Kindercare Learning Companies, Inc.(KLC) - 2025 Q3 - Quarterly Results

Revenue Performance - Total revenue for Q3 2025 increased by $5.4 million, or 0.8%, to $676.8 million compared to Q3 2024[3] - Revenue from before- and after-school sites rose by $4.8 million, or 10.7%, primarily due to the opening of new sites[4] - Revenue for the three months ended September 27, 2025, was $676,830, compared to $671,476 for the same period in 2024, representing a growth of 0.5%[24] - For the nine months ended September 27, 2025, revenue was $2,045,184, a slight increase from $2,016,079 in the prior year, marking a growth of 1.4%[26] - For the full year 2025, revenue is now expected to be approximately $2.72 billion to $2.74 billion[11] Income and Earnings - Net income fell by $9.4 million, or 67.4%, to $4.6 million, with diluted net income per share at $0.04 compared to $0.15 in Q3 2024[6] - Net income for the three months ended September 27, 2025, was $4,550, a decrease of 67.4% from $13,959 in the prior year[24] - Net income for the nine months ended September 27, 2025, was $64,295, an increase of 57.9% compared to $40,743 for the same period in 2024[26] - Adjusted net income for the three months ended September 27, 2025, was $15,282 million, compared to $4,303 million for the same period in 2024, representing a 254% increase[31] - Adjusted net income per common share (diluted) for the nine months ended September 27, 2025, was $0.58, up from $0.31 for the same period in 2024, reflecting an 87% increase[31] Operational Costs - Income from operations decreased by $28.1 million, or 51.6%, to $26.3 million, driven by a $22.0 million increase in cost of services[5] - Total costs and expenses for the three months ended September 27, 2025, were $650,510, up from $617,101 in the same period last year, reflecting an increase of 5.4%[24] - The decrease in income from operations was partially offset by a $15.4 million decrease in interest expense due to lower outstanding principal and interest rates[6] - The company incurred interest expenses of $64,276 for the nine months ended September 27, 2025, down from $119,806 in the previous year, a decrease of 46.3%[26] Cash and Investments - As of September 27, 2025, the company had $174.7 million in cash and cash equivalents and $194.4 million in available borrowing capacity[9] - The company made net investments totaling $114.4 million during the nine months ended September 27, 2025, including $95.9 million in property and equipment[10] - The company reported a cash provided by operating activities of $234,282 for the nine months ended September 27, 2025, compared to $156,736 in the prior year, indicating a significant increase of 49.4%[28] Impairment and Amortization - The company reported a total impairment loss of $7,054 for the nine months ended September 27, 2025, consistent with $7,140 in the prior year[26] - Impairment losses for long-lived assets amounted to $7,054 million for the nine months ended September 27, 2025, compared to $7,140 million for the same period in 2024[31] - The company incurred $2,152 million in amortization of intangible assets for the three months ended September 27, 2025[31] Strategic Focus - Management expects to continue focusing on strategic acquisitions and integration costs, as evidenced by the costs incurred related to the acquisition of Crème School during the nine months ended September 28, 2024[32]