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Bright Horizons Family Solutions Reports Third Quarter of 2019 Financial Results

October 30, 2019

WATERTOWN, Mass.--(BUSINESS WIRE)--Oct 30, 2019--

Bright Horizons Family Solutions ® Inc. (NYSE: BFAM), a leading provider of high-quality education and care solutions designed to help leading employers support employees across life and career stages, today announced financial results for the third quarter of 2019 and updated certain financial guidance for the full year 2019.

Third Quarter 2019 Highlights (compared to third quarter 2018):

Non-GAAP measures

“We are pleased to report strong financial results for the third quarter of 2019,” said Stephen Kramer, Chief Executive Officer. “Our full suite of solutions continues to be well received in the marketplace and reflects our commitment to providing high-quality, critical supports that are needed to maximize talent acquisition, retention and productivity in today’s competitive environment.”

“We are also honored once again to have been named one of Fortune magazine’s “Best Workplaces for Women.” This recognition personifies our commitment to creating an inclusive environment along with promotion of women into leadership and executive roles. We stand alongside many of our clients who are also leading the way in supporting women and working parents alike,” Kramer continued.

Third Quarter 2019 Results

Revenue increased $40.0 million, or 8%, in the third quarter of 2019 from the third quarter of 2018 on contributions from new and ramping full service child care centers, average price increases of 3% to 4%, and expanded sales and utilization of our back-up care and educational advisory services.

Income from operations was $62.6 million for the third quarter of 2019, an increase from $55.5 million in the same 2018 period. Increases in revenue and gross profit reflect contributions from enrollment gains in mature and ramping centers, new child care centers, as well as back-up care and educational advisory clients that have increased utilization levels or been added since the third quarter of 2018, efficiencies in service delivery across the expanding customer base, 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 $41.3 million for the third quarter of 2019 compared to net income of $33.6 million in the same 2018 period, an increase of $7.7 million, or 23%, primarily attributable to the expanded income from operations and a lower effective tax rate. Diluted earnings per common share was $0.69 for the third quarter of 2019 compared to $0.57 in the same 2018 period.

In the third quarter of 2019, adjusted EBITDA increased $9.5 million, or 11%, to $94.8 million, and adjusted income from operations increased $7.4 million, or 13%, to $62.8 million from the third quarter of 2018 due primarily to the expanded gross profit. Adjusted net income increased by $7.9 million, or 19%, to $50.8 million on the expanded income from operations. Diluted adjusted earnings per common share was $0.86 compared to $0.73 in the third quarter of 2018.

As of September 30, 2019, the Company had more than 1,100 client relationships with employers across a diverse array of industries and operated 1,083 child care and early education centers with the capacity to serve approximately 120,000 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, the excess of lease expense over cash lease 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, 2019, the Company generated approximately $272.4 million of cash from operations compared to $239.7 million for the same period in 2018, and invested $126.9 million in fixed assets, acquisitions, and other investments compared to $114.3 million for the same period in 2018. Net cash used in financing activities totaled $127.2 million in the nine months ended September 30, 2019 compared to $118.2 million for the same 2018 period. The Company reported cash and cash equivalents of $48.5 million as of September 30, 2019, a net increase of $33.1 million during the year.

2019 Outlook

As described below, the Company is updating certain financial guidance. For the full year 2019, the Company currently expects:

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 to discuss the third quarter 2019, the Company’s updated business outlook, its strategy and results. 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 20, 2019 at 1-844-512-2921, or, for international callers, 1-412-317-6671, conference ID #13685055. A link to the audio webcast of the conference call 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 forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, including statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, estimated effective tax rate and tax expense, estimates and impact of equity transactions and excess tax benefits, and our full year 2019 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; and other risks and uncertainties more fully described in the “Risk Factors” section of our Annual Report on Form 10-K filed February 27, 2019, and other factors disclosed from time to time in our 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

In addition to the results provided in accordance with U.S. generally accepted accounting principles (“GAAP”) throughout this press release, the Company has provided non-GAAP measurements - adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share - which present operating results on a basis adjusted for certain items. The Company uses these non-GAAP measures as key performance indicators for the purpose of evaluating performance internally, and in connection with determining incentive compensation for Company management, including executive officers. Adjusted EBITDA is also used in connection with the determination of certain ratio requirements under our credit agreement. We also believe these non-GAAP measures provide investors with useful information with respect to our historical operations. These non-GAAP measures are not intended to replace, and should not be considered superior to, the presentation of our financial results in accordance with GAAP. The use of the terms adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. Adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are reconciled from the respective measures under GAAP in the attached table “Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations.”

