Bright Horizons Family Solutions® Reports Second Quarter of 2013 Financial Results

WATERTOWN, Mass., Aug. 8, 2013 /PRNewswire/ -- Bright Horizons Family Solutions® Inc. (NYSE: BFAM), a leading provider of high-quality child care and early education and other services designed to help employers and families address the challenges of work and life, today announced financial results for the second quarter of 2013.

(Logo:  http://photos.prnewswire.com/prnh/20100818/NE52441LOGO )

Second quarter 2013 highlights (compared to second quarter 2012):

  • Revenue increased 15% to $311 million
  • Adjusted EBITDA* increased 18% to $57 million
  • Adjusted income from operations* rose 15% to $36 million
  • Adjusted net income* increased 99% to $23 million
  • Diluted adjusted earnings per pro forma common share* increased 59% to $0.35

Year to date June 30, 2013 highlights (compared to six months ended June 30, 2012):

  • Revenue increased 12% to $591 million
  • Adjusted EBITDA* increased 18% to $105 million
  • Adjusted income from operations* rose 14% to $66 million
  • Adjusted net income* increased 93% to $39 million
  • Diluted adjusted earnings per pro forma common share* increased 58% to $0.60

"We are pleased with our results this past quarter and through the first half of the year," said David Lissy, Chief Executive Officer.  "We continue to execute on our plan to grow organically as well as through strategic acquisitions that enhance our leadership in our field.  Our full suite of solutions, including full service centers, back-up care and educational advisory services, continues to allow us to expand our relationships with the clients we serve and to help working families better integrate the challenges of work and life across key life stages.  In April, we continued to expand our footprint in the UK with the addition of Kidsunlimited and, in July, we announced the completion of our acquisition of Children's Choice, the third largest provider in the US employer-sponsored child care market.  Both of these additions have allowed us to expand our center footprint and add new employer client relationships, as well as to add talented professionals to our team in the US and in the UK."

Second quarter 2013 results
Revenue increased $39.4 million in the second quarter of 2013 from the second quarter of 2012 on contributions from new and ramping full service child care centers, average price increases of 3-4%, and expanded sales of back-up dependent care and educational advisory services.

In the second quarter of 2013, adjusted EBITDA increased $8.8 million and adjusted income from operations increased $4.7 million from the second quarter of 2012 primarily as a result of the $10.9 million increase in gross profit, partially offset by increases in selling, general and administrative expenses ("SG&A"), including investments in technology and marketing to support the growth of the business, and incremental overhead costs from Kidsunlimited.  Enrollment gains in mature and ramping centers, contributions from new child care centers, as well as back-up dependent care and educational advisory clients that have been added since the second quarter of 2012, coupled with strong cost management have driven gross margin improvement from 23.8% in the second quarter of 2012 to 24.3% in 2013.

In 2013, the Company incurred $1.8 million in transaction costs related to the acquisition of Kidsunlimited, including $0.3 million in the second quarter. In the second quarter of 2012, the Company recognized $15.1 million of stock compensation expense in connection with an exchange of existing stock options for replacement stock options. Income from operations was therefore $35.4 million for the second quarter of 2013 compared to $16.1 million in the same 2012 period, and net income was $24.5 million for the second quarter of 2013 compared to a net loss of $1.9 million in 2012.  Adjusted net income increased by $11.5 million, or 99%, to $23.1 million as compared to the second quarter of 2012, on expanded adjusted operating income and lower interest expense. Diluted adjusted earnings per pro forma common share was $0.35, compared to $0.22 in the second quarter of 2012, an increase of 59%.

As of June 30, 2013, the Company operated 830 early care and education centers with the capacity to serve 92,800 children and families, a 6% increase in capacity since June 30, 2012.

