Bright Horizons Family Solutions Reports Record Revenues and Earnings; Net Income Growth of 44% in the Quarter.NASHVILLE Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn.--(BUSINESS WIRE)--Feb. 22, 1999--Bright Horizons Family Solutions, Inc. (Nasdaq: BFAM BFAM Brother from Another Mother BFAM Bioinformatics for the Analysis of Mammalian Genomes BFAM Budget Formulation & Appropriation Model ) today announced financial results for the quarter and year ended December December: see month. 31, 1998. Bright Horizons Family Solutions Bright Horizons Family Solutions is a US-based child-care provider and one of the largest publicly held child-care corporations in the world. The result of a merger in 1998 between Massachusetts-based Bright Horizons commenced operations on July July: see month. 24, 1998, upon completion of the merger of Bright Horizons (formerly Nasdaq: BRHZ) and CorporateFamily Solutions (formerly Nasdaq: CFAM CFAM Cerebral Function Analysis Monitor CFAM Cash Flow After Marketing (costs; finance, accounting) CFAM Contingency Force Analysis Model (military simulation model) ). The merger has been accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and BFAM reports financial results on a calendar year basis. Revenues for the fourth quarter increased 17% to $55.0 million from $47.2 million for the quarter ended December 31, 1997. The fourth quarter of 1997 included fourteen weeks of operating results for CorporateFamily Solutions compared to thirteen weeks in the same period in 1998. Net income for the fourth quarter of 1998 increased 44% to $1.6 million, or $0.13 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $1.1 million, or $0.10 per diluted share, for the same prior year period. Revenues for the year ended December 31, 1998 rose 21% to $209.4 million from $172.6 million for the prior year. Net income for 1998, prior to non-recurring items, increased 74% to $5.9 million, or $0.47 per diluted share, from $3.4 million, or $0.36 per diluted share, for the year ended December 31, 1997. Including the effects of non-recurring items in both 1998 and 1997 ($5.4 million after tax, or $0.43 per diluted share, of merger costs in 1998 and $0.6 million after tax, or $0.07 per diluted share, of non-recurring items in 1997), the net income was $0.5 million for the year ended December 31, 1998, or $0.04 per diluted share, compared to net income of $2.8 million, or $0.30 per diluted share, for the year ended December 31, 1997. "The fourth quarter results reflect the continued demand we are experiencing for our services," commented Chief Executive Officer Marguerite Marguerite, for French women thus named, use Margaret Marguerite. For French women thus named, use Margaret. marguerite, in botany marguerite: see daisy. Sallee sallee Austral 1. a SE Australian eucalyptus with a pale grey bark 2. an acacia tree . "We ended the year with 274 centers under management, opening nine new centers and closing four centers in the fourth quarter. The addition of 29 net new centers in 1998, together with continued growth in existing centers, were primarily responsible for the record level of revenues and profits. Among the centers we opened in the fourth quarter were additional centers for several existing clients, including second centers for Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. and Household International, the sixth center for Citigroup Citigroup U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. and the eighth center for Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. . The increasing number of clients opening multiple centers across the country is confirmation that employers see real value in offering child care at the workplace." President Roger Brown stated, "Our growth in net income reflects our ability to maintain center margins in a difficult labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience . Additionally, we were able to effectively control our overhead costs overhead costs see fixed costs. to produce better operating and net income margins." Sallee continued, "We are pleased with the successful integration of the companies following the merger in July. We have positioned the organization to provide outstanding support to our clients and the families we serve as well as to take advantage of the market opportunity. As a result of the merger, we are well positioned for further profitable growth and a successful 1999." Bright Horizons Family Solutions is the nation's leading provider of employer-sponsored child care, early education and work/life consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . The company manages 274 family centers for more than 220 clients in 35 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Among Bright Horizons Family Solutions' clients are many of the nation's leading companies, including 68 Fortune 500 companies and 44 of the "100 Best Companies for Working Mothers," as recognized by Working Mother magazine. Visit the newly redesigned Bright Horizons Family Solutions Website at www.brighthorizons.