Guidance for non-GAAP financial measures excludes stock-based compensation, amortization of intangible assets, and transaction costs related to the completion of debt financing transactions and completed acquisitions, as well as tax effects associated with these items. These adjustments to net income and diluted earnings per common share in future periods are generally expected to be similar to the types of charges and costs excluded from adjusted net income and diluted adjusted earnings per common share in prior quarters, although we can provide no assurance as to the timing or magnitude of any such adjustments. The exclusion of these charges and costs in future periods will have an impact on the Company’s adjusted net income and diluted adjusted earnings per common share.

About Bright Horizons Family Solutions Inc.

Bright Horizons is trusted by employers and families around the world to provide care and education. Operating approximately 1,100 child care centers, Bright Horizons cares for approximately 120,000 children annually in the United States, the United Kingdom, the Netherlands, Canada and India. Used by more than 1,100 of the world’s best employers across industries, Bright Horizons back-up child and elder care, tuition program management, education advising, and student loan repayment programs support employees through every life and career stage, and help people succeed at work and at home. For more information, go to www.brighthorizons.com.

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)

 

 

Three Months Ended September 30,

 

2019

 

%

 

2018

 

%

Revenue

$

 

511,584

 

 

100.0

%

 

$

 

471,585

 

 

100.0

%

Cost of services

 

386,364

 

 

75.5

%

 

 

358,545

 

 

76.0

%

Gross profit

 

125,220

 

 

24.5

%

 

 

113,040

 

 

24.0

%

Selling, general and administrative expenses

 

53,964

 

 

10.5

%

 

 

49,427

 

 

10.5

%

Amortization of intangible assets

 

8,627

 

 

1.8

%

 

 

8,153

 

 

1.7

%

Income from operations

 

62,629

 

 

12.2

%

 

 

55,460

 

 

11.8

%

Interest expense — net

 

(10,955

)

 

(2.1

)%

 

 

(11,795

)

 

(2.5

)%

Income before income tax

 

51,674

 

 

10.1

%

 

 

43,665

 

 

9.3

%

Income tax expense

 

(10,420

)

 

(2.0

)%

 

 

(10,065

)

 

(2.2

)%

Net income

$

 

41,254

 

 

8.1

%

 

$

 

33,600

 

 

7.1

%

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Common stock — basic

$

 

0.71

 

 

 

 

$

 

0.58

 

 

 

Common stock — diluted

$

 

0.69

 

 

 

 

$

 

0.57

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Common stock — basic

 

57,935,118

 

 

 

 

 

57,719,730

 

 

 

Common stock — diluted

 

59,132,689

 

 

 

 

 

58,924,423

 

 

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)

 

 

Nine Months Ended September 30,

 

2019

 

%

 

2018

 

%

Revenue

$

 

1,541,402

 

 

100.0

%

 

$

 

1,424,941

 

 

100.0

%

Cost of services

 

1,149,614

 

 

74.6

%

 

 

1,072,320

 

 

75.3

%

Gross profit

 

391,788

 

 

25.4

%

 

 

352,621

 

 

24.7

%

Selling, general and administrative expenses

 

166,330

 

 

10.8

%

 

 

152,776

 

 

10.7

%

Amortization of intangible assets

 

25,086

 

 

1.6

%

 

 

24,477

 

 

1.7

%

Income from operations

 

200,372

 

 

13.0

%

 

 

175,368

 

 

12.3

%

Interest expense — net

 

(34,626

)

 

(2.2

)%

 

 

(35,459

)

 

(2.5

)%

Income before income tax

 

165,746

 

 

10.8

%

 

 

139,909

 

 

9.8

%

Income tax expense

 

(33,123

)

 

(2.2

)%

 

 

(28,585

)

 

(2.0

)%

Net income

$

 

132,623

 

 

8.6

%

 

$

 

111,324

 

 

7.8

%

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Common stock — basic

$

 

2.28

 

 

 

 

$

 

1.91

 

 

 

Common stock — diluted

$

 

2.24

 

 

 

 

$

 

1.88

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Common stock — basic

 

57,820,596

 

 

 

 

 

57,841,382

 

 

 

Common stock — diluted

 

58,941,612

 

 

 

 

 

59,044,561

 

 

 

 
 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

September 30, 2019

 

December 31, 2018

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

48,529

 

 

$

15,450

 

Accounts receivable — net

117,573

 

 

131,178

 

Prepaid expenses and other current assets

62,027

 

 

47,263

 

Total current assets

228,129

 

 

193,891

 

