EXHIBIT 99.1
LAIDLAW INTERNATIONAL REPORTS FOURTH QUARTER AND YEAR END
RESULTS FOR FISCAL 2003
o Emerged from bankruptcy protection in June 2003
o 4Q 2003 Revenue: $997.1 million; EBITDA: $63.6 million; Net Cash
Provided by Operating Activities: $187.0 million
o Full Year 2003 Pro forma Revenue: $4,482.8 million; EBITDA: $456.4
million; Net Cash Provided by Operating Activities: $395.5 million
NAPERVILLE, IL, November 19, 2003 -- Laidlaw International, Inc. (OTC Bulletin
Board: LALW; TSX: BUS) today announced financial results for its fourth quarter
and fiscal year ended August 31, 2003. As previously reported, the company
emerged from bankruptcy protection in June 2003. Accordingly, the 2003 fourth
quarter results presented in this news release are for the reorganized company.
Full year fiscal 2003 results are presented on a pro forma basis, reflecting the
reorganized company's results for the fourth quarter and the results of the
company's predecessor, Laidlaw Inc., for the first nine months of fiscal 2003.
All fiscal 2002 results presented in this news release are those of the
predecessor company. Because of the company's reorganization, comparisons to the
prior year may not be meaningful.
For the fourth quarter of fiscal 2003, revenue of $997.1 million was up 2.0%
from $977.4 million for the comparable prior year period, driven largely by
growth of the company's healthcare-related businesses. The net loss for the
fourth quarter of 2003 was $9.9 million compared to a net loss of $68.2 million
for the prior year quarter. The fourth quarter of fiscal 2003 net loss included
interest expense of $31.5 million. In the prior year period, interest expense
was not recorded for those liabilities subject to compromise. The net loss
incurred in the fourth quarter of 2002 included an adjustment of approximately
$65 million to increase insurance reserves.
Fourth quarter EBITDA (earnings before interest, income taxes, depreciation,
amortization, other income, other financing related expenses, gain on discharge
of debt, fresh start accounting adjustments and cumulative effect of change in
accounting principle) was $63.6 million as compared to an EBITDA loss of $15.6
million for the predecessor company in the fourth quarter of 2002. As discussed
above, the fourth quarter 2002 results included an adjustment of approximately
$65 million to increase insurance reserves. Net cash provided by operating
activities for the 2003 fourth quarter was $187.0 million as compared to net
cash provided by operating activities of $182.1 million for the predecessor
company in the prior year period.
EBITDA for full year fiscal 2003 was $456.4 million on a pro forma basis as
compared to $421.0 million for fiscal 2002. Net cash provided by operating
activities for full year 2003 was $395.5 million on a pro forma basis compared
to net cash provided by operating activities of $433.8 million for fiscal 2002.
The reduction of net cash for fiscal 2003 is primarily due to a $50 million
contribution to the company's pension plans. The company 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 the
company's ability to service or incur debt. Schedules reconciling EBITDA and
other non-GAAP financial measures, including results presented on a pro forma
basis, are provided as a supplement to this release.
"We emerged from chapter 11 with a sound financial structure," said Kevin
Benson, Laidlaw International's President and Chief Executive Officer. "The
operating results of the fourth quarter, generally the weakest due to
seasonality of the education services segment, were in line with our
expectations. I am particularly encouraged that, despite continued weak economic
conditions, important steps taken by Greyhound to more closely match capacity
with demand have resulted in improved performance of that unit."
As part of Laidlaw International's reorganization, fresh start accounting
principles were adopted effective June 1, 2003. The principal effect of fresh
start accounting is an adjustment of the assets and liabilities of the company
to represent "fair value". The fair value of the total enterprise was determined
to be $2.8 billion, the mid-point of a range of $2.4 to $3.2 billion, based on a
variety of valuation methods. The fresh start adjustments are generally
consistent with the estimates previously disclosed, however, a portion of the
enterprise value is now being assigned to deferred tax assets.
The creditors of the predecessor company received approximately $1.2 billion in
cash and 103.8 million shares of new common stock in Laidlaw International in
exchange for the compromise of approximately $4.0 billion of previously existing
corporate debt and other liabilities.
