WALL, NJ (May 10, 2013) - On May 15th, 2013 we will deliver our 100th consecutive monthly dividend which is truly a celebration. We listed on the TSX as a public company just over eight years ago in a high yield (income trust like) structure. It was structured originally as two separate securities, one common share and one high yield bond "clipped together" and traded as a "unit", similar to a Trust Unit. While we have never been a trust, this was not necessarily the most efficient model for us but it did allow us access to larger pools of investors through the capital markets. The structure was converted in 2010 from two securities trading as a unit as we paid off the high yielding note to a simpler common share security now listed under the trading symbol STB on both the TSX and NASDAQ.
Our 100th consecutive monthly dividend payment is a tremendous achievement for us today and a great way to show our thanks and our commitment to the many shareholders, financial community members and employees who have help us on along the way. We have built a tremendous company that safely transports nearly one million students each school day. The consistency and safety of our operations matches the consistency of our dividends, steady and reliable.
May 15th also marks the 16th anniversary since I founded the company in 1997 with a mission to build a company with good people providing quality service. Eight years as a private company and now eight years as a public company, we have demonstrated our resolve that this is a company "Built to Last". It is the public and shareholder trust that we take ever so seriously. That trust goes with safely and securely transporting children and the trust of our shareholders with the investments they have made in our company, both which have allowed us to prosper and grow. The confidence shown by our customers and shareholders has allowed us to build a solid foundation and footprint throughout North America with the industry's best management team working side by side with thousands of employees and associates who care about what they do every day. Our company is widely recognized in the industry as the employer of choice because we treat our people with respect and because we are a safe, caring service provider that is involved in the local communities.
This is a family business; one that is made from hometown families of the over 10,000 people we employ who work together and watch out for the well being of each other. We work very hard ensuring that our folks know they are appreciated, treated respectfully and up to date on all guidelines and regulations. We care about their safety and that of our passengers. It is this culture that has made us different in an industry that has tended to commoditize its people and customer service. It's no wonder that we have earned a 95% renewal rate on our contracts over our 16 year term. In a world today where budgets are tight and costs are important, we have been able to retain our business based upon our reputation for quality service and innovation. We have been awarded many new contracts in communities not by low price, but where our expertise and customer service is valued. It is our customers and employees who are our best references because we listen very carefully to them. We learn from our customers and address issues immediately. The results speak for themselves.
Today, we must be more innovative and constantly working on ways to improve service quality and work within our customer's budgetary constraints. We do this by focusing on core programs in technology, fuel savings, safety, training, and maintenance. Another tool we have been able to use effectively is low cost financing and vehicle leasing. Beginning next school year almost 25% of our fleet will be either leased with low cost financing or "managed" by us, where our schools own the equipment while we operate it for them under a service agreement.
Currently over 10,000 school districts in North America still own and operate their own fleets. Our new innovative lease program designed specifically for schools and municipalities has attracted many financial institutions to make available low cost long term leasing programs not only for us, but for potential customers under a new structured Municipal Tax Lease as well. This program is something desperately needed to upgrade the aging school bus fleets across North America and improve the quality of air in and around our communities and schools by substantially lowering carbon emissions. Our program allows school districts to modernize their fleets, reduce costs, it creates jobs and it allows us to have "less pollution and less dilution". The use of low cost financing tied to our long term contracts plus lowering our operating costs is a great way for us to grow without going back to the market for additional capital at normal growth levels.
The first year impact of this program is expected to be seen in our upcoming fiscal year 2014, which begins this July. We are forecasting another great year and our lowest payout ratio ever in fiscal 2014 as a result of the new programs. Our goal is to reach a 5 to 6 percent yield through share price appreciation and to continually improve our pay out ratio with the new programs we have in place.
None of this could have been achieved without the support of our shareholders who have allowed us to build from the ground up a solid foundation of operations. Having the top industry management in place with local expertise, employees who are valued members of our family and operating from a strategic geographic footprint has been our "secret sauce". We are grateful to all those who have been there with us over these eight years as a public company and we look forward to continuing to provide a safe environment for our employees, customers and shareholders.
Thank you and have a safe day,
Denis J Gallagher, Founder, Chairman & CEO