Fixed assets — net

601,168

 

 

597,141

 

Goodwill

1,371,905

 

 

1,347,611

 

Other intangibles — net

305,918

 

 

323,035

 

Operating lease right-of-use assets (1)

658,134

 

 

 

Other assets

45,972

 

 

62,628

 

Total assets

$

3,211,226

 

 

$

2,524,306

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

10,750

 

 

$

10,750

 

Borrowings under revolving credit facility

 

 

118,200

 

Accounts payable and accrued expenses

180,577

 

 

154,195

 

Current portion of operating lease liabilities (1)

80,905

 

 

 

Deferred revenue and other current liabilities

197,759

 

 

200,640

 

Total current liabilities

469,991

 

 

483,785

 

Long-term debt — net

1,030,254

 

 

1,036,870

 

Operating lease liabilities (1)

643,089

 

 

71,817

 

Deferred income taxes

73,831

 

 

71,306

 

Other long-term liabilities

99,566

 

 

81,051

 

Total liabilities

2,316,731

 

 

1,744,829

 

Total stockholders’ equity

894,495

 

 

779,477

 

Total liabilities and stockholders’ equity

$

3,211,226

 

 

$

2,524,306

 

(1)

The Company adopted Accounting Standards Codification No. 842, Leases (ASC 842), effective January 1, 2019. Upon adoption, the Company recognized operating lease right-of-use assets and liabilities for the rights and obligations created by lease arrangements. Lease obligations associated with deferred rent and lease incentives recorded under previous guidance were reclassified from other current liabilities and operating lease liabilities to the operating lease right-of-use assets. The Company adopted the new lease guidance using the modified retrospective approach and the transition method available in accordance with Accounting Standards Update 2018-11, Leases (Topic 842): Targeted Improvements, which provides the option to use the effective date as the date of initial application of the guidance. As a result, the comparative information for prior periods has not been adjusted and continues to be reported in accordance with the accounting standards in effect for those periods under the previously applicable guidance.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Nine Months Ended September 30,

 

2019

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income

$

 

132,623

 

 

$

 

111,324

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

80,427

 

 

 

75,146

 

Stock-based compensation expense

 

12,339

 

 

 

10,304

 

Deferred income taxes

 

4,085

 

 

 

(3,719

)

Other non-cash adjustments — net

 

66

 

 

 

3,286

 

Changes in assets and liabilities

 

42,890

 

 

 

43,355

 

Net cash provided by operating activities

 

272,430

 

 

 

239,696

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of fixed assets — net

 

(70,161

)

 

 

(62,549

)

Payments and settlements for acquisitions — net of cash acquired

 

(30,841

)

 

 

(51,744

)

Purchases of debt securities and other investments

 

(20,090

)

 

 

Purchase of equity method investment

 

(5,772

)

 

 

Net cash used in investing activities

 

(126,864

)

 

 

(114,293

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Revolving credit facility — net

 

(117,858

)

 

 

(33,100

)

Principal payments of long-term debt

 

(8,063

)

 

 

(8,063

)

Payments for debt issuance costs

 

 

 

(292

)

Purchase of treasury stock

 

(12,023

)

 

 

(85,725

)

Taxes paid related to the net share settlement of stock options and restricted stock

 

(6,531

)

 

 

(7,452

)

Proceeds from issuance of common stock upon exercise of options and restricted stock upon purchase

 

21,506

 

 

 

19,350

 

Payments of deferred and contingent consideration for acquisitions

 

(4,200

)

 

 

(2,965

)

Net cash used in financing activities

 

(127,169

)

 

 

(118,247

)

Effect of exchange rates on cash, cash equivalents and restricted cash

 

34

 

 

 

(271

)

Net increase in cash, cash equivalents and restricted cash

 

18,431

 

 

 

6,885

 

Cash, cash equivalents and restricted cash — beginning of period

 

38,478

 

 

 

36,570

 

Cash, cash equivalents and restricted cash — end of period

$

 

56,909

 

 

$

 

43,455

 

  

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

  

 

Full service
center-based
child care

 

Back-up
care

 

Educational
advisory
services

 

Total

  

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

  

Revenue

$

410,789

 

 

$

80,059

 

 

$

20,736

 

 

$

511,584

 

  

Income from operations

36,961

 

 

19,711

 

 

5,957

 

 

62,629

 

  

Adjusted income from operations (1)

37,154

 

 

19,711

 

 

5,957

 

 

62,822

 

  

 

 

 

 

 

 

 

 

  

Three Months Ended September 30, 2018

 

 

 

 

 

 

 

  

Revenue

$

387,048

 

 

$

66,484

 

 

$

18,053

 

 

$

471,585

 

  

Income from operations

34,006

 

 

16,941

 

 

4,513

 

 

55,460

 

  

Adjusted income from operations

34,006

 

 

16,941

 

 

4,513

 

 

55,460

 

 

(1)

 

 

Adjusted income from operations represents income from operations excluding expenses incurred in connection with completed acquisitions, which have been allocated to the full service center-based child care segment.

