Printer Friendly

LPA Holdings Corporation Announces Fiscal Year Earnings; A Transitional Year in Which Unprofitable Schools are Closed, Standards Enhanced.

Business Editors

OVERLAND PARK, Kan.--(BUSINESS WIRE)--Sept. 19, 2000

LPA Holdings Corporation, a privately held firm allied with Chase Capital Partners, a division of Chase Manhattan Bank, has completed a year of streamlining, re-evaluation and a commitment to higher standards for schools and employees in order to better serve its customers -- parents and children.

LPA's major operating unit, La Petite Academy, Inc. is the nation's largest privately held early childhood education company with approximately 752 Academies in 35 states and the District of Columbia. Under the La Petite Academy, Inc. umbrella, the Montessori Unlimited preschool represents the largest, most consistent chain of schools offering the Montessori approach to learning.

On June 10, 1999, La Petite Academy changed its fiscal year to be the period starting on the first Sunday in July and ending on the first Saturday in July in the subsequent year. For comparative purposes, the information presented in this release (except for the net loss comparison) discusses the results of 52 weeks ended July 1, 2000 and the results of the 52 weeks ended July 3, 1999 (herein referred to as the 2000 year and the 1999 year).

Although LPA's fiscal 2000 operating revenue grew by $42.3 million or 13 percent to $371.0 million, this was offset by increased operating expenses, including a $7.5 million charge to close certain underperforming schools. LPA Holdings Corporation therefore announced a net loss for fiscal 2000 of $(10.6) million compared to $(.8) million for fiscal 1999.

The increase in operating revenue includes $24.0 million from the acquired Bright Start schools, $13.9 million of incremental revenue from established schools, $10.9 million of incremental revenue from new schools offset by $6.5 million reduced revenue from closed schools. Tuition revenue increased 13.2 percent during the 2000 year as compared to the 1999 year. The increase in tuition revenue reflects an increase in full time equivalent ("FTE") attendance of 7.5 percent and an increase of average weekly FTE tuition rates of 5.7 percent. During fiscal 2000, La Petite Academy opened 16 new schools, acquired 43 schools and closed 50 schools.

In the third quarter of 2000, management committed to a plan to close certain schools located in areas where the demographic conditions no longer support an economically viable operation and to restructure its operating management to better serve remaining schools. Accordingly, La Petite Academy recorded a $7.5 million restructuring charge to provide for costs associated with the school closures and restructuring. The charge includes the present value of rent and real estate taxes, net of anticipated sublease income, the write-down of fixed assets to fair market value, the write-off of assigned goodwill, and other

restructuring costs related to the closures. During fiscal 2000, 39 schools were closed pursuant to this plan. Subsequent to the end of the fiscal year in July 2000, four additional schools have closed in connection with the restructuring plan.

Operating income was $5.1 million for the 2000 year as compared to $18.4 million for the 1999 year. The decline in operating income is principally due to higher costs and the restructuring charge offsetting increased revenue. La Petite Academy experienced higher costs for salaries, wages and benefits, facility lease payments and other operating expenses. The increased costs were attributable to the addition of the Bright Start schools, the opening of new schools, a 1.3 percent increase in labor hours and a seven percent increase in average hourly rates.

Earnings before restructuring charges, interest, taxes, depreciation and amortization ("EBITDA") were $28.9 million for fiscal 2000 as compared to $33.7 million for the 1999 year. The decline in EBITDA is due to higher costs offsetting increased revenue.

Net loss for the twelve weeks ended July 1, 2000, was $(.8) million compared to net income of $.5 million during the twelve weeks ended July 3, 1999. The reduced income was due to higher Operating revenue offset by higher Operating expenses and higher Interest expense.

Operating revenue was $90.3 million for the 12 weeks ended July 1, 2000, an increase of $9.4 million or 11.6 percent over the 12 weeks ended July 3, 1999. The increase in operating revenue includes $4.1 million from the acquired Bright Start schools, $4.6 million of incremental revenue from established schools, $3.6 million of incremental revenue from new schools, offset by $2.9 million reduced revenue from closed schools and adjustments. Tuition revenue increased 13.2 percent during the 12 weeks ended July 1, 2000, as compared to the 12 weeks ended July 3, 1999. The increase in tuition revenue reflects an increase in FTE attendance of 4.2 percent and an increase of the average weekly FTE tuition rates of 6.2 percent. During the 12 weeks ended July 1, 2000, La Petite Academy closed 39 schools in connection with the announced restructuring plan.

Operating income for the 12 weeks ended July 1, 2000, was $4.5 million, a decrease of $1.1 million or 19.9 percent as compared to the 12 weeks ended July 3, 1999.
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Geographic Code:1USA
Date:Sep 19, 2000
Words:851
Previous Article:Ault Incorporated Announces Major Contract With Leading Chinese Telecommunications Company.
Next Article:USGenNE Outlook Revised to Negative.
Topics:


Related Articles
Building solidarity.
New Jersey public accountant to head NASBA.
Lots of New Equipment For Open Molding.
New Pultrusion Lubricant Is Compatible with LPA.
Examining language proficiency of teacher candidates--a critical issue in teacher preparedness. (Language Teaching & Learning).
OFF WITH A BANG; COLLEGE BEGINS, FOR BETTER OR FOR WORSE.
CITY HALL DESIGNER LIST CUT; WESTLAKE VILLAGE TO PICK ARCHITECT FOR NEW MUNICIPAL COMPLEX.
FIRMS TO LEAD TOURS IN RIVALRY TO DESIGN CITY BUILDINGS; WESTLAKE VILLAGE OFFICIALS TO EXAMINE ARCHITECTS' WORK.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters