SOURCE: Bright Horizons Family Solutions

February 15, 2007 16:01 ET

Bright Horizons Family Solutions Reports Fourth Quarter 2006 Financial Results

BOSTON, MA -- (MARKET WIRE) -- February 15, 2007 --Bright Horizons Family Solutions, Inc. (NASDAQ: BFAM) today announced financial results for the fourth quarter ended December 31, 2006.

Earnings per diluted share of $0.41 in the quarter ended December 31, 2006 increased 17% from $0.35 per diluted share for the quarter ended December 31, 2005. Revenue for the fourth quarter of 2006 increased 11% to $181.3 million from $163.1 million for the same quarter last year. Net income for the fourth quarter of 2006 increased 11% to $11.0 million from $9.8 million in the fourth quarter of 2005.

Earnings per diluted share of $1.52 for the year ended December 31, 2006 increased 18% from $1.29 per diluted share for the year ended December 31, 2005. Revenue for the full year 2006 increased 12% to $697.9 million from $625.3 million for the same period last year. Net income for the year increased 14% to $41.7 million from $36.7 million in 2005.

In conjunction with the January 1, 2006 adoption of Statement of Financial Accounting Standard No. 123R, which resulted in the expensing of stock-based compensation costs, earnings per diluted share decreased by approximately $0.02 and $0.07, respectively, for the fourth quarter and year-to-date 2006.

"We again delivered strong operating and financial results in 2006," commented David Lissy, Chief Executive Officer. Bright Horizons added 15 new centers in the fourth quarter of 2006. New additions in the quarter included second centers for Procter & Gamble and the FDIC, along with new centers for Norfolk Southern, the Francis Institute at Penn Valley Community College, and Becker+Becker, as well as eight new consortium models to its network in the U.S. and the UK. The Company closed two centers in the quarter and, as of December 31, 2006, operated 642 early education and family centers with the capacity to serve more than 69,000 children and families.

"With our continued growth we have also delivered on our goal of achieving consistent improvement in our financial results, which in turn enables us to enhance the quality of the education and service we deliver to the children, families, and clients we serve," continued Lissy. "This is all made possible by the talent, passion, and dedication of the thousands of members of the Bright Horizons family throughout our network who shape our reputation every day in our centers, schools, and work sites around the world. I am very proud that this past January, Bright Horizons was again selected as one of FORTUNE magazine's '100 Best Companies to Work for' in America for the eighth time, and was named earlier in 2006 for the first time as one of the 50 '2006 Best Workplaces in the UK' by the Financial Times."

"In addition to expanding our family of centers, in 2006 we added valuable breadth and depth to our suite of service offerings to employer clients with two strategic moves," said Lissy. "In July, we launched our new Back-Up Care Advantage program, providing employers and working families with access to a high-quality network of back-up services for both center-based and in-home child care and elder care. This past September we acquired College Coach -- expanding the scope of our employer-based services to include solutions to address the complicated process of college admissions and counseling. Together, these new services position us well for the future to leverage our standing as the partner of choice for employers who aim to help their working families be more productive by fostering a healthy integration between work and life."

Bright Horizons Family Solutions will host an investor conference call today at 4:30 p.m. ET. The public is invited to listen to the conference call by dialing 913-981-5523 and entering conference ID# 7354961. Replays of the entire call will be available through Friday, March 2, 2007 at 719-457-0820, PIN# 7354961. 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 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 70 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
                                ------------------------------------------
                                     12/31/2006            12/31/2005
                                --------------------  --------------------

Revenue                         $ 181,295      100.0% $ 163,059      100.0%

Cost of services                  144,529       79.7%   131,254       80.5%
                                ---------  ---------  ---------  ---------
Gross profit                       36,766       20.3%    31,805       19.5%

Selling, general and
 administrative expenses           16,948        9.4%    14,727        9.0%
Amortization                        1,158        0.6%       714        0.5%
                                ---------  ---------  ---------  ---------

Income from operations             18,660       10.3%    16,364       10.0%

Net interest (expense) income        (436)      -0.2%       133        0.1%
                                ---------  ---------  ---------  ---------

Income before income taxes         18,224       10.1%    16,497       10.1%

Income tax provision               (7,265)      -4.1%    (6,654)      -4.1%
                                ---------  ---------  ---------  ---------

Net income                      $  10,959        6.0% $   9,843        6.0%
                                =========  =========  =========  =========

Per share data:
Net income per share - basic    $    0.42             $    0.36
                                =========             =========
Weighted average number of
 common shares outstanding         26,037                27,256
                                =========             =========

Net income per share - diluted  $    0.41             $    0.35
                                =========             =========
Weighted average number of
 common and common equivalent
 shares                            27,027                28,429
                                =========             =========

Supplemental Information:

Earnings before interest,
 taxes, depreciation and
 amortization (EBITDA)(a)       $  24,017             $  20,497

Reconciliation of net income to
 EBITDA:
Net income, as reported         $  10,959             $   9,843
Add back income tax provision       7,265                 6,654
Add back net interest expense
 (income)                             436                  (133)
                                ---------             ---------
Income from operations             18,660                16,364
Add back depreciation               4,199                 3,419
Add back amortization               1,158                   714
                                ---------             ---------
EBITDA                          $  24,017             $  20,497

(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
                                ------------------------------------------
                                     12/31/2006            12/31/2005
                                --------------------  --------------------

Revenue                         $ 697,865      100.0% $ 625,259      100.0%

Cost of services                  559,591       80.2%   509,970       81.6%
                                ---------  ---------  ---------  ---------
Gross profit                      138,274       19.8%   115,289       18.4%

Selling, general and
 administrative expenses           63,235        9.1%    52,717        8.4%
Amortization                        3,376        0.4%     1,916        0.3%
                                ---------  ---------  ---------  ---------

Income from operations             71,663       10.3%    60,656        9.7%

Net interest (expense) income        (396)      -0.1%     1,286        0.2%
                                ---------  ---------  ---------  ---------
Income before income taxes         71,267       10.2%    61,942        9.9%

Income tax provision              (29,544)      -4.2%   (25,241)      -4.0%
                                ---------  ---------  ---------  ---------

Net income                      $  41,723        6.0% $  36,701        5.9%
                                =========  =========  =========  =========

Per share data:
Net income per share - basic    $    1.58             $    1.35
                                =========             =========
Weighted average number of
 common shares outstanding         26,338                27,123
                                =========             =========

Net income per share - diluted  $    1.52             $    1.29
                                =========             =========
Weighted average number of
 common and common equivalent
 shares                            27,391                28,392
                                =========             =========

Supplemental Information:

Earnings before interest,
 taxes, depreciation and
 amortization (EBITDA)(a)       $  90,514             $  75,166


Reconciliation of net income to
 EBITDA:
Net income, as reported         $  41,723             $  36,701
Add back income tax provision      29,544                25,241
Add back net interest expense
 (income)                             396                (1,286)
                                ---------             ---------
Income from operations             71,663                60,656
Add back depreciation              15,475                12,594
Add back amortization               3,376                 1,916
                                ---------             ---------
EBITDA                          $  90,514             $  75,166

(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 Serpa:
    617-673-8000