*Adjusted EBITDA, adjusted income from operations and adjusted net income are non-GAAP measures.  Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, straight line rent expense, stock compensation expense, expenses related to the IPO and refinancing that were completed in January 2013 (the "IPO and refinancing"), and the secondary offering that was completed in June 2013, expenses associated with completed acquisitions, and the Sponsor management agreement termination fee. Adjusted income from operations represents income from operations before expenses related to the completion of the IPO and secondary offering, and expenses associated with completed acquisitions. Adjusted net income represents net income determined in accordance with GAAP, adjusted for stock compensation expense, amortization expense, the Sponsor management agreement termination fee, IPO and refinancing expenses, secondary offering expense, expenses associated with completed acquisitions and the income tax provision (benefit) thereon. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in the table referred to below. Diluted adjusted earnings per pro forma common share is a non-GAAP measure, calculated using adjusted net income, and gives effect to the conversion of Class L common stock as if the conversion were completed at the beginning of the respective fiscal period. Please refer to "Non-GAAP Measures," "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations," and "Bright Horizons Family Solutions Inc. Diluted Adjusted Earnings per Pro Forma Common Share" for further detail.

Balance Sheet and Cash Flow
During the six months ended June 30, 2013, the Company generated approximately $98 million of cash flow from operations compared to $90 million for the same period in 2012 and invested $40 million in fixed assets and $64 million in acquired businesses.  Net cash provided by financing activities totaled $35 million in the six months ended June 30, 2013.  The Company raised $235 million of net proceeds from the IPO completed on January 30, 2013, and repaid all of its outstanding indebtedness under its senior notes, senior subordinated notes, Tranche B term loans, and Series C new term loans with the proceeds from the IPO and proceeds from the issuance of $790 million in new secured term loans. The Company did not sell any additional shares in the secondary offering completed in June 2013. During the six month period ending June 30, 2013, the Company's cash and cash equivalents increased by $29 million to $63 million and the net debt position declined $169 million to $704 million at June 30, 2013.

2013 Outlook
As described below, the Company is updating certain targets regarding its 2013 expectations to reflect its results through June 30, 2013.

  • Overall revenue growth in 2013 in the range of 12-14%
  • Adjusted EBITDA growth in 2013 in the range of 14-17%
  • Adjusted net income in 2013 in the range of $77 to $79 million
  • Diluted adjusted earnings per pro forma common share in 2013 in the range of $1.17 to $1.21

In addition, for the full year in 2013, the Company estimates that pro forma diluted weighted average shares will approximate 66 million shares, comprised of approximately 62.8 million shares for the first six months of 2013 and approximately 67 million shares for the remainder of 2013.  This includes the 11.6 million common shares issued in connection with the IPO in the first quarter of 2013 and assumes the conversion of the Class L shares into common shares as if that conversion occurred on January 1, 2013.

Conference Call
Bright Horizons Family Solutions will host an investor conference call today at 5:00 pm ET.   Interested parties are invited to listen to the conference call by dialing 1-877-407-0784 or, for international callers, 1-201-689-8560, and asking for the Bright Horizons Family Solutions conference call, moderated by Chief Executive Officer David Lissy.  Replays of the entire call will be available through August 16, 2013 at 1-877-870-5176 or, for international callers, at 1-858-384-5517, conference ID # 417237.  A webcast of the conference call will also be available through the Investor Relations section of the Company's web site, www.brighthorizons.com.  A copy of this press release is available on the web site.

Forward-Looking Statements
This press release includes statements that express the Company's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements." Bright Horizons Family Solutions' 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. They include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we and our partners operate. 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, the following: 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; changes in our relationships with employer sponsors; our substantial indebtedness and the terms of such indebtedness; our ability to withstand seasonal fluctuations in the demand for our services; significant competition within our industry; our ability to implement our growth strategies successfully; as well as those risks and uncertainties described in the "Risk Factors" section of our Annual Report on Form 10-K filed March 26, 2013. 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, unless required by law.

Non-GAAP Measures
In addition to the results provided in accordance with U.S. generally accepted accounting principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements - adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per pro forma common share – which present operating results on a basis adjusted for certain items.  The Company uses these non-GAAP measures as key performance measures for the purpose of evaluating performance internally.  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 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 pro forma common share may differ from similar measures reported by other companies.  Adjusted EBITDA, adjusted income from operations, and adjusted net income are reconciled from the respective measures under GAAP in the attached table "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations".

