SOURCE: Bright Horizons Family Solutions

February 13, 2006 16:53 ET

Bright Horizons Family Solutions Reports Fourth Quarter 2005 Financial Results

BOSTON, MA -- (MARKET WIRE) -- February 13, 2006 -- Bright Horizons Family Solutions, Inc. (NASDAQ: BFAM) today announced financial results for the fourth quarter ended December 31, 2005.

Earnings per diluted share of $0.35 in the quarter ended December 31, 2005 increased 30% from $0.27 per diluted share for the quarter ended December 31, 2004. Revenue for the fourth quarter of 2005 increased 13% to $163.1 million from $144.7 million for the same quarter last year. Net income for the fourth quarter of 2005 increased 30% to $9.8 million from $7.6 million in the fourth quarter of 2004.

Earnings per diluted share of $1.29 for the year ended December 31, 2005 increased 32% from $0.98 per diluted share for the year ended December 31, 2004. Revenue for the full year 2005 increased 13% to $625.3 million from $551.8 million for the same period last year. Net income for the year increased 34% to $36.7 million from $27.3 million in 2004.

"It was another strong year for Bright Horizons, and we are very pleased with the results," commented David Lissy, Chief Executive Officer. "During 2005 we added 72 new centers to our network in partnership with some of the world's finest employers, including The GAP, Union Pacific, YUM! Brands, Schering Plough, National City Bank, Unilever, and Huntington Bank. We also opened our first center in Puerto Rico in partnership with Amgen, and added five centers in the UK, including our 100th center outside the continental U.S. for the Royal Bank of Scotland." The Company added three centers and closed three centers in the fourth quarter of 2005 and, as of December 31, 2005, operated 616 early care and education centers with the capacity to serve more than 66,300 children and families.

"During 2005 we significantly expanded our network of back-up child care centers with the acquisition of ChildrenFirst, adding 33 centers and more than 270 clients in the U.S., the UK and Canada. Bright Horizons is the leading provider of back-up and emergency care with a network of 70 centers in three countries, offering employers a broad range of locations and services tailored to meet their employees' back-up and emergency child care needs," said Lissy.

"Of course, none of this would be possible without the passion and dedication of our team of professionals," added Lissy. "For this reason, we were extremely honored to be named one of FORTUNE magazine's '100 Best Companies to Work for in America' for the 7th time and are proud to be in the company of such forward-thinking employers, including more than 30 of our own clients. This honor marks a fitting start to 2006, which Bright Horizons has designated as 'The Year of the Teacher.' During the year, we will be focusing attention on early educators around the world and the important contributions they make through their commitment to children, and their families, during the most formative years of their lives. As an industry leader, we are committed to raising the bar for standards of high-quality child care and education through professional opportunities and lifetime learning for teachers."

Bright Horizons Family Solutions will host an investor conference call today at 4:30 pm ET. The public is invited to listen to the conference call by dialing 713-481-0095. Replays of the entire call will be available through March 3, 2006 at 973-341-3080, PIN# 6926200. The conference call will also be webcast and can be accessed through the Investor Relations section of the Bright Horizons Web site, www.brighthorizons.com. A copy of this press release is available on the Web site.

Bright Horizons Family Solutions is the world's leading provider of employer-sponsored child care, early education and work/life consulting services, managing 616 early care and family centers in the United States, the United Kingdom, Ireland and Canada. Bright Horizons serves more than 600 clients, including more than 90 FORTUNE 500 companies and 65 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) execute contracts relating to new commitments, 2) enroll families in new as well as existing centers, and 3) 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
                                             ------------------
                                      12/31/2005           12/31/2004
                                      ----------           ----------

Revenue                           $163,059     100.0%  $144,662     100.0%

Cost of services                   131,254      80.5%   119,580      82.7%
                                  --------  --------   --------  --------
Gross profit                        31,805      19.5%    25,082      17.3%

Selling, general and
 administrative expenses            14,727       9.0%    11,918       8.2%
Amortization                           714       0.5%       214       0.1%
                                  --------  --------   --------  --------


Income from operations              16,364      10.0%    12,950       9.0%

Net interest income                    133      0.1%       176        0.1%
                                  --------  --------   --------  --------

Income before income taxes          16,497      10.1%    13,126       9.1%

Income tax provision                (6,654)     -4.1%    (5,558)     -3.9%
                                  --------  --------   --------  --------

Net income                          $9,843       6.0%    $7,568       5.2%
                                  ========  ========   ========  ========

Per share data:
Net income per share - basic         $0.36                $0.28
                                  ========             ========
Weighted average number of common
 shares outstanding                 27,256               26,756
                                  ========             ========

Net income per share - diluted       $0.35                $0.27
                                  ========             ========
Weighted average number of common
and common equivalent shares        28,429               28,110
                                  ========             ========

Supplemental Information:

Earnings before interest, taxes,   $20,485              $16,201
 depreciation and
 amortization (EBITDA)(a)

Reconciliation of net
 income to EBITDA:

Net income, as reported             $9,843               $7,568
Add back income tax provision        6,654                5,558
Less net interest income              (133)                (176)
                                  --------             --------
Income from operations              16,364               12,950
Add back depreciation                3,407                3,037
Add back amortization                  714                  214
                                  --------             --------
EBITDA                             $20,485              $16,201


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

                                           Twelve months ended
                                           -------------------
                                    12/31/2005           12/31/2004
                                    ----------           ----------

Revenue                         $625,259    100.0%   $551,763    100.0%

Cost of services                 509,970     81.6%    459,810     83.3%
                                --------    -----    --------    -----
Gross profit                     115,289     18.4%     91,953     16.7%

Selling, general and
 administrative expenses          52,717      8.4%     44,188      8.0%
Amortization                       1,916      0.3%      1,012      0.2%
                                --------    -----    --------    -----
Income from operations            60,656      9.7%     46,753      8.5%

Net interest income                1,286      0.2%        343      0.0%
                                --------    -----    --------    -----
Income before income taxes        61,942      9.9%     47,096      8.5%

Income tax provision             (25,241)    -4.0%    (19,768)    -3.5%
                                --------    -----    --------    -----
Net income                       $36,701      5.9%    $27,328      5.0%
                                ========    =====    ========    =====

Per share data:
Net income per share -
 basic                             $1.35                $1.03
                                ========             ========
Weighted average number
 of common shares
 outstanding                      27,123               26,511
                                ========             ========

Net income per share - diluted     $1.29                $0.98
                                ========             ========
Weighted average number
 of common and common
 equivalent shares                28,392               27,846
                                ========             ========
Supplemental Information:

Earnings before interest,        $75,154              $59,110
 taxes, depreciation and
 amortization(EBITDA)(a)

Reconciliation of net
 income to EBITDA:
Net income, as reported          $36,701              $27,328
Add back income tax provision     25,241               19,768
Less net interest income          (1,286)                (343)
                                --------             --------
Income from operations            60,656               46,753
Add back depreciation             12,582               11,345
Add back amortization              1,916                1,012
                                --------             --------
EBITDA                           $75,154              $59,110


(a) 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.

Contact Information

  • INVESTOR CONTACT:
    Elizabeth Boland
    617-673-8000

    MEDIA CONTACT:
    Ilene Hoffer
    617-673-8000