  

 

Full service
center-based
child care

 

Back-up
care

 

Educational
advisory
services

 

Total

  

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

  

Revenue

$

1,267,689

 

 

$

214,802

 

 

$

58,911

 

 

$

1,541,402

 

  

Income from operations

130,318

 

 

55,262

 

 

14,792

 

 

200,372

 

  

Adjusted income from operations (1)

130,511

 

 

55,695

 

 

14,792

 

 

200,998

 

  

 

 

 

 

 

 

 

 

  

Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

  

Revenue

$

1,193,794

 

 

$

179,985

 

 

$

51,162

 

 

$

1,424,941

 

  

Income from operations

115,857

 

 

47,207

 

 

12,304

 

 

175,368

 

  

Adjusted income from operations (2)

117,772

 

 

47,207

 

 

12,304

 

 

177,283

 

 

(1)

Adjusted income from operations represents income from operations excluding expenses incurred in connection with completed acquisitions, which have been allocated to the full service center-based child care and back-up care segments.

 

(2)

 

Adjusted income from operations represents income from operations excluding expenses incurred in connection with the May 2018 amendment to the credit agreement, the March 2018 secondary offering, and completed acquisitions, which have been allocated to the full service center-based child care segment.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

NON-GAAP RECONCILIATIONS

(In thousands, except share data)

(Unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Net income

$

 

41,254

 

 

$

 

33,600

 

 

$

 

132,623

 

 

$

 

111,324

 

Interest expense — net

 

10,955

 

 

 

11,795

 

 

 

34,626

 

 

 

35,459

 

Income tax expense

 

10,420

 

 

 

10,065

 

 

 

33,123

 

 

 

28,585

 

Depreciation

 

18,453

 

 

 

17,060

 

 

 

55,341

 

 

 

50,669

 

Amortization of intangible assets (a)

 

8,627

 

 

 

8,153

 

 

 

25,086

 

 

 

24,477

 

EBITDA

 

89,709

 

 

 

80,673

 

 

 

280,799

 

 

 

250,514

 

Additional Adjustments:

 

 

 

 

 

 

 

Non-cash operating lease expense (b)

 

136

 

 

 

829

 

 

 

718

 

 

 

1,055

 

Stock-based compensation expense (c)

 

4,721

 

 

 

3,715

 

 

 

12,339

 

 

 

10,304

 

Transaction costs (d)

 

193

 

 

 

 

 

626

 

 

 

1,915

 

Total adjustments

 

5,050

 

 

 

4,544

 

 

 

13,683

 

 

 

13,274

 

Adjusted EBITDA

$

 

94,759

 

 

$

 

85,217

 

 

$

 

294,482

 

 

$

 

263,788

 

 

 

 

 

 

 

 

 

Income from operations

$

 

62,629

 

 

$

 

55,460

 

 

$

 

200,372

 

 

$

 

175,368

 

Transaction costs (d)

 

193

 

 

 

 

 

626

 

 

 

1,915

 

Adjusted income from operations

$

 

62,822

 

 

$

 

55,460

 

 

$

 

200,998

 

 

$

 

177,283

 

 

 

 

 

 

 

 

 

Net income

$

 

41,254

 

 

$

 

33,600

 

 

$

 

132,623

 

 

$

 

111,324

 

Income tax expense

 

10,420

 

 

 

10,065

 

 

 

33,123

 

 

 

28,585

 

Income before income tax

 

51,674

 

 

 

43,665

 

 

 

165,746

 

 

 

139,909

 

Stock-based compensation expense (c)

 

4,721

 

 

 

3,715

 

 

 

12,339

 

 

 

10,304

 

Amortization of intangible assets (a)

 

8,627

 

 

 

8,153

 

 

 

25,086

 

 

 

24,477

 

Transaction costs (d)

 

193

 

 

 

 

 

626

 

 

 

1,915

 

Adjusted income before income tax

 

65,215

 

 

 

55,533

 

 

 

203,797

 

 

 

176,605

 

Adjusted income tax expense (e)

 

(14,367

)

 

 

(12,634

)

 

 

(46,679

)

 

 

(40,221

)