On January 30, 2013, the Company completed its IPO in which 11.6 million shares of common stock were sold at a price of $22.00 per share (including the overallotment option which was exercised by the underwriters and completed on February 21, 2013). Prior to the IPO, on January 11, 2013, each share of the Company's Class L common stock converted into 35.1955 shares of common stock. The number of common shares used in the calculations of diluted adjusted earnings per pro forma common share for the six months ended June 30, 2013 and 2012 give effect to the conversion of all outstanding shares of Class L common stock at the conversion factor of 35.1955 common shares for each Class L share, as if the conversion was completed at the beginning of the respective fiscal period. The calculations of diluted adjusted earnings per pro forma common share also include the dilutive effect of stock options, using the treasury stock method. Shares sold in the IPO are included in the diluted adjusted earnings per pro forma common share calculations beginning on the date that such shares were actually issued. Diluted adjusted earnings per pro forma common share is calculated using adjusted net income, as defined above. See the attached table "Bright Horizons Family Solutions Inc. Diluted Adjusted Earnings per Pro Forma Common Share" for further detail.

About Bright Horizons Family Solutions® Inc.
Bright Horizons Family Solutions® is a leading provider of high-quality child care, early education and other services designed to help employers and families better address the challenges of work and life. The Company provides center-based full service child care, back-up dependent care and educational advisory services to more than 850 clients across the United States, the United Kingdom, Ireland, the Netherlands, Canada and India, including more than 130 FORTUNE 500 companies and more than 75 of Working Mother magazine's 2012 "100 Best Companies for Working Mothers".  Bright Horizons is one of FORTUNE magazine's "100 Best Companies to Work For" and is one of the UK's Best Workplaces as designated by the Great Place to Work® Institute. Bright Horizons is headquartered in Watertown, MA. The Company's web site is located at www.brighthorizons.com.

Contacts:
Investors:
Elizabeth Boland
CFO – Bright Horizons
Eboland@brighthorizons.com
617-673-8125

Kevin Doherty
VP – Solebury Communications Group LLC
kdoherty@soleburyir.com
203-428-3233

Media:
Ilene Serpa
VP – Communications – Bright Horizons
iserpa@brighthorizons.com
617-673-8044

Bright Horizons Family Solutions Inc.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited, $ in thousands except per share amounts)












Three Months Ended June 30,



2013


%


2012


%










Revenue


$          310,813


100.0%


$          271,463


100.0%

Cost of services


235,388


75.7%


206,910


76.2%

      Gross profit


75,425


24.3%


64,553


23.8%










Selling general & administrative expenses


32,426


10.4%


41,859


15.4%

Amortization


7,602


2.5%


6,633


2.5%










      Income from operations


35,397


11.4%


16,061


5.9%










Interest expense, net


(8,924)


-2.9%


(20,499)


-7.6%










      Income (loss) before tax


26,473


8.5%


(4,438)


-1.7%










Income tax provision (benefit)


1,966


0.6%


(2,524)


-0.9%










Net income (loss)


24,507


7.9%


(1,914)


-0.8%

Net (loss) income attributable to non-controlling interest


(72)


0.0%


53


0.0%

Net income (loss) attributable to Bright Horizons Family

Solutions Inc.


$            24,579


7.9%


$            (1,967)


-0.8%










Accretion of Class L preference





19,589



Accretion of Class L preference for vested options





3,926



Net income (loss) available to common shareholders


$            24,579




$          (25,482)



Allocation of net income (loss) to common

stockholders—basic and diluted:









     Class L


$                   —




$            19,589



     Common stock


$            24,579




$         (25,482)



Earnings (loss) per share:









     Class L—basic and diluted


$                   —




$              14.76



     Common stock:









          Basic


$                0.38




$              (4.20)



          Diluted


$                0.37




$              (4.20)



Weighted average number of common shares

outstanding:









     Class L—basic and diluted





1,327,115



     Common stock:









          Basic


64,732,730




6,062,664



          Diluted


66,635,484




6,062,664



 

Bright Horizons Family Solutions Inc.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited, $ in thousands except per share amounts)












Six Months Ended June 30,



2013


%


2012


%










Revenue


$          590,936


100.0%


$          529,585


100.0%

Cost of services


449,721


76.1%


407,012


76.9%

      Gross profit


141,215


23.9%


122,573


23.1%










Selling general & administrative expenses


76,031


12.9%


67,226


12.7%

Amortization


14,350


2.4%


13,182


2.5%










      Income from operations


50,834


8.6%


42,165


7.9%










Loss on extinguishment of debt


(63,682)


-10.8%



0.0%

Interest expense, net


(22,192)


-3.7%


(40,370)


-7.6%










     (Loss) income before tax


(35,040)


-5.9%


1,795


0.3%










Income tax (benefit) provision


(8,766)


-1.5%


119


0.0%










      Net (loss) income


(26,274)


-4.4%


1,676


0.3%

Net (loss) income attributable to non-controlling interest


(110)


0.0%


134


0.0%

Net (loss) income attributable to Bright Horizons Family

Solutions Inc.