During the fourth quarter, Steve Gorman joined the company as President and
Chief Executive Officer of Greyhound and Hugh MacDiarmid joined as President and
Chief Executive Officer of Laidlaw Education Services.
"With the challenges of the chapter 11 reorganization behind us, we were able to
bring the new senior management team into the company and turn our attention to
the performance of each of our units," said Kevin Benson. "I believe with the
changes we have made to date, we should see revenue grow 2 to 3% in fiscal 2004,
yielding increases in EBITDA of 5 to 6% and similar increases in net cash from
operating activities. I also believe that these companies are capable of more.
We have now started major strategic reviews of all of the operating units to
determine the potential of each and the steps required to achieve that
potential. With these reviews currently underway, we are being conservative and
constraining capital spending. Accordingly, we project net capital expenditures
for fiscal 2004 to total approximately $250 million, down approximately 20% from
net capital expenditures for fiscal 2003 of $320 million."
The company will hold a conference call hosted by senior management to discuss
the financial results on Thursday, November 20, 2003 at 8:00 a.m. Eastern Time.
A webcast of the conference call will be accessible at Laidlaw International's
website www.laidlaw.com.
To participate in the call, please dial:
800-473-6123 - (US and Canada)
973-582-2706 - (International)
A replay will be available immediately after the conference call
through December 7, 2003. To access the replay, dial 877-519-4471 (U.S and
Canada) or 973-341-3080 (International); access code: 4272566. Additionally, the
webcast will be archived on the company's website for approximately one month.
Forward-Looking Statements
Except for historical information contained herein, the statements made in this
release constitute forward-looking statements within the meaning of the
Securities Act of 1933, the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve certain risks and uncertainties, including statements regarding the
intent, belief or current expectations of Laidlaw International and its
management regarding the company's strategic directions, prospects and future
results. Certain factors may cause actual results to differ materially from
those contained in the forward-looking statements, including economic and other
conditions in the markets in which the company operates, Greyhound's ability to
continue as a going concern, governmental regulations, the competitive
environment, actual accident claims experience, third-party payor health care
reimbursement rates, the restrictive covenants contained in the company's senior
secured credit facility; the ability to continue to satisfy bonding requirements
for existing or new customers, successful completion of labor negotiations
including those at the company's Greyhound business, potential pension plan
funding requirements, the ability to realize revenue growth, the ability to
implement initiatives designed to increase operating efficiencies and improve
results and other risks discussed under the caption "Factors That May Affect
Future Results" in the company's Quarterly Report on Form 10-Q for the quarter
ended May 31, 2003 and as may be detailed in the company's other filings with
the Securities and Exchange Commission.
Laidlaw International, Inc. is a holding company for North America's largest
providers of school and inter-city bus transport, public transit, patient
transportation and emergency department management services. Trades of the
company's shares are posted on the OTC Bulletin Board (OTCBB: LALW).
Additionally, the company's shares trade on the Toronto Stock Exchange (TSX:
BUS). For more information, visit our website at www.laidlaw.com.
