SOURCE: Bright Horizons Family Solutions

April 25, 2008 15:17 ET

Bright Horizons Family Solutions Reports First Quarter Financial Results

BOSTON, MA--(Marketwire - April 25, 2008) - Bright Horizons Family Solutions, Inc. (NASDAQ: BFAM) today announced financial results for the first quarter ended March 31, 2008.

Revenue for the first quarter of 2008 increased to $199.8 million from $190.1 million for the same quarter last year. During the first quarter, the Company recorded $5.6 million in expenses directly related to the Company's previously announced merger agreement to be acquired by an affiliate of Bain Capital Partners, LLC (the "acquisition-related expenses"). As a result, net income and fully diluted earnings per share for the first quarter of 2008 were $6.6 million and $0.24 respectively, as compared to $11.2 million and $0.42 respectively in the first quarter of 2007. Excluding the costs associated with the pending acquisition, first quarter net income was $12.1 million resulting in earnings per diluted share of $0.45.

Bright Horizons added 15 new centers in the first quarter of 2008, including the nine Lipton Corporate Child Care Centers acquired in January and new centers for Alexian Brothers Medical Center and American Express. The Company also opened two new consortium centers in London during the quarter and, as of March 31, 2008, operated 654 early education and family centers with the capacity to serve 72,000 children and families.

During the quarter Bright Horizons was pleased to be named as one of FORTUNE magazine's "100 Best Companies to Work For" for the ninth time, and is one of the Financial Times' "50 Best Workplaces" in the UK and one of the "50 Best Companies to Work For" in Ireland. The company was also recently recognized as one of "The 2008 DiversityInc Top 50 Companies for Diversity."

Due to the pending special meeting of stockholders scheduled for May 7, 2008 regarding the previously announced agreement and plan of merger providing for the acquisition of Bright Horizons by an affiliate of Bain Capital Partners, LLC, the Company will not host a conference call or webcast regarding its first quarter 2008 results.

Bright Horizons Family Solutions is the world's leading provider of employer-sponsored child care, early education and work/life consulting services, managing more than 600 early care and family centers in the United States, the United Kingdom, Ireland and Canada. Bright Horizons serves more than 700 clients, including more than 95 FORTUNE 500 companies and 75 of the "100 Best Companies" as recognized by Working Mother magazine. Bright Horizons is one of FORTUNE magazine's "100 Best Companies to Work For."

This press release contains forward-looking statements which involve a number of risks and uncertainties. Bright Horizons Family Solutions' actual results may vary significantly from the results anticipated in these forward-looking statements as a result of certain factors. These include the ability of the Company to 1) close on its previously announced merger agreement to be acquired by an affiliate of Bain Capital Partners, LLC., 2) execute contracts relating to new commitments, 3) enroll families in new as well as existing centers, and 4) open new centers and integrate acquisitions, as well as other factors that are discussed in detail in the Company's filings with the Securities and Exchange Commission.

                     Bright Horizons Family Solutions
                      Selected Financial Information
                                (Unaudited)
                   (in thousands except per share data)

                                            Three months ended
                                ------------------------------------------
                                      3/31/2008             3/31/2007
                                --------------------  --------------------

Revenue                         $ 199,827      100.0% $ 190,077      100.0%

Cost of services                  158,118       79.1%   151,651       79.8%
                                ---------  ---------  ---------  ---------
Gross profit                       41,709       20.9%    38,426       20.2%

Selling, general and
 administrative expenses           19,683        9.9%    17,703        9.3%
Acquisition-related expenses        5,567        2.8%         -        0.0%
Amortization                        1,145        0.6%     1,180        0.6%

Income from operations             15,314        7.6%    19,543       10.3%

Net interest expense                  (32)       0.0%      (271)      -0.2%
                                ---------  ---------  ---------  ---------

Income before income taxes         15,282        7.6%    19,272       10.1%

Income tax provision               (8,715)      -4.4%    (8,056)      -4.2%
                                ---------  ---------  ---------  ---------

Net income                      $   6,567        3.2% $  11,216        5.9%
                                =========  =========  =========  =========


Per share data:
Net income per share - basic    $    0.25             $    0.43
                                =========             =========
Weighted average number of
 common shares outstanding         26,142                26,018
                                =========             =========


Net income per share - diluted  $    0.24             $    0.42
                                =========             =========
Weighted average number of common
 and common equivalent shares      27,008                26,961
                                =========             =========




                     Bright Horizons Family Solutions
                First Quarter 2008 Supplemental Information
                                (Unaudited)
                   (in thousands except per share data)

Adjustment for Acquisition-Related Expenses
The Company recognized certain administrative expenses in the first quarter
of 2008, consisting primarily of fees earned by financial advisors and
attorneys, directly associated with our previously announced agreement to
be acquired by an affiliate of Bain Capital Partners, LLC.  The Company
believes that it is in the best interest of investors to present the
following financial information on a proforma basis excluding the impact of
these acquisition-related expenses in order to aid in the evaluation of the
Company's results on a basis comparable to previously reported periods.


                                          Three months ended 03/31/2008
                                         ---------------------------------
                                                    Adjustments
                                                        for
                                          Results   Acquisition
                                             As       Related    Proforma
                                         Reported     Expenses    Results
                                         ---------  ------------ ---------
Income from operations                   $  15,314  $      5,567 $  20,881
Net interest expense                           (32)            -       (32)
                                         ---------  ------------ ---------
Income before income taxes                  15,282         5,567    20,849
Income tax provision                     $  (8,715) $          - $  (8,715)
                                         ---------  ------------ ---------
Net income                               $   6,567  $      5,567 $  12,134
                                         ---------  ------------ ---------

Net income per share - diluted           $    0.24  $       0.21 $    0.45
Weighted average common shares - diluted    27,008        27,008    27,008



EBITDA (adjusted for acquisition-related expenses)
EBITDA is used as a financial performance indicator within the child care
industry and is presented for informational purposes only.  EBITDA is not a
financial measure under generally accepted accounting principles and may be
subject to varying methods of calculation and may not be comparable to
other similarly titled measures by other companies.

                                                      Three months ended
                                                    ----------------------
                                                      3/31/2008  3/31/2007
                                                    ------------ ---------
Earnings before interest, taxes, depreciation
 and amortization (EBITDA)                          $     27,112 $  25,105

Reconciliation of net income to EBITDA:
Net income, as reported                             $      6,567 $  11,216
Add back income tax provision                              8,715     8,056
Adjustment for acquisition-related expenses                5,567         -
Add net interest expense                                      32       271
                                                    ------------ ---------
Income from operations                              $     20,881 $  19,543
Add back depreciation                                      5,086     4,382
Add back amortization                                      1,145     1,180
                                                    ------------ ---------
EBITDA (adjusted for acquisition-related expenses)  $     27,112 $  25,105
                                                    ------------ ---------

Contact Information

  • INVESTOR CONTACT:
    Elizabeth Boland
    617-673-8000

    MEDIA CONTACT:
    Ilene Serpa
    617-673-8000