$          (26,164)


-4.4%


$              1,542


0.3%










Accretion of Class L preference





38,102



Accretion of Class L preference for vested options





3,992



Net loss available to common shareholders


$          (26,164)




$          (40,552)



Allocation of net loss to common stockholders—basic

and diluted:









     Class L


-




$            38,102



     Common stock


$          (26,164)




$          (40,552)



Earnings (loss) per share:









     Class L—basic and diluted


-




$              28.75



     Common stock:









          Basic


$              (0.43)




$              (6.70)



          Diluted


$              (0.43)




$              (6.70)



Weighted average number of common shares

outstanding:









     Class L—basic and diluted


-




1,325,297



     Common stock—basic and diluted


60,265,132




6,054,360



 

Bright Horizons Family Solutions Inc.

 CONDENSED CONSOLIDATED BALANCE SHEETS

 (Unaudited, in thousands)












June 30, 2013


December 31, 2012








 ASSETS





 Current assets:





 Cash and cash equivalents

$                62,999


$                 34,109


 Accounts receivable, net

56,664


62,714


 Other current assets

53,547


39,194



 Total current assets

173,210


136,017








 Fixed assets, net

366,802


340,376

 Goodwill


1,047,049


997,344

 Other intangibles, net

434,398


432,580

 Other assets


11,292


9,791



 Total assets

$           2,032,751


$            1,916,108








 LIABILITIES, NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT)

 Current liabilities:





 Current portion of long-term debt

$                  7,900


$                   2,036


 Accounts payable and accrued expenses

111,066


97,207


 Deferred revenue and other current liabilities

126,379


102,650



 Total current liabilities

245,345


201,893








 Long-term debt

758,766


904,607

 Deferred income taxes

151,820


148,880

 Other long term liabilities

56,435


52,388



Total liabilities

1,212,366


1,307,768








 Redeemable noncontrolling interest

7,894


8,126

 Common stock, Class L, at accreted distribution value (1)


854,101

 Total stockholders' equity (deficit)

812,491


(253,887)



 Total liabilities, noncontrolling interest and

stockholders' equity (deficit)

$           2,032,751


$            1,916,108















 

 

(1)

Prior to filing a registration statement with the Securities and Exchange Commission ("SEC") related to our


initial public offering, Class L common stock was classified within stockholders' equity (deficit). In order


to comply with SEC requirements as a public company, we reclassified Class L common stock outside of


permanent equity for all periods presented. For further discussion on Class L common stock, see the


consolidated financial statements and notes thereto for the year ended December 31, 2012 included in the


Company's Annual Report on Form 10-K.












 


Bright Horizons Family Solutions Inc.

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited, in thousands)









Six Months Ended June 30,






2013


2012

Cash flows from operating activities






Net (loss) income


$        (26,274)


$         1,676


Adjustments to reconcile net (loss) income to net cash






provided by operating activities:







Depreciation and amortization


35,856


32,617



Loss on extinguishment of debt


63,682




Interest paid in kind


2,143


11,497



Stock based compensation


8,305


15,799



Deferred income taxes


431


(13,310)



Other non-cash adjustments, net


513


898


Changes in assets and liabilities:







Accounts receivable


7,691


12,688



Prepaid expenses and other current assets


(18,256)


7,115



Accounts payable and accrued expenses


5,213


17,767



Other, net


19,122


3,696




Net cash provided by operating activities


98,426


90,443









Cash flows from investing activities






Purchases of fixed assets


(39,662)


(27,688)


Payments for acquisitions—net of cash acquired


(64,213)


(108,168)




Net cash used in investing activities


(103,875)


(135,856)









Cash Flows from financing activities






Borrowings of long-term debt


769,360


82,321


Principal payments of long-term debt


(3,950)


(5,048)


Extinguishment of long-term debt


(972,468)



Proceeds from initial public offering, including over-allotment, net


234,944



Proceeds from issuance of common stock upon exercise of options


4,668


2,115


Tax benefit from stock-based compensation


2,791


3,506


Purchase of treasury stock



(5,140)




Net cash provided by financing activities


35,345


77,754









Effect of exchange rate changes on cash


(1,006)


(25)












Net increase in cash and cash equivalents


28,890


32,316









Cash and cash equivalents, beginning of period


34,109


30,448









Cash and cash equivalents, end of period


$           62,999


$       62,764

 

Bright Horizons Family Solutions Inc.