Contact:
Sarah Lewensohn
Director, Investor Relations
(630) 848-3120
LAIDLAW INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS ENDED TWELVE MONTHS
AUGUST 31, ENDED YEAR ENDED*
---------------------- AUGUST 31, AUGUST 31,
2003 2002* 2003 2002
-------- -------- ---------- -----------
REVENUE $ 997.1 $ 977.4 $4,482.8 $4,432.1
Compensation expense 581.7 580.5 2,582.8 2,523.0
Accident claims and professional liability expenses 62.9 122.1 304.3 325.8
Vehicle related costs 74.8 71.4 277.2 272.5
Occupancy 51.4 48.9 201.8 202.2
Fuel expense 36.7 35.3 170.1 163.0
Depreciation expense 47.7 45.1 276.1 270.6
Amortization expense 4.4 20.0 5.3 88.2
Other operating expense 126.0 134.8 490.2 524.6
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATING SEGMENTS 11.5 (80.7) 175.0 62.2
Interest expense (31.5) (6.2) (51.1) (27.7)
Gain on discharge of debt -- -- 1,482.8 --
Fresh start accounting adjustments -- -- (609.6) --
Other financing related expenses -- (2.1) (35.0) (44.7)
Other income 0.1 6.3 15.1 15.3
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS
BEFORE INCOME TAXES AND CUMULATIVE EFFECT (19.9) (82.7) 977.2 5.1
OF CHANGE IN ACCOUNTING PRINCIPLE
Income tax recovery (expense) 10.0 14.5 5.5 9.8
-------- -------- -------- --------
INCOME (LOSS) FOR THE PERIOD BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (9.9) (68.2) 982.7 14.9
Cumulative effect of change in
accounting principle -- -- (2,205.4) --
-------- -------- -------- --------
NET INCOME (LOSS) ($ 9.9) ($ 68.2) ($1,222.7) $ 14.9
======== ======== ======== ========
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS NINE MONTHS TWELVE MONTHS
ENDED ENDED* ENDED
AUGUST 31, MAY 31, AUGUST 31,
2003 2003 2003
---------- -------- ------------
REVENUE $ 997.1 $3,485.7 $4,482.8
Compensation expense 581.7 2,001.1 2,582.8
Accident claims and professional liability expenses 62.9 241.4 304.3
Vehicle related costs 74.8 202.4 277.2
Occupancy 51.4 150.4 201.8
Fuel expense 36.7 133.4 170.1
Depreciation expense 47.7 228.4 276.1
Amortization expense 4.4 0.9 5.3
Other operating expense 126.0 364.2 490.2
-------- -------- --------
INCOME FROM OPERATING SEGMENTS 11.5 163.5 175.0
Interest expense (31.5) (19.6) (51.1)
Gain on discharge of debt -- 1,482.8 1,482.8
Fresh start accounting adjustments -- (609.6) (609.6)
Other financing related expenses -- (35.0) (35.0)
Other income 0.1 15.0 15.1
-------- -------- --------
INCOME (LOSS) FROM OPERATIONS
BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE (19.9) 997.1 977.2
Income tax recovery (expense) 10.0 (4.5) 5.5
-------- -------- --------
INCOME (LOSS) FOR THE PERIOD BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (9.9) 992.6 982.7
Cumulative effect of change in
accounting principle -- (2,205.4) (2,205.4)
-------- -------- --------
Net loss ($ 9.9) ($1,212.8) ($1,222.7)
======== ======== ========
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS ENDED TWELVE MONTHS
AUGUST 31, ENDED YEAR ENDED*
------------------------- AUGUST 31, AUGUST 31,
2003 2002* 2003 2002
-------- -------- ------------ ------------
REVENUE
Education Services $ 184.9 $ 180.3 $1,499.7 $1,479.7
Public Transit Services 71.0 75.6 283.1 309.5
Greyhound 356.7 360.5 1,204.2 1,223.7
Healthcare Transportation Services 255.9 250.6 1,015.2 987.9
Emergency Management Services 128.6 110.4 480.6 431.3
-------- -------- -------- --------
Consolidated $ 997.1 $ 977.4 $4,482.8 $4,432.1
======== ======== ======== ========
INCOME (LOSS) FROM OPERATIONS BEFORE
DEPRECIATION AND AMORTIZATION
Education Services ($21.7) ($49.1) $ 280.3 $ 272.7
Public Transit Services 9.2 (5.7) 16.5 (1.7)
Greyhound 61.2 20.8 67.0 53.6
Healthcare Transportation Services 7.6 18.1 63.4 76.0
Emergency Management Services 7.3 0.3 29.2 20.4
-------- -------- -------- --------
Consolidated $63.6 ($15.6) $ 456.4 $ 421.0
======== ======== ======== ========
OPERATING MARGINS BEFORE
DEPRECIATION AND AMORTIZATION
Education Services -11.7% -27.2% 18.7% 18.4%
Public Transit Services 13.0% -7.5% 5.8% -0.5%
Greyhound 17.2% 5.8% 5.6% 4.4%
Healthcare Transportation Services 3.0% 7.2% 6.2% 7.7%