Adjusted net income

$

 

50,848

 

 

$

 

42,899

 

 

$

 

157,118

 

 

$

 

136,384

 

 

 

 

 

 

 

 

 

Weighted average number of common shares — diluted

 

59,132,689

 

 

 

58,924,423

 

 

 

58,941,612

 

 

 

59,044,561

 

Diluted adjusted earnings per common share

$

 

0.86

 

 

$

 

0.73

 

 

$

 

2.67

 

 

$

 

2.31

 

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

NON-GAAP RECONCILIATIONS

(In thousands, except share data)

(Unaudited)

 

 

Forward Guidance (h)

 

Year Ended
December 31, 2019

 

Low

 

High

Net income

$

 

175,000

 

 

$

 

176,300

 

Net income allocated to unvested participating shares

 

(800

)

 

 

(800

)

Income tax expense (f)

 

47,050

 

 

 

47,400

 

Income before income tax

 

221,250

 

 

 

222,900

 

Stock-based compensation expense (c)

 

17,500

 

 

 

17,500

 

Amortization of intangible assets (a)

 

33,500

 

 

 

34,000

 

Transaction costs (d)

 

600

 

 

 

600

 

Adjusted income before income tax

 

272,850

 

 

 

275,000

 

Tax impact on adjusted income before income tax (g)

 

(60,400

)

 

 

(61,000

)

Adjusted net income attributable to common stockholders

$

 

212,450

 

 

$

 

214,000

 

 

 

 

 

Per common share information:

 

 

 

Diluted earnings per common share

$

 

2.95

 

 

$

 

2.98

 

Income tax expense (f)

 

0.80

 

 

 

0.80

 

Income before income tax

 

3.75

 

 

 

3.78

 

Stock-based compensation expense (c)

 

0.30

 

 

 

0.30

 

Amortization of intangible assets (a)

 

0.57

 

 

 

0.58

 

Transaction costs (d)

 

0.01

 

 

 

0.01

 

Tax impact on adjusted income before income tax (g)

 

(1.02

)

 

 

(1.03

)

Diluted adjusted earnings per common share

$

 

3.61

 

 

$

 

3.64

 

(a)

 

Represents amortization of intangible assets, including approximately $4.8 million each quarter associated with intangible assets recorded in connection with our going private transaction in May 2008.

(b)

 

Represents the excess of lease expense over cash lease expense.

(c)

 

Represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation.

(d)

 

Represents transaction costs incurred in connection with completed acquisitions, the March 2018 secondary offering, and the May 2018 amendment to the credit agreement.

(e)

 

Represents income tax expense calculated on adjusted income before income tax at an effective tax rate of approximately 23% for both 2019 and 2018. The tax rate for 2019 represents a tax rate of approximately 26% applied to the expected adjusted income before income tax for the full year, less the estimated effect of excess tax benefits related to equity transactions for the full year. However, the timing and volume of the tax benefits associated with such future equity activity will affect these estimates and the estimated effective tax rate for the year.

(f)

 

Represents estimated income tax expense calculated using an effective tax rate of approximately 21% for the year ended December 31, 2019, based on projected income before income tax, less the estimated impact of excess tax benefits related to equity transactions, which the Company estimates in the range of $10 million to $11 million for the full year in 2019. However, the timing and volume of the tax benefits associated with such future equity activity will affect these estimates and the estimated effective tax rate for the year.

(g)

 

Represents estimated tax on adjusted income before income tax using an effective tax rate of approximately 22%.

(h)

 

Forward guidance amounts are estimated based on a number of assumptions and actual results could differ materially from the estimates provided herein.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191030006079/en/

CONTACT: Investors:

Elizabeth Boland

Chief Financial Officer - Bright Horizons

eboland@brighthorizons.com

617-673-8125

Michael Flanagan

Senior Director of Investor Relations - Bright Horizons

michael.flanagan@brighthorizons.com

617-673-8720

Kevin Doherty

Managing Director - Solebury Trout

kdoherty@soleburytrout.com

203-428-3233

Media:

Ilene Serpa

Vice President - Communications - Bright Horizons

iserpa@brighthorizons.com

617-673-8044

KEYWORD: MASSACHUSETTS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: PRESCHOOL FAMILY EDUCATION CONSUMER PARENTING CHILDREN BABY/MATERNITY

SOURCE: Bright Horizons Family Solutions Inc.

Copyright Business Wire 2019.

PUB: 10/30/2019 04:18 PM/DISC: 10/30/2019 04:18 PM

http://www.businesswire.com/news/home/20191030006079/en