 SEGMENT INFORMATION

 (Unaudited, in thousands)












Full service

center-based

care


Back-up

dependent

care


Other

educational

advisory

services


Total

Three Months Ended June 30, 2013









Revenue


$         269,910


$           35,717


$          5,186


$     310,813

Amortization of intangibles


7,346


181


75


7,602

Income from operations


24,062


10,927


408


35,397

Adjusted income from operations (1)


24,974


10,927


408


36,309










Three Months Ended June 30, 2012









Revenue


$         235,592


$           31,635


$          4,236


$     271,463

Amortization of intangibles


6,377


181


75


6,633

Income (loss) from operations


10,731


6,402


(1,072)


16,061

Adjusted income from operations (1)


22,188


9,259


131


31,578










 

(1)  Adjusted income from operations represents income from operations excluding expenses incurred in connection with the completion of the IPO in January 2013, the secondary offering in June 2013, the modification of stock options in May 2012 and transaction costs associated with the acquisition of a business in 2013.



Full service

center- based

care


Back-up

dependent

care


Other

educational

advisory

services


Total

Six Months Ended June 30, 2013









Revenue


$         512,160


$           68,878


$          9,898


$    590,936

Amortization of intangibles


13,837


362


151


14,350

Income (loss) from operations


32,934


18,394


(494)


50,834

Adjusted income from operations (1)


45,180


20,247


286


65,713










Six Months Ended June 30, 2012









Revenue


$         459,632


$           61,747


$          8,206


$     529,585

Amortization of intangibles


12,669


362


151


13,182

Income (loss) from operations


27,907


15,209


(951)


42,165

Adjusted income from operations (1)


39,364


18,066


252


57,682











(1)  Adjusted income from operations represents income from operations excluding expenses incurred in connection with the completion of the IPO in 2013, the secondary offering in 2013, the modification of stock options in 2012 and transaction costs associated with the acquisition of a business in 2013.

 

Bright Horizons Family Solutions Inc

NON-GAAP RECONCILIATIONS

(Unaudited, in thousands)



Three Months Ended June 30,


Six Months Ended June 30,


2013

2012


2013

2012







Net income (loss)

$           24,507

$        (1,914)


$       (26,274)

$       1,676

Interest expense, net

8,924

20,499


22,192

40,370

Income tax expense (benefit)

1,966

(2,524)


(8,766)

119

Depreciation

10,553

8,214


20,251

16,103

Amortization (a)

7,602

6,633


14,350

13,182







EBITDA

53,552

30,908


21,753

71,450

Additional Adjustments:






Straight line rent expense (b)

524

372


1,363

600

Stock compensation expense (c)

1,685

15,574


8,305

15,799

Sponsor management fee (d)

625


7,674

1,250

Loss on extinguishment of debt (e)


63,682

Stock offering costs (f)

647

400


647

400

Expenses related to acquisitions (g)

265


1,764







Total adjustments

3,121

16,971


83,435

18,049







Adjusted EBITDA

$           56,673

$      47,879


$        105,18

$     89,499













Income from operations

$           35,397

$        16,061


$        50,834

$     42,165

Stock compensation for performance-based awards and

 effect of option modification, respectively (c)

15,117


4,968

 

15,117

Sponsor termination fee (d)


7,500

Stock offering costs (f)

647

400


647

400

Acquisition-related costs (g)

265


1,764







Adjusted income from operations

$           36,309

$      31,578


$       65,713

$     57,682













Net (loss) income

$           24,507

$      (1,914)


$        (26,274)

$        1,676

Income tax (benefit) expense

1,966

(2,524)


(8,766)

119







(Loss) income before tax

26,473

(4,438)


(35,040)

1,795

Stock compensation expense (c)

