Laidlaw International Reports Third Quarter Fiscal 2004 Results
NAPERVILLE, Ill.--July 8, 2004--Laidlaw International, Inc. today announced financial results for its third quarter of fiscal 2004 ended May 31, 2004. As previously reported, the company emerged from bankruptcy protection in June 2003. Accordingly, the results of the third quarter of 2004 presented in this news release are for the reorganized company. All results for the third quarter ended May 31, 2003 are for Laidlaw Inc., the predecessor company. Because of the company's reorganization, comparisons to the prior year may not be meaningful.For the third quarter of fiscal 2004, revenue of $1,239.6 million was up $36.8 million or 3.1% from $1,202.8 million for the prior year period largely due to revenue growth from Laidlaw International's healthcare companies. Net income for the third quarter of 2004 was $34.6 million compared to $62.2 million for the prior year quarter. In the prior year period of the predecessor company, interest expense was not recorded for those liabilities subject to compromise.
Operating income for the third quarter of 2004 was $89.5 million, as compared to operating income of $73.7 million for the prior year quarter principally reflecting improved performance of the company's Greyhound Lines subsidiary.
Third quarter EBITDA (earnings before interest; income taxes; depreciation; amortization; other expenses, net and cumulative effect of change in accounting principle) was $164.2 million as compared to an EBITDA of $150.9 million in the third quarter of 2003, an expansion in margin to 13.2% from 12.5% of revenue. Laidlaw International presents EBITDA, a non-GAAP measure, as a supplemental disclosure to the financial results provided in this news release. EBITDA is commonly used as a measure to evaluate a company's ability to service or incur debt. A schedule reconciling EBITDA to net cash from operating activities is provided as a supplement to this release. Net cash from operating activities for the third quarter of fiscal 2004 was $186.6 million as compared to net cash provided by operating activities of $199.7 million for the prior year period.
"This was a satisfactory quarter," said Kevin Benson, President and Chief Executive Officer of Laidlaw International, Inc. "Our school bus operations performed well as did Greyhound and AMR, where we continued to work on improving margins through lower overheads and better equipment utilization."
Mr. Benson added, "Our longer term operational plans are now well advanced and share the common objective of improving performance and demonstrating shareholder value. Our recent announcement of Greyhound's network simplification in the northwest United States is the first of many operational improvements initiated by these plans."
As of May 31, 2004, the company had unrestricted cash and cash equivalents of $161.3 million and debt outstanding of $1,159.3 million.
For the nine months ended May 3, 20041, 2004, Laidlaw International reported consolidated revenue of $3,612.4 million, EBITDA of $429.5 million and net cash from operating activities of $281.2 million. Year to date net capital expenditures totaled $150.8 million. The company now expects full year fiscal 2004 revenue to be 3 to 4% higher than revenue in fiscal 2003 and full year fiscal 2004 EBITDA to be 7 to 8% higher than EBITDA in fiscal 2003. Net capital expenditures are expected to be approximately $250 million.
Earlier this week, the company's subsidiary, Greyhound Lines, Inc., entered into an amendment to its $125 million revolving credit facility extending the maturity date through October 24, 2006, with an option to extend the term for an additional year subject to certain terms and conditions. The amendment resets the financial covenants and modifies the interest rate incurred on the borrowings and letter of credit fees.
Laidlaw International also announced that, due to lack of trading activity in Toronto, it is filing an application with the Toronto Stock Exchange to delist the company's common stock traded under the symbol: BUS. The company's common stock will continue to be listed on the New York Stock Exchange, symbol: LI. The actual delisting is expected to occur by July 16, 2004.
LAIDLAW INTERNATIONAL, INC.
Consolidated Statements of Operations
( $ in millions except per share amounts )
(unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------- --------------------
2004 2003(a) 2004 2003(a)
--------- --------- --------- ----------
Revenue $1,239.6 $1,202.8 $3,612.4 $3,485.7
Compensation expense 706.5 691.3 2,070.6 2,001.1
Accident claims and
professional liability
expenses 78.1 71.4 245.2 241.4
Vehicle related costs 68.7 68.8 207.4 202.4
Occupancy costs 50.0 49.2 151.2 150.4
Fuel 50.1 46.4 139.8 133.4
Depreciation 70.1 76.8 215.3 228.4
Amortization 4.6 0.4 13.8 0.9
Other operating costs 122.0 124.8 368.7 364.2
--------- --------- --------- ----------
Operating Income 89.5 73.7 200.4 163.5
Interest expense (31.4) (6.6) (98.7) (19.6)
Other expenses, net (0.1) (3.4) (3.7) (20.0)
--------- --------- --------- ----------
Income before income taxes
and cumulative effect of
a change in accounting
principle 58.0 63.7 98.0 123.9
Income tax expense (23.4) (1.5) (40.2) (4.5)
--------- --------- --------- ----------
Income before cumulative
effect of a change
in accounting principle 34.6 62.2 57.8 119.4
Cumulative effect of a
change in accounting
principle - - - (2,205.4)
--------- --------- --------- ----------
Net income (loss) $ 34.6 $ 62.2 $ 57.8 $(2,086.0)
--------- --------- --------- ----------
--------- --------- --------- ----------
Basic earnings (loss) per share
Income before cumulative
effect of a change in
accounting principle $ 0.35 $ 0.19 $ 0.58 $ 0.37
Cumulative effect of a change
in accounting principle - - - (6.77)
--------- --------- --------- ----------
Net income (loss) $ 0.35 $ 0.19 $ 0.58 $ (6.40)
--------- --------- --------- ----------
--------- --------- --------- ----------
Diluted earnings (loss) per share
Income before cumulative
effect of a change in
in accounting principle $ 0.33 $ 0.19 $ 0.56 $ 0.37
Cumulative effect of a change
in accounting principle - - - (6.77)
--------- --------- --------- ----------
Net income (loss) $ 0.33 $ 0.19 $ 0.56 $ (6.40)
--------- --------- --------- ----------
--------- --------- --------- ----------
(a) Predecessor Company's results
To facilitate a comparison of the Company's operating performance in
fiscal 2004, the Predecessor Company's operating results have been
shown as comparative figures. However, as a result of the
reorganization, comparison to the Predecessor Company's results may
not be meaningful.
