Bright Horizons Family Solutions Reports 27% Growth in Net Income; Achieves 300 Center Threshold With New Center Opening for Motorola.

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Feb. 17, 2000

Bright Horizons Family Solutions, Inc. (Nasdaq: BFAM) today announced financial results for the quarter and twelve months ended December 31, 1999.

Net income for the fourth quarter of 1999 increased 27% to $2.1 million, or $0.17 per diluted share, from $1.6 million, or $0.13 per diluted share, in the quarter ended December 31, 1998. Revenues for the current period increased 14% to $62.7 million from $55.0 million for the quarter ended December 31, 1998.

For the year ended December 31, 1999 net income increased 35% to $7.9 million, or $0.63 per diluted share, from $5.9 million, or $0.47 per diluted share, for the year ended December 31, 1998, excluding the effects of non-recurring merger costs in 1998. Revenues for the year increased 16% to $243.3 million from $209.4 million for the year ended December 31, 1998.

&uot;We are all extremely proud and excited by the progress that we've made this past year&uot;, said Roger Brown, President and Chief Executive Officer. &uot;We continue to invest aggressively in our people and our programs,&uot; Brown explained, &uot;as evidenced by the development and rollout of the state-of-the-art World at Their Fingertips curriculum and our commitment to NAEYC accreditation for all of our centers. We believe that we continue to strengthen our position as the employer of choice for early childhood educators. With the support of our clients, we achieved 97.8% parent satisfaction results this year, demonstrating the power of worksite child development and family centers to enrich the lives of children and their employee parents.&uot;

&uot;We opened nine new centers this quarter,&uot; Brown continued, &uot;including number 300, the eleventh center for Motorola, which is our largest single corporate sponsor. Motorola is now the world's largest corporate provider of workplace child care. We see strong demand as evidenced by continued growth in our pipeline of committed family centers,&uot; said Brown, &uot;During this past quarter we opened new centers for CDW, Warner Lambert, Citigroup and Chase Manhattan Bank, along with new commitments from Booz, Allen &Hamilton; Merck; Prudential; Georgia Pacific and Deutsche Bank, which will be the first back-up center in the Southeastern United States.&uot;

&uot;Another bright spot for us this year was the success of our consulting practice,&uot; said Brown, &uot;We have had the opportunity to help leading multinational employers examine the full array of issues and options around work/life balance and productivity. It has been particularly exciting this year to include Microsoft, Ford Motor Company, Unisys, Charles Schwab, Bayer and Eli Lilly among our client list, and to expand the scope of our projects internationally to Europe and Latin America.&uot;

During 1999, the Company repurchased a total of 495,000 shares, at an average price of $14.31 per share. The Board of Directors has authorized the repurchase of up to 1,250,000 shares. The actual number of shares purchased from time to time in accordance with applicable laws in open market or privately negotiated transactions, the timing of purchases and the prices paid will depend on future market conditions. The shares repurchased will be available for use under the Company's Stock Option Plan and other corporate purposes to minimize dilution to existing shareholders.

Bright Horizons Family Solutions is the nation's leading provider of employer-sponsored child care, early education and work/life consulting services. The company was recently honored by the Child Care Action Campaign and the Chicago Metropolitan Association for the Education of Young Children for its pioneering role in improving the quality of child care in the nation and for demonstrating that corporate sponsored child care programs are good for business and families. The company manages 300 family centers for more than 220 clients in 34 states and the District of Columbia. Among Bright Horizons Family Solutions' clients are many of the nation's leading companies, including 68 Fortune 500 companies and 42 of the &uot;100 Best Companies for Working Mothers,&uot; as recognized by Working Mother magazine. Bright Horizons Family Solutions commenced operations on July 24, 1998, upon completion of the merger of Bright Horizons (formerly Nasdaq: BRHZ) and CorporateFamily Solutions (formerly Nasdaq: CFAM). Visit the Bright Horizons Family Solutions website at www.brighthorizons.com.

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 that are discussed in detail in the Company's filings with the Securities and Exchange Commission, including the &uot;Risk Factors&uot; section in the Company's Annual Report on Form 10-K for the year ended December 31, 1998.

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

                                          Three months ended
                                      12/31/99           12/31/98

Revenues                         $62,730   100.0%  $55,036    100.0%
Cost of services                  53,674    85.6%   47,495     86.3%
Gross profit                       9,056    14.4%    7,541     13.7%
Selling, general and
 administrative expenses           5,337     8.5%    4,878      8.9%
Amortization                         238     0.3%      187      0.3%
Income from operations             3,481     5.6%    2,476      4.5%
Net interest income                  148     0.2%      275      0.5%
Income before income taxes         3,629     5.8%    2,751      5.0%
Income tax provision              (1,562)   -2.5%   (1,120)    -2.0%
Net income                        $2,067     3.3%   $1,631      3.0%


Per share data:
Net income per share - basic       $0.18             $0.14
Weighted average number
 of common
 shares outstanding               11,795            11,388
Net income per share - diluted     $0.17             $0.13
Weighted average number of
  common and
  common equivalent shares        12,252            12,473

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

                                         Twelve months ended
                                    12/31/99              12/31/98

Revenues                      $243,290   100.0%  $209,372      100.0%
Cost of services               208,631    85.8%   180,770       86.3%
Gross Profit                    34,659    14.2%    28,602       13.7%
Selling, general and
 administrative expenses        20,903     8.6%    18,972        9.1%
Amortization                       913     0.3%       893        0.4%
Other charges (1)                 --       0.0%     7,500        3.6%
Income from operations          12,843     5.3%     1,237        0.6%
Net interest income                715     0.3%     1,210        0.6%
Income before income taxes      13,558     5.6%     2,447        1.2%
Income tax provision            (5,631)   -2.3%    (1,973)      -1.0%
Net income                      $7,927     3.3%      $474        0.2%

Per share data:
Net income per share - basic     $0.66              $0.04
Weighted average
  number of common
  shares outstanding            11,945             11,172
Net income per share - diluted   $0.63              $0.04
Weighted average number
  of common and
  common equivalent shares      12,586             12,411
Pro forma information:
Pro forma net income excluding
 non-recurring item             $7,927             $5,868
Pro forma net income
 per share - diluted             $0.63              $0.47
Weighted average number
  of common and
  common equivalent shares      12,586             12,411

(1) In July 1998, the Company completed its previously announced
merger between CFAM and BRHZ. Costs associated with the merger have
been included as a charge in the operating results of the third
quarter of 1998.