1,685

15,574


8,305

15,799

Sponsor management fee (d)

625


7,674

1,250

Amortization (a)

7,602

6,633


14,350

13,182

Loss on extinguishment of debt (e)


63,682

Stock offering costs (f)

647

400


647

400

Acquisition-related costs (g)

265


1,764







Adjusted income before tax

36,672

18,794


61,382

32,426

Income tax expense (h)

(13,568)

(7,196 )


(22,712)

(12,420 )







Adjusted net income

$           23,104

$      11,598


$         38,670

$     20,006







(a) Represents amortization of intangible assets, including $10.1 million for the six months ended June 30, 2012 and 2013 associated with intangible assets recorded in connection with our going private transaction in May 2008.


(b) Represents rent in excess of cash paid for rent, recognized on a straight line basis over the lease life in accordance with Accounting Standards Codification ("ASC") Topic 840, Leases.


(c) Represents non-cash stock-based compensation expense, including performance-based stock compensation charge.


(d) Represents fees paid to our Sponsor under a management agreement, including the Sponsor termination fee.


(e) Represents redemption premiums and write off of unamortized debt issue costs and original issue discount associated with indebtedness that was repaid in connection with a refinancing.


(f) Represents costs incurred in connection with secondary offering of common stock completed in June 2013 and costs incurred in connection with the initial public offering of common stock completed in January 2013, respectively.


(g) Represents costs associated with the acquisition of businesses.


(h) Represents income tax expense calculated on adjusted income before tax at the effective rate of 37.0% in 2013 and 38.3% in 2012.

 

Bright Horizons Family Solutions Inc.

 DILUTED ADJUSTED EARNINGS PER PRO FORMA COMMON SHARE

 (Unaudited, $ in thousands except per share amounts)














Three Months

Ended June 30,


Six Months

Ended June 30,




2013


2012


2013


2012







Diluted earnings (loss) per pro forma common share:










Net income (loss)  


$       24,507


$      (1,914)


$      (26,274)


$         1,676


Pro forma weighted average number of common shares—diluted:









Weighted average number of Class L shares over period in which Class L shares were outstanding (1)



1,327,115


1,327,115


1,325,297


Adjustment to weight Class L shares over respective period




(1,253,387)



Weighted average number of Class L shares over period



1,327,115


73,728


1,325,297


Class L conversion factor


35.1955


35.1955


35.1955


35.1955


Weighted average number of converted Class L common shares



46,708,476


2,594,916


46,644,491


Weighted average number of common shares


64,732,730


6,062,664


60,265,132


6,054,360


Pro forma weighted average number of common shares—basic


64,732,730


52,771,140


62,860,048


52,698,851


Incremental dilutive shares (2)


1,902,754




84,121


Pro forma weighted average number of common shares—diluted

66,635,484


52,771,140


62,860,048


52,782,972

Diluted earnings (loss) per pro forma common share


$           0.37


$        (0.04)


$         (0.42)


$           0.03











Diluted adjusted earnings per pro forma common share:










Adjusted net income


$       23,104


$       11,598


$        38,670


$       20,006


Pro forma weighted average number of common shares—basic


64,732,730


52,771,140


62,860,048


52,698,851


Incremental dilutive shares (2)


1,902,754


39,650


1,832,986


84,121


Pro forma weighted average number of common shares—diluted


66,635,484


52,810,790


64,693,034


52,782,972











Diluted adjusted earnings per pro forma common share


$           0.35


$           0.22


$            0.60


$           0.38











(1)  The weighted average number of Class L shares in the actual Class L earnings per share calculation for the three and six months June 30, 2013 represents the weighted average from the beginning of the period up through the date of conversion of the Class L shares into common shares. As such, the pro forma weighted average number of common shares includes an adjustment to the weighted average number of Class L shares outstanding to reflect the length of time the Class L shares were outstanding prior to conversion relative to the respective three and six month periods. The converted Class L shares are already included in the weighted average number of common shares outstanding for the period after their conversion.

 

(2)  Represents the dilutive effect of stock options using the treasury stock method. For purposes of the diluted loss per pro forma common share for the six months ended June 30, 2013 and three months ended June 30, 2012, there is no dilutive effect since there was a loss recorded during the period.












 

SOURCE Bright Horizons Family Solutions Inc.



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