North American school bus contractor Student Transportation, Inc. announced a strong start to its fiscal year 2017 as its second quarter finished higher than expected.
The company reported increases across the board. Revenue for the second quarter jumped from $167.4 million in fiscal 2016 to $177.2 million this year. STI also saw net income expand to $6 million, which is a boost from $5.5 million last year.
STI Chairman and CEO Denis Gallagher said that the company continues to be pleased with the steady performance of operations for the second quarter and its year to date results, saying that “the first half of fiscal 2017 has been solid.”
“The positive momentum created by ongoing efforts to increase operational efficiencies and reduce costs will have long-term effects on our financial performance,” he added. “Through the use of new technologies and telematics, we are unlocking new key performance indicators that are highlighting areas to further reduce expenses and become even more efficient.”
Gallagher said that with the solid marginal improvements seen in the first half of fiscal 2017, he anticipates that momentum to hold throughout the remainder of the fiscal year.
He pointed to a new 10-year contract in Florida that STI won this past week, which will double the size of operations in the area with 230 new vehicles outfitted with GPS, seat belts and air conditioning.
The company said the contract should generate at least $16 million per year in revenue, Gallagher adding that “we have served this customer since 2009, and when combined with our existing contract, it will create our new largest customer. Our team is already busy getting ready for a summer startup, which will require additional staffing and facilities.”
Further, STI said it’s working to make SafeStop, a school bus tracking mobile app, a tool that “parents and school officials can’t live without” by promoting its money-saving benefits and safety features.
“We currently have over 15,000 registered users with almost 5,000 more in the queue, and are continuing to add it to our existing contracts as they come up for negotiations as well as increase new sales,” Gallagher said.
The company still has a bit of an uphill battle for the coming year, as Gallagher reported that STI continues to face “a tightening in the labor market that has created driver shortages in certain markets.”
“These shortages have impacted the entire industry,” he added. “We have stepped up our recruitment efforts and retention programs which we anticipate will have a positive impact for the balance of the year.”
Similarly, while the first half of fiscal 2017 saw STI’s year-over-year revenue increase by 7.1 percent, from $260.8 million to $279.4 million, there was a net loss for the first six months of fiscal 2017 of $5.7 million.
“We did incur winter weather-related school cancellations and additional costs for wages, fuel and snow removal,” Gallagher said, adding that the company expects to regain most of that lost revenue in the third or fourth quarters.