STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

Drip - response from IR

[d_trump]

last week I emailed IR and suggested the drip should be cancelled because it offsets the ncib. Got a reply today - they said drip participation is 5% and that they will be discussing it at the next board meeting.

[ffhwatcher3]

Last year the dividend was something like $33-34M.  DRIP was about $8.5M in cash savings for the company.  I realize you are pushing to stop the DRIP but do you understand where that $8.5M would have come from last year if they didn't have the DRIP?

[d_trump]

The drip is currently saving them less than $3M per year: 96M shares x 5% x .44 x 1.35 = $2.85M However it is costing them dilution (2.5M shares per year) and it's offsetting the benefit of the share buyback.  Why buy back shares and then turn around and re-issue them?

[ffhwatcher3]

Last quarter they issued 492,040 shares for the DRIP. I realize IR told you 5%, which it may be right now but as of last quarter, the DRIP saved them $1.7M (US$).  On Oct 15, 2015 SCNF rec'd almost 84k shares from the DRIP.  136k, 109k + 93k are the SNCF DRIP shares from last quarter alone. Your numbers are not adding up, unless SNCF pulled the rest of their shares out of the DRIP

[BlueCollar51]

In 2016 Q1 financials the value of the DRIP shares issued was $1.99m. There was $8.521m cash dividends paid. That implies a DRIP participation of 18.9%. According to my calculations based on the publicly available information SNCF received abt. 72% of the DRIP shares issued in Q1.   They have told you that the current DRIP participation is 5%. What is the reason for the substantial reduction?

[d_trump]

Yes perhaps SNCF has withdrawn? Here is the email: Hi xxxxx, Thanks for your e-mail. The DRIP currently has around 5 percent participation but we will be reviewing the strategy at the upcoming Board meeting. Best regards, Doug Doug Coupe Director of Communications & Investor Relations Student Transportation, Inc. 843.884.2720 x213

[ffhwatcher3]

Not doubting IR said what they said. Maybe they have 200 shareholders and 10 of them are enrolled in the DRIP :-)

[jammo71]

Maybe I'm missing something but wouldn't SNCF unloading 4 million shares in Q1 explain the reduction in the DRIP? This presumes that whoever bought the shares didn't sign up for the DRIP but it seems like a pretty reasonable explanation.

[ffhwatcher3]

SNCF had 15M shares. Sold 4M. Hold 11M. If 96-97M outstanding, that is more than 11% of the shares outstanding. They used to represent about 60% of the DRIP, according to SEDI and company reports. As recent as Oct. SNCF were still receiving about 85k shares/month from the DRIP, so something had to  happen after Oct with the SNCF shares or the 5% number was an error. Pet Peeve - Denis comes

[BlueCollar51]

I have posted the reasons that make me suspect that SNCF has withdrawn their shares from the DRIP.   Regardless of the cause the substantial reduction in DRIP participation to the current 5% as told to d_trump by the IR dept. will have consequences. Although the “Dilution by DRIP” will be reduced there will be a corresponding increase in the CASH dividend obligation going forward.   The