School bus contractor Student Transportation, Inc. reported that lower fuel prices and continued low-interest rates helped its stock exceed fourth-quarter forecasts by $0.02, with fiscal-year 2016 earnings up more than 8 percent.
The company posted total revenue of $600.2 million for the fiscal year, which closed on June 30, up from $554.8 million for FY 2015. The company also posted $166.2 million in revenue for the fourth quarter, up nearly $14 million, or nearly 6.9 percent. The net income of $6 million equates to $0.06 per share, up from $3.6 million and $0.04 per share last year.
“We were very pleased with our strong performance and solid results in fiscal 2016, which were in line with our internal objectives and we are well-positioned for continued improvements in fiscal 2017,” said Denis J. Gallagher, STI chairman and CEO, in a statement on Wednesday. “Our year-end results reflect the positive impact of our fuel management and early stage returns from strategic investments in new technologies. It also reflects the work of our great people and the success of our innovative programs and new businesses, which are lowering costs and increasing efficiencies.”
The company said its Adjusted EBITDA* margin also increased to 19.5 percent in fiscal 2016, compared to 18.4 percent in fiscal 2015. The actual Adjusted EBITDA figure was $117.1 million, up from $102 million for fiscal 2015. Fourth-quarter Adjusted EBITDA was $38.6 million, an 11 percent increase over Q4 of 2015.
The current year results include a non-cash impairment or write-down on STI’s declining oil and gas assets of $1.6 million. “Adjusted for that non-cash write-down, our net income would have been $0.08 per share for the year,” Gallagher said.
Cash-calculated payout ratio decreased to 68.2 percent from 71.1 percent for the prior fiscal year, “continuing the downward trend we predicted,” Gallagher added.
He explained that resetting the company’s senior credit facility took advantage of low-interest rates, but a school bus industry shortage on drivers continues to put pressure on the contractor.
“We’ve increased our recruiting efforts and raised wages across the board every year and will continue to invest in our people to enhance our family culture and subsequently our retention, but the tight labor market may continue to create headwinds through fiscal 2017,” he said. “However, we’re working hard to offset any increases with innovative services and by deploying new technology and telematics in our operations that help us lower operating costs.”
STI shares were up more than 5 percentage points after the release of this latest report .