LAIDLAW INTERNATIONAL, INC.
Operating Highlights
( $ in millions )
(unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------- --------------------
2004 2003(a) 2004 2003(a)
--------- --------- --------- ----------
Revenue
Education services $ 459.7 $ 457.9 $1,310.2 $1,314.8
Public Transit services 78.7 72.8 223.3 212.1
Greyhound 299.7 291.4 881.1 847.5
Healthcare Transportation
services 265.6 259.8 790.0 759.3
Emergency Management
services 135.9 120.9 407.8 352.0
--------- --------- --------- ----------
Consolidated $1,239.6 $1,202.8 $3,612.4 $3,485.7
--------- --------- --------- ----------
--------- --------- --------- ----------
EBITDA
Education services $ 120.8 $ 116.1 $ 306.0 $ 302.0
Public Transit services 1.5 5.6 (2.8) 7.3
Greyhound 15.6 3.4 38.3 5.8
Healthcare Transportation
services 22.1 18.6 63.5 55.8
Emergency Management
services 4.2 7.2 24.5 21.9
--------- --------- --------- ----------
Consolidated $ 164.2 $ 150.9 $ 429.5 $ 392.8
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EBITDA Margins
Education services 26.3% 25.4% 23.4% 23.0%
Public Transit services 1.9% 7.7% -1.3% 3.4%
Greyhound 5.2% 1.2% 4.3% 0.7%
Healthcare Transportation
services 8.3% 7.2% 8.0% 7.3%
Emergency Management
services 3.1% 6.0% 6.0% 6.2%
Consolidated 13.2% 12.5% 11.9% 11.3%
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Net Capital Expenditures 45.7 104.2 150.8 208.7
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EBITDA, a non-GAAP financial measure, represents earnings before
interest; income taxes; depreciation; amortization; other expenses,
net and cumulative effect of a change in accounting principle.
EBITDA is presented solely as a supplemental disclosure with respect
to liquidity because the Company believes it provides useful
information regarding its ability to service or incur debt.
(a) Predecessor Company's results
To facilitate a comparison of the Company's operating performance in
fiscal 2004, the Predecessor Company's operating results have been
shown as comparative figures. However, as a result of the
reorganization, comparison to the Predecessor Company's results may
not be meaningful.
LAIDLAW INTERNATIONAL, INC.
Reconciliation of Non-GAAP Financial Measures
( $ in millions )
(unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------- --------------------
2004 2003(a) 2004 2003(a)
--------- --------- --------- ----------
EBITDA, as reported $ 164.2 $ 150.9 $ 429.5 $ 392.8
Cash paid for interest (20.6) (11.7) (80.0) (25.0)
Cash received (paid) for
income taxes (0.5) 6.0 10.7 4.4
Increase in claims liability
and professional liability
insurance reserves 12.7 7.4 47.2 56.1
Cash used in financing other
working capital items 27.3 25.8 (130.3) (137.7)
Decrease in restricted cash
and cash equivalents 3.5 33.9 4.1 0.9
Other - (12.6) - (27.7)
--------- --------- --------- ----------
Net cash provided by
operating activities $ 186.6 $ 199.7 $ 281.2 $ 263.8
--------- --------- --------- ----------
--------- --------- --------- ----------
EBITDA, a non-GAAP financial measure, represents earnings before
interest; income taxes; depreciation; amortization; other expenses,
net and cumulative effect of a change in accounting principle.
EBITDA is presented solely as a supplemental disclosure with respect
to liquidity because the Company believes it provides useful
information regarding its ability to service or incur debt.
(a) Predecessor Company's results
To facilitate a comparison of the Company's operating performance in
fiscal 2004, the Predecessor Company's operating results have been
shown as comparative figures. However, as a result of the
reorganization, comparison to the Predecessor Company's results may
not be meaningful.