NAPERVILLE, Ill. -- Laidlaw International Inc. reports that fiscal third-quarter financial results for its Greyhound Lines subsidiary were sharply
improved over the same period last year.
Greyhound reported revenue of $299.7 million for the three months ended May 31, up from $291.4 million for the same period in 2003. Revenue for the nine months ended May 31, totaled $881.1 million, compared to $847.5 million during the period a year earlier.
Earnings at Greyhound before interest, income taxes, depreciation, amortization expenses and accounting rules changes was $15.6 million for the 2004 quarter, versus $3.4 million during the prior year quarter, or a swing of $12.2 million.
For the nine months ended May 31, 2004, EBITDA earnings at Greyhound were $38.3 million, up from $5.8 million in the period ended May 31, 2003, or $32.5 million better.
EBITDA is commonly used as a measure to evaluate a company's ability to service or incur debt.
Laidlaw said the 2.8 percent increase in revenues for the third quarter and 4 percent increase for the nine months ended May 31, 2004, was principally due to a favorable foreign currency exchange rate and, to a lesser extent, an increase in tour and charter revenue due to new contracts.
Had there been no change in the exchange rate, reflecting Greyhound's Canadian and Mexican operations, revenue would have increased 1.5 percent and 1.4 percent during the three and nine months ended May 31, 2004.
Greyhound's improved profitability, as measured by EBITDA, was primarily due to the company's continuing focus on improving revenue per mile, and reducing operating costs. The modest increase in revenue, combined with a reduction in miles operated and workforce size, was major factors in the profit upswing.
Laidlaw also announced Greyhound had amended its revolving loan agreement, extending the maturity for two years to Oct. 2006. The amendments require Greyhound to jump through financial hoops that are the same as or more restrictive than its previous agreement.
However, Laidlaw says that improvements in Greyhound's business and financial picture bode well and, in fact, "management believes that there is no longer a going-concern risk (for Greyhound) in the near term."
That is significant because for months Laidlaw has been saying that Greyhound's poor performance cast doubt on its ability to continue as a going concern.
Still, Greyhound has tons of capital needs, plus heavy debt service, meaning it must continue to show improvement in its operating and financial results.
As a combined company, Laidlaw International reported third-quarter revenue of $1.24 billion, up 3.1 percent from the $1.2 billion for the prior year period. Much of the revenue growth came from Laidlaw's healthcare companies.
Operating income for the third quarter of 2004 was $89.5 million, compared to operating income of $73.7 million for the prior year quarter principally reflecting the improved performance of Greyhound.