Emergency Management Services 5.7% 0.3% 6.1% 4.7%
Consolidated 6.4% -1.6% 10.2% 9.5%
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS NINE MONTHS TWELVE MONTHS
ENDED ENDED* ENDED
AUGUST 31, MAY 31, AUGUST 31,
2003 2003 2003
------------ ----------- -------------
REVENUE
Education Services $ 184.9 $1,314.8 $1,499.7
Public Transit Services 71.0 212.1 283.1
Greyhound 356.7 847.5 1,204.2
Healthcare Transportation Services 255.9 759.3 1,015.2
Emergency Management Services 128.6 352.0 480.6
-------- -------- --------
Consolidated $ 997.1 $3,485.7 $4,482.8
======== ======== ========
INCOME (LOSS) FROM OPERATIONS BEFORE
DEPRECIATION AND AMORTIZATION
Education Services ($21.7) $ 302.0 $ 280.3
Public Transit Services 9.2 7.3 16.5
Greyhound 61.2 5.8 67.0
Healthcare Transportation Services 7.6 55.8 63.4
Emergency Management Services 7.3 21.9 29.2
-------- -------- --------
Consolidated $63.6 $ 392.8 $ 456.4
======== ======== ========
OPERATING MARGINS BEFORE
DEPRECIATION AND AMORTIZATION
Education Services -11.7% 23.0% 18.7%
Public Transit Services 13.0% 3.4% 5.8%
Greyhound 17.2% 0.7% 5.6%
Healthcare Transportation Services 3.0% 7.3% 6.2%
Emergency Management Services 5.7% 6.2% 6.1%
Consolidated 6.4% 11.3% 10.2%
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS ENDED TWELVE MONTHS
AUGUST 31, ENDED YEAR ENDED*
---------------------- AUGUST 31, AUGUST 31,
2003 2002* 2003 2002
------- ------- ------------- -----------
EBITDA, AS REPORTED $ 63.6 ($15.6) $456.4 $421.0
Cash paid for interest (12.3) (3.8) (37.3) (31.9)
Cash paid for other financing related expenses (15.2) (19.3) (26.8) (38.7)
Other income 0.1 6.3 15.1 15.3
Cash received for income taxes 8.3 2.0 12.7 10.4
Increase in claims liabilities and professional reserves 4.7 66.5 60.8 61.6
Pension contribution per the PBGC Agreement -- -- (50.0) --
Increase in pension liability 0.6 -- 1.3 --
Cash provided by (used in financing) other working
capital items 144.9 148.8 (2.2) 46.2
Decrease (increase) in restricted cash and cash equivalents (0.7) (17.3) 0.2 (38.6)
Other (7.0) 14.5 (34.7) (11.5)
------ ------ ------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES $187.0 $182.1 $395.5 $433.8
====== ====== ====== ======
EBITDA, a non-GAAP financial measure, represents earnings before interest,
income taxes, depreciation, amortization, other income, other financing related
expenses, gain on discharge of debt, fresh start accounting adjustments and
cumulative effect of 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.
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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
(U.S. IN $MILLIONS)
(UNAUDITED)
PRO FORMA**
THREE MONTHS NINE MONTHS TWELVE MONTHS
ENDED ENDED* ENDED
AUGUST 31, MAY 31, AUGUST 31,
2003 2003 2003
------------ ----------- -------------
EBITDA, AS REPORTED $ 63.6 $392.8 $456.4
Cash paid for interest (12.3) (25.0) (37.3)
Cash paid for other financing related expenses (15.2) (11.6) (26.8)
Other income 0.1 15.0 15.1
Cash received for income taxes 8.3 4.4 12.7
Increase in claims liabilities and professional reserves 4.7 56.1 60.8
Pension contribution per the PBGC Agreement -- (50.0) (50.0)
Increase in pension liability 0.6 0.7 1.3
Cash provided by (used in financing) other working
capital items 144.9 (147.1) (2.2)
Decrease (increase) in restricted cash and cash equivalents (0.7) 0.9 0.2
Other (7.0) (27.7) (34.7)
------ ------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES $187.0 $208.5 $395.5
====== ====== ======
EBITDA, a non-GAAP financial measure, represents earnings before interest,
income taxes, depreciation, amortization, other income, other financing related
expenses, gain on discharge of debt, fresh start accounting adjustments and
cumulative effect of 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.
* Predecessor Company's results
** Includes Predecessor Company's results for the nine months ended May 31,
2003.
To facilitate a comparison of the Company's operating performance in fiscal
2003, 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.