*DJ Bright Horizons Family 3Q Net $33.6M >BFAM

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

November 01, 2018 16:20 ET (20:20 GMT)

*DJ Bright Horizons Family 3Q Rev $471.6M >BFAM

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

November 01, 2018 16:20 ET (20:20 GMT)

Press Release: Bright Horizons Family Solutions Reports Third Quarter of 2018 Financial Results

Bright Horizons Family Solutions Reports Third Quarter of 2018 Financial Results

WATERTOWN, Mass.--(BUSINESS WIRE)--November 01, 2018--

Bright Horizons Family Solutions(R) Inc. (NYSE: BFAM), a leading provider of high-quality child care, early education and other services designed to help employers and families better address the challenges of work and family life, today announced financial results for the third quarter of 2018 and updated certain financial guidance for the full year 2018.

Third Quarter 2018 Highlights (compared to third quarter 2017):

-- Revenue increased 9% to $472 million

-- Income from operations increased 23% to $55 million

-- Net income increased 8% to $34 million and diluted earnings per common
share increased 12% to $0.57

Non-GAAP measures

-- Adjusted income from operations* increased 14% to $55 million

-- Adjusted EBITDA* increased 11% to $85 million

-- Adjusted net income* increased 16% to $43 million and diluted adjusted
earnings per common share* increased 18% to $0.73

"We are pleased to report strong financial results for the third quarter of 2018," said Stephen Kramer, Chief Executive Officer. "Bright Horizons continues to lead our field in creating innovative solutions for employers, and in delivering high quality care to hundreds of thousands of children, working parents and adult learners every day," said Kramer. "We are also very proud to have been named one of Fortune magazine's "Best Workplaces for Women." Supporting women is essential to our culture, our growth and the organizations we serve, and this recognition is a testament to our own commitment to be a great place to work."

Third Quarter 2018 Results

Revenue increased $38.3 million, or 9%, in the third quarter of 2018 from the third quarter of 2017 on contributions from new and ramping full service child care centers, average price increases of 3-4%, and expanded sales of our back-up dependent care and educational advisory services.

Income from operations was $55.5 million for the third quarter of 2018, an increase from $45.0 million in the same 2017 period. Increases in revenue and gross profit reflect contributions from enrollment gains in mature and ramping centers, new child care centers, back-up dependent care and educational advisory clients that have increased utilization levels or been added since the third quarter of 2017, and strong cost management. These gains were partially offset by investments in marketing and technology to support our customer user experience, service delivery and operating efficiency, and costs incurred during the pre-opening and ramp-up phase of newer lease/consortium centers. Net income was $33.6 million for the third quarter of 2018 compared to net income of $31.1 million in the same 2017 period, an increase of $2.5 million, or 8%, attributable to expanded income from operations, offset by a higher effective tax rate primarily due to the one-time benefit associated with the final disposition of our investment in Ireland during the third quarter of 2017. Diluted earnings per common share was $0.57 for the third quarter of 2018 compared to $0.51 in the same 2017 period.

In the third quarter of 2018, adjusted EBITDA increased $8.6 million, or 11%, to $85.2 million, and adjusted income from operations increased $6.8 million, or 14%, to $55.5 million, from the third quarter of 2017 due primarily to the expanded gross profit. Adjusted net income increased by $5.8 million, or 16%, to $42.9 million on the expanded income from operations and a lower effective tax rate. Diluted adjusted earnings per common share was $0.73 compared to $0.62 in the third quarter of 2017.

As of September 30, 2018, the Company operated 1,071 child care and early education centers with the capacity to serve 118,300 children and their families.

*Adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are non-GAAP measures. Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, straight line rent expense, stock-based compensation expense, and transaction costs. Adjusted income from operations represents income from operations before transaction costs. Adjusted net income represents net income determined in accordance with GAAP, adjusted for stock-based compensation expense, amortization expense, transaction costs and the income tax provision (benefit) thereon. Diluted adjusted earnings per common share is a non-GAAP measure, calculated using adjusted net income. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in "Presentation of Non-GAAP Measures" and the attached table "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations."

Balance Sheet and Cash Flow

For the nine months ended September 30, 2018, the Company generated approximately $239.7 million of cash flows from operations compared to $213.0 million for the same 2017 period and invested $114.3 million in fixed assets and acquisitions compared to $80.6 million in the same 2017 period. Net cash used in financing activities totaled $118.2 million in the nine months ended September 30, 2018 compared to $95.1 million for the same 2017 period. The Company reported a net reduction in cash and cash equivalents of $1.9 million to $21.3 million as of September 30, 2018.

2018 Outlook

As described below, the Company is updating certain financial guidance. For the full year 2018, the Company currently expects:

-- Revenue growth in 2018 in the range of 8-10%

-- Net income in the range of $150 million to $151 million and diluted
earnings per common share in the range of $2.53 to $2.55

-- Adjusted net income in the range of $185 million to $186 million and
diluted adjusted earnings per common share in the range of $3.14 to $3.16

-- Diluted weighted average shares of approximately 59 million shares

For a reconciliation of the non-GAAP measures to their most directly comparable GAAP measure, refer to the attached table "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations."

Conference Call

Bright Horizons Family Solutions will host an investor conference call today at 5:00 pm ET. Interested parties are invited to listen to the conference call by dialing 1-877-407-9039 or, for international callers, 1-201-689-8470, and asking for the Bright Horizons Family Solutions conference call moderated by Chief Executive Officer Stephen Kramer. Replays of the entire call will be available through November 22, 2018 at 1-844-512-2921 or, for international callers, 1-412-317-6671, conference ID #13678192. The webcast of the conference call, including replays, and a copy of this press release are also available through the Investor Relations section of the Company's web site, www.brighthorizons.com.

Forward-Looking Statements

This press release includes statements that express the Company's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements." The Company's actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms "believes," "expects," "may," "will," "should," "seeks," "projects," "approximately, " "intends," "plans," "estimates" or "anticipates," or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth plan, strategies, our service offerings, our clients, estimated effective tax rate, estimates and impact of recently enacted tax legislation and excess tax benefits, our investments, and our 2018 financial guidance. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company believes that these risks and uncertainties include, but are not limited to, changes in the demand for child care and other dependent care services, including variation in enrollment trends and lower than expected demand from employer sponsor clients; the possibility that acquisitions may disrupt our operations and expose us to additional risk; our ability to pass on our increased costs; our indebtedness and the terms of such indebtedness; our ability to withstand seasonal fluctuations in the demand for our services; our ability to implement our growth strategies successfully; the impact of recently enacted tax legislation; and other risks and uncertainties more fully described in the "Risk Factors" section of our Annual Report on Form 10-K filed February 28, 2018, and other filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

Presentation of Non-GAAP Measures

(MORE TO FOLLOW) Dow Jones Newswires

November 01, 2018 16:20 ET (20:20 GMT)