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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 "Risk Factors" section in the Registration Statement on Form S-4 dated June June: see month. 17, 1998. -0-
Bright Horizons Family Solutions
Selected Financial Information
(Unaudited)
(in thousands except per share data)
Three months ended
------------------
12/31/98 12/31/97
-------- --------
Revenues $55,036 100.0% $47,160 100.0%
Cost of services 47,495 86.3% 40,887 86.7%
-------------------------------
Gross profit 7,541 13.7% 6,273 13.3%
Selling, general and
administrative expenses 4,878 8.9% 4,385 9.3%
Amortization 187 0.3% 235 0.5%
-------------------------------
Income from operations 2,476 4.5% 1,653 3.5%
Net interest income 275 0.5% 241 0.5%
-------------------------------
Income before income taxes 2,751 5.0% 1,894 4.0%
Income tax provision (1,120) -2.0% (765) -1.6%
-------------------------------
Net income before preferred
stock dividends and accretion on
redeemable common stock (1) $1,631 3.0% $1,129 2.4%
===============================
Net income available to
common shareholders (1) $1,631 $1,129
======== ========
Per share data:
---------------
Net income per share - diluted -
before preferred dividends and
redeemable common stock accretion $0.13 $0.10
======== ========
Weighted average number of common
and common equivalent shares, assu-
ming conversion of preferred stock (1) 12,473 11,575
======== ========
(1) In connection with BRHZ and CFAM initial public offerings
completed in November 1997 and August 1997, respectively,
preferred stock and related accumulated dividends, as well as
redeemable common stock and related accretion, were converted to
common stock.
Twelve months ended
-------------------
12/31/98 12/31/97
-------- --------
Revenues $209,372 100.0% $172,555 100.0%
Cost of services 180,770 86.3% 149,312 86.5%
---------------------------------
Gross profit 28,602 13.7% 23,243 13.5%
Selling, general and
administrative expenses 18,972 9.1% 16,299 9.5%
Amortization 893 0.4% 1,056 0.6%
Merger costs (3) 7,500 3.6% - -
Other non-recurring costs (4) - - 840 0.5%
---------------------------------
Income from operations 1,237 0.6% 5,048 2.9%
Net interest income (expense) 1,210 0.6% (44) 0.0%
---------------------------------
Income before income taxes 2,447 1.2% 5,004 2.9%
Income tax provision (1,973) -1.0% (2,243) -1.3%
---------------------------------
Net income before preferred
stock dividends and
accretion on redeemable
common stock (2) $474 0.2% $2,761 1.6%
=================================
Net income available to
common shareholders (2) $474 $1,844
========= =========
Per share data:
---------------
Net income per share - diluted -
before preferred dividends and
redeemable common stock accretion $0.04 $0.30
========= =========
Weighted average number of common
and common equivalent shares,
assuming conversion of preferred
stock (2) 12,411 9,293
========= =========
Pro forma net income excluding
non-recurring charges (3) (4) $5,868 $3,378
========= =========
Pro forma net income per
share - diluted $0.47 $0.36
========= =========
Weighted average number of common
and common equivalent shares 12,411 9,293
========= =========
(2) In connection with BRHZ and CFAM initial public offerings
completed in November 1997 and August 1997, respectively,
preferred stock and related accumulated dividends, as well as
redeemable common stock and related accretion, were converted to
common stock.
(3) In July 1998, the Company completed its previously announced
merger of CFAM and BRHZ. Costs associated with the merger have
been included as a charge in the operating results of the third
quarter of 1998.
(4) In the third quarter of 1997, restrictions on common stock held by
an officer of the Company were removed, resulting in a non-cash
compensation charge. In the second quarter of 1997, BRHZ incurred
costs of $543,000 associated with a proposed public offering of
securities. Because the offering was delayed, the amounts incurred
were treated as a period cost.
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