Bright Horizons Family Solutions LLC Enters into an Incremental Joinder to Credit Agreement
Dec 9 14
On December 9, 2014, Bright Horizons Family Solutions LLC entered into an incremental joinder to credit agreement, by and among the borrower, the lenders and additional lenders party thereto and Goldman Sachs Bank USA, as administrative agent. The incremental joinder supplements and amends the borrower's credit agreement, dated as of January 30, 2013, by and among the borrower, Bright Horizons Capital Corp., Goldman Sachs Bank USA, as administrative agent, Swing Line Lender and L/C Issuer, the lenders and other parties party thereto from time to time. The incremental joinder provides for, among other things, new term B-1 loans in an aggregate principal amount of $165.0 million, which were fully drawn by the borrower on December 9, 2014. The proceeds of the term B-1 loans will be used for general corporate purposes, including to pay fees and expenses related to the transactions and to fund share repurchases by the company. The term B-1 loans bear interest at a rate per annum ranging from 225 to 250 basis points over the base rate or 325 to 350 basis points over the Eurocurrency rate as defined in the credit agreement. The base rate is the highest of the prime rate of Goldman Sachs Bank USA, the federal funds effective rate plus 0.50% and the Eurocurrency rate with a one month interest period plus 1.00%. The Eurocurrency rate option is the one, two, three or six month LIBOR rate, as selected by the borrower, or, with the approval of the applicable lenders, the nine, twelve or less than one month LIBOR rate. Consistent with the existing term B loans, with respect to the term B-1 loans, the base rate is subject to an interest rate floor of 2.00% and the Eurocurrency rate is subject to an interest rate floor of 1.00%. Consistent with the term B loans, the term B-1 loans will mature on January 30, 2020 and will amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal of the term B-1 loans. Voluntary prepayments of term B-1 loans in connection with certain reprising transactions on or prior to the date that is six months after the closing date will be subject to a call premium of 1.0%. Otherwise, the term B-1 loans may be voluntarily prepaid at any time without premium or penalty other than customary breakage costs with respect to Eurocurrency rate loans.
Bright Horizons Family Solutions, Inc. Announces Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2014; Provides Earnings Guidance for the Fourth Quarter and Year 2014
Nov 4 14
Bright Horizons Family Solutions, Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported revenue of $334,976,000 against $308,663,000 a year ago. Income from operations was $33,046,000 against $27,789,000 a year ago. Income before income taxes $24,651,000 against $18,594,000 a year ago. Net income attributable to company was $15,379,000 against $15,044,000 a year ago. Earnings per diluted common share were $0.23 against $0.23 a year ago. Adjusted EBITDA was $55,284,000 against $49,975,000 a year ago. Adjusted income from operations was $33,046,000 against $29,536,000 a year ago. Adjusted income before tax was $33,649,000 against $29,263,000 a year ago. Adjusted net income was $21,367,000 against $18,436,000 a year ago. Diluted adjusted earnings per pro forma common share were $0.32 against $0.28 a year ago. The adjusted EBITDA increase reflects operating leverage from enrollment gains in mature and ramping centers, contributions from new child care centers, back-up dependent care and educational advisory clients that have been added since the third quarter of 2013, and strong cost management, partially offset by the costs incurred during the ramp up of certain new lease/consortium centers opened during 2013 and 2014. The increase in adjusted operating income reflects a $4.4 million increase in gross profit, partially offset by increases in recurring selling, general and administrative expenses ("SG&A"). During the nine months ended September 30, 2014, the Company generated approximately $121.3 million of cash flow from operations compared to $121.5 million for the same period in 2013 and invested $53.4 million in fixed assets and acquisitions compared to $180.5 million in the same 2013 period.
For the nine months, the company reported revenue of $1,015,231,000 against $899,599,000 a year ago. Income from operations was $109,592,000 against $78,623,000 a year ago. Income before income taxes $83,856,000 against loss before income taxes of $16,446,000 a year ago. Net income attributable to company was $53,141,000 against loss of $11,120,000 a year ago. Earnings per diluted common share were $0.79 against loss per diluted share of $0.18 a year ago. Net cash provided by operating activities was $121,311,000 against $121,465,000 a year ago. Purchases of fixed assets were $47,953,000 against $55,159,000 a year ago. Adjusted EBITDA was $177,068,000 against $155,163,000 a year ago. Adjusted income from operations was $110,142,000 against $95,249,000 a year ago. Adjusted income before tax was $112,936,000 against $90,645,000 a year ago. Adjusted net income was $71,535,000 against $57,106,000 a year ago. Diluted adjusted earnings per pro forma common share were $1.06 against $0.87 a year ago.
As described below, the company is updating certain targets regarding its 2014 expectations: overall revenue growth in 2014 of approximately 11%; adjusted EBITDA growth in 2014 in the range of 15-16%; adjusted net income growth in 2014 in the range of 23-25%; diluted adjusted earnings per pro forma common share growth in the range of 20-22%. Guidance for adjusted EPS for the full year in 2014 is in the range of $1.43 to $1.45. The company estimates that the effective structural tax rate will continue to be in the neighborhood of 36.5% of adjusted pretax income in 2014, which is consistent with the projected GAAP reported effective tax rate for the full year. For the full year, the company projects to generate $160 million to $165 million of cash flow from operations and $135 million to $140 million of free cash flow, net of the projected maintenance capital spending of around $25 million.
The company's outlook for adjusted EBITDA is therefore $62 million to $64 million for fourth quarter of 2014 and adjusted net income is in the range of $25 million to $26 million, with adjusted EPS ranging from $0.37 to $0.39 for the fourth quarter of 2014.