earnings Call
September 17, 2013 11:00 am ET
Keith P. Engelbert - Director of Investor Relations
Previous Statements by STB
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Patrick J. Walker - Chief Financial Officer and Executive Vice President
Mark Neville - Scotiabank Global Banking and Markets, Research Division
Theoni Pilarinos - Raymond James Ltd., Research Division
Good day, ladies and gentlemen, and welcome to Student Transportation Inc.'s Fourth Quarter Fiscal 2013 Results Conference Call and Webcast. [Operator Instructions]
I would like introduce your host for today, Mr. Keith Engelbert, Director of Investor Relations. Sir, please go ahead.
Keith P. Engelbert
All right, thank you, Karen. Good morning, everyone, and thank you for joining us to discuss the fourth quarter and our full fiscal 2013 results, which ended June 30, 2013. 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 www.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. Go ahead, Denis.
Denis J. Gallagher
Thank you, Keith. Good morning, everyone, and thanks again for joining us. I'm pleased to tell you that we finished out the fourth quarter and the year-end fiscal 2013 on a very strong note.
I'll start by touching briefly on the fourth quarter results and then share some of the highlights of the full year before turning it over to our CFO, Pat Walker, to review our complete fiscal 2013 financial results. And then I'll return after Pat's remarks to wrap up with a look at what's ahead for 2014.
First, as expected and as historically we have proven, we recovered the revenue deferrals from weather-related lost days that had occurred in the second and third quarters. This year, that amounted to approximately $5 million. We got that back plus a bit more in our charter and extracurricular revenues despite a terrible weather year.
As you know, the contracted revenue we have allows us to predict the total number of days we will operate. However, we can't predict severe weather or when it will occur. Between Hurricane Sandy, a string of winter storms and a rainy spring, that was especially true this past year. While we do wish schools were year-round and encourage governments to think in that direction, we provide contracted services for about 180 school days.
As a result, we ended the fourth quarter and fiscal 2013 in line with our forecast and our expectations. We reported fourth quarter revenues of $122 million, which is an 18% year-over-year increase. Adjusted EBITDA was a record $30.4 million for the quarter. Revenue for the full year fiscal '13 increased 15% over fiscal 2012, which was exactly in line with the growth that we anticipated and stated at the start of the fiscal year. We also improved our margins a bit. Our adjusted EBITDA for fiscal '13 improved to 19.2% compared to 19% last year and an improvement nonetheless over the same period.
Just to note, also included in the quarter was an expense of almost $500,000 preparing for our new largest contract in Omaha. We had to hire, train, retrain over 550 new employees; set up 3 locations for service; get our buses delivered; set up and install cameras, GPS units, computerized routing; and set up the offices; get the staff. So all good things that we were able to get done so that we could start the contract in August, but obviously not in our plan for fiscal 2013.
The government driven low-cost debt policy in the environment continued in 2013. And quite frankly, we took advantage of it to lower our senior debt and our total debt covenant ratios through leasing.
Our fuel expense as a percentage was lower; SG&A was lower; interest expense, lower; senior and total debt covenants, all lower year-over-year.
In anticipation of perhaps some interest rates possibly moving upward, we decided on June 30 to enter into a new financial hedge on the base rate of the floating portion of our senior credit facility, securing $50 million that was floating now at favorable rates of 2.7% going out for 4 years.
Net income for fiscal 2013 was $3.9 million or $0.05 a share.
Now you may recall last year, we closed a very positive deal in regards to the Petermann assets, was we called it, in May or June right before the year-end and we acquired a fleet and contracts valued far in excess of what we paid for them and we had to take a $7 million bonus adjustment or a writeup in the value of the equipment and mark it to the present value. Now we don't get that chance to do those kind of deals all the time. So that was kind of a one-time deal.
Cash dividends paid to shareholders totaled $34.6 million or CAD 0.56 per share during fiscal 2013. Yesterday, as maybe some of you have noted, we paid our 104th consecutive monthly dividend, and the board last week approved the payment of dividends, as it has done historically, through the next quarter.