Early Childhood Education Centers - As of March 29, 2025, the company operated 1,582 early childhood education centers, an increase from 1,563 centers as of March 30, 2024, with a total capacity for 211,767 children[116] - Average weekly ECE full-time enrollment (FTEs) decreased by 1,104, or 0.8%, to 144,076 for the three months ended March 29, 2025, compared to 145,180 for the same period in 2024[120] - ECE same-center revenue increased by $8.6 million, or 1.4%, to $606.4 million for the three months ended March 29, 2025, compared to $597.7 million for the same period in 2024[124] - ECE same-center occupancy decreased by 50 basis points to 69.1% for the three months ended March 29, 2025, compared to 69.6% for the same period in 2024[122] - Revenue from early childhood education centers increased by $9.7 million, or 1.6%, primarily driven by $8.6 million higher same-center revenue[147] Financial Performance - Total revenue for the three months ended March 29, 2025, was $668.2 million, an increase of $13.6 million or 2.1% compared to $654.7 million for the same period in 2024[146] - Net income for the three months ended March 29, 2025, was $21.2 million, compared to a net loss of $1.8 million for the same period in 2024[145] - Adjusted net income for the three months ended March 29, 2025, was $27,030,000, compared to $10,292,000 for the same period in 2024, marking an increase of approximately 162.5%[166] - Adjusted EBITDA for the three months ended March 29, 2025, was $83,551,000, up from $74,440,000 in the prior year, indicating a year-over-year increase of approximately 12.5%[164] Government Subsidies and Revenue - Subsidy revenue from government agencies was $240.1 million for the three months ended March 29, 2025, up from $215.8 million for the same period in 2024[127] Expenses and Cost Management - Cost of services (excluding depreciation and impairment) increased by $18.5 million, or 3.7%, due to a $10.7 million decrease in government assistance reimbursements[150] - Selling, general, and administrative expenses decreased by $18.7 million, or 20.7%, primarily due to lower stock-based compensation and bonus expenses[152] - Interest expense decreased by $16.3 million, or 44.8%, due to lower outstanding principal and interest rates following the October 2024 repayment[154] - Impairment losses decreased by $2.9 million, or 65.4%, due to fewer centers triggering impairment assessments[153] Cash Flow and Liquidity - Cash provided by operating activities increased to $98,444,000 for the three months ended March 29, 2025, compared to $64,119,000 for the same period in 2024, reflecting a growth of approximately 53.4%[185] - Cash provided by operating activities increased by $34.3 million for the three months ended March 29, 2025, compared to the same period in 2024, primarily due to lower interest expense[186] - The company had cash, cash equivalents, and restricted cash of $131,389,000 at the end of the period, compared to $128,831,000 at the end of the same period in 2024, showing a slight increase[185] Debt and Financing - The net proceeds from the IPO were primarily utilized to repay $608.0 million of outstanding principal on the first lien term loan, allowing for reduced interest rates on senior secured credit facilities[138] - The company has a total borrowing capacity of $262.5 million under its First Lien Revolving Credit Facility as of March 29, 2025[171] - As of March 29, 2025, there were no outstanding borrowings under the First Lien Revolving Credit Facility, with $55.1 million of outstanding letters of credit[175] - Long-term debt obligations total $1.3 billion, with $77.4 million expected to be paid out for the remainder of fiscal 2025[193] - The company entered into interest rate swap contracts with a notional amount of $400.0 million at fixed rates of 3.85% and 3.89% to hedge interest rate risk[196] Future Outlook and Strategy - The company aims to improve occupancy rates across its centers, leveraging strategic investments in technology and talent[111] - The company plans to expand its footprint through greenfield development and strategic acquisitions, anticipating long-term revenue and profit growth[112] - The company expects to implement regular price increases to support center reinvestment and enhance operational performance[112] - The company expects to meet its liquidity requirements for at least the next 12 months under current operating conditions[170]
Kindercare Learning Companies, Inc.(KLC) - 2025 Q1 - Quarterly Report