Bright Horizons Family Solutions(US:BFAM)2023-11-05 16:00Revenue Growth - For the three months ended September 30, 2023, the company reported a revenue of $645.8 million, a 19.5% increase compared to $540.2 million in the same period of 2022[110]. - The full service center-based child care segment experienced a 17% year-over-year revenue growth, with net enrollment growth of 8% as centers continue to re-ramp[107]. - The back-up care segment saw a significant 32% year-over-year increase in revenue due to increased utilization and new clients[107]. - Revenue for the nine months ended September 30, 2023, was $1,802,609 thousand, a 20.9% increase from $1,490,965 thousand in the same period of 2022[117]. - Total revenue for the three months ended September 30, 2023, was $645,787 thousand, a 19.5% increase from $540,215 thousand in the same period of 2022[119]. - Tuition revenue increased by $58,494 thousand, or 17%, due to an 8% net increase in enrollment and average tuition rate increases of approximately 7%[119]. - Revenue generated by the back-up care services increased by $80.7 million, or 27%, for the nine months ended September 30, 2023, compared to the same period in 2022, due to increased utilization by new and existing clients[125]. - Total revenue for the nine months ended September 30, 2023, was $1.8 billion, an increase of $311.6 million, or 20.9%, compared to the same period in 2022[125]. Profitability Metrics - The company reported a gross profit of $157.6 million, representing a gross margin of 24.4%, compared to a gross profit of $128.8 million and a margin of 23.8% in the prior year[110]. - Gross profit for the nine months ended September 30, 2023, was $415,822 thousand, representing a gross margin of 23.1%, compared to 24.6% in the prior year[117]. - Gross profit for the three months ended September 30, 2023, was $157,600 thousand, a 22% increase from $128,800 thousand in the same period of 2022[121]. - Adjusted EBITDA for the quarter was $101.2 million, representing 15.7% of revenue, compared to $80.6 million or 14.9% of revenue in the same period last year[110]. - Adjusted EBITDA increased by $20.6 million, or 26%, for the three months ended September 30, 2023, compared to the same period in 2022, driven by gross profit contributions from the full service center-based child care segment and the back-up care segment[123]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $252,927 thousand, representing a margin of 14.0%[117]. - Adjusted EBITDA increased by $26.5 million, or 12%, for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to increased gross profit in child care segments[129]. Income and Expenses - Income from operations for the quarter was $66.8 million, which is 10.3% of revenue, compared to $39.0 million or 7.2% of revenue in the same quarter last year[110]. - Net income for the quarter was $40.0 million, a 119% increase from $18.2 million in the prior year, resulting in a net income margin of 6.2%[110]. - Income from operations increased by $27,800 thousand, or 71%, to $66,800 thousand for the three months ended September 30, 2023, compared to $39,000 thousand in the same period of 2022[121]. - Income from operations for the full service center-based child care segment increased by $16.8 million, or 171%, for the three months ended September 30, 2023, compared to the same period in 2022, primarily due to increases in tuition revenue from enrollment growth and annual tuition rate increases[123]. - Adjusted net income increased by $13.0 million, or 34%, for the three months ended September 30, 2023, compared to the same period in 2022, primarily due to the increase in adjusted income from operations[123]. - Net interest expense increased to $12.2 million for the three months ended September 30, 2023, from $11.7 million for the same period in 2022, primarily due to increased borrowings and higher interest rates[123]. - Income tax expense was $14.6 million during the three months ended September 30, 2023, at an effective income tax rate of 27%, compared to $9.1 million at a 33% rate for the same period in 2022[123]. - Adjusted net income rose by $8.3 million, or 8%, for the nine months ended September 30, 2023, driven by higher adjusted income from operations, partially offset by increased interest expense and tax rate[129]. Cash Flow and Investments - Cash provided by operating activities increased to $161.0 million for the nine months ended September 30, 2023, compared to $130.978 million for the same period in 2022, reflecting a $6.1 million increase in net income[140]. - Cash used in investing activities decreased significantly to $92.0 million for the nine months ended September 30, 2023, from $250.9 million in the same period in 2022, primarily due to reduced acquisition payments[141]. - The company invested $37.8 million to acquire four centers in the U.S. and four centers in Australia during the nine months ended September 30, 2023[141]. - Cash used in financing activities decreased to $60.5 million for the nine months ended September 30, 2023, compared to $89.5 million in the same period in 2022, mainly due to reduced share repurchases[142]. - The company anticipates that cash flows from operating activities will continue to improve as center enrollment ramps up[137]. Debt and Interest Rates - As of September 30, 2023, total debt was $966.468 million, a decrease from $977.581 million as of December 31, 2022, representing a reduction of approximately 1.14%[150]. - Long-term debt stood at $950.468 million as of September 30, 2023, down from $961.581 million at the end of 2022, indicating a decrease of about 1.15%[150]. - Borrowings on the revolving credit facility decreased significantly to $29.4 million from $84.0 million, a reduction of approximately 65%[150]. - The blended weighted average interest rate for term loans and revolving credit facility was 3.92% for the nine months ended September 30, 2023, compared to 2.80% for the same period in 2022[150]. - The company estimates that the overall weighted average interest rate will approximate 4.85% for the remainder of 2023, inclusive of cash flow hedges[150]. - Interest rate cap agreements with a total notional value of $800 million were entered into to mitigate interest rate exposure, providing protection if the one-month term SOFR rate exceeds 0.9%[150]. Shareholder Actions - The board of directors authorized a share repurchase program of up to $400 million, with $198.3 million remaining available for future repurchases as of September 30, 2023[137].