TORONTO, April 21, 2017 /CNW/ - BrightPath Early Learning Inc. ("BrightPath" or the "Company") (TSX-V:BPE.V - News), the leading Canadian provider of high-quality, comprehensive early childhood education and care, with 8,570 spaces of licensed capacity across 76 centres located in Alberta, Ontario and British Columbia, announced today its operational and financial results for the three and twelve months ended December 31, 2016.
Financial performance highlights for the three months ended December 31, 2016 (all compared to the same period in the prior year) include:
- The Company's revenue increased 57.7% to $21.8 million, with higher revenue reported across all provincial markets;
- The Company's centre margin increased 54.8% to $5.6 million versus $3.6 million;
- BrightPath's Adjusted EBITDA increased to $2.7 million compared to $1.3 million, an increase of $1.4 million or 92.3%;
- Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") both increased to $1.8 million ($0.015 per share) compared to $0.9 million ($0.007 per share), an increase of 107%; and
- Average occupancy of Stabilized centres of 78.3% compared to 80.3%, largely reflecting weakness in Alberta and partially offset by improvement in Ontario and British Columbia markets.
Financial performance highlights for the year ended December 31, 2016 are as follows (all compared to the prior year period):
- The Company's revenue increased 27.8% to a record $69.2 million, with higher revenue reported in all three provincial markets currently served by the Company;
- The Company's centre margin increased 19.0% to $17.6. million, with all provincial markets achieving higher centre margins;
- BrightPath's Adjusted EBITDA increased to $7.0 million compared to $5.8 million;
- FFO increased to $5.0 million ($0.041 per share) compared to $4.6 million ($0.038 per share);
- AFFO increased to $4.8 million ($0.040 per share) compared to $4.3 million ($0.036 per share); and
- The average occupancy of Stabilized centres was 78.2% compared to 82.3%;
- The Company had available capital of $21.4 million at December 31, 2016 to fund the Company's pipeline of growth initiatives, which includes 570 licensed spaces in three centres under development and other pipeline initiatives not yet announced. These will bring BrightPath's total licensed capacity to 9,140 spaces, almost double the total number of Stabilized spaces at the end of fiscal 2015.
Significant events and trends for the year ended December 31, 2016 include:
- For the year ended December 31, 2016, enrollment levels and revenue in Ontario and British Columbia centres and newly developed centres in Alberta demonstrated considerable growth, exceeding the Company's expectations. Stabilized centres in Alberta continued to experience pressure on enrollments from the effects of the economic downturn, as anticipated;
- In August 2016, the Company completed the acquisition of the Peekaboo portfolio of centres ("Peekaboo"). This portfolio of 20 early learning and care centres, located in the Regions of Peel and Halton, in the Greater Toronto Area ("GTA") of Ontario, is comprised of 2,439 licensed spaces, and increased BrightPath's total capacity by approximately 40%, making Ontario BrightPath's largest market and, in doing so, geographically balanced its portfolio. The Company has identified significant operational and financial synergies from this significant acquisition which will further contribute to profitability in the near future;
- In June 2016, BrightPath acquired The Lawrence Park School ("Lawrence Park"), an early learning and care centre located in a leased facility in the Lawrence Park suburb of Toronto, Ontario, adding an additional 95 licensed spaces to the Company's capacity;
- In April 2016, the West Henday centre in Edmonton, Alberta opened, which is comprised of 247 licensed spaces in a 20,000 square foot facility developed by BrightPath on a 0.8 acre land site within Melcor Developments' West Henday Promenade Shopping Centre. Enrollment at this centre is currently 96%;
- In April 2016, the second expansion of the Company's Airdrie centre was opened, increasing this leased centre's licensed capacity from 117 to 135;
- In August 2016, the third expansion of the Airdrie centre was completed, bringing the centre's total licensed capacity to 146 spaces;
- Construction of the Sage Hill centre in Riocan REIT's Sage Hill Crossing development was commenced in the fourth quarter of 2016 and the centre was completed in February 2017. The Sage Hill centre will comprise of approximately 130 licensed spaces in a 10,000 square foot leasehold facility;
- In December 2016, the Cochrane centre located in Cochrane, Alberta, which opened in September 2015, achieved stabilization. Enrollment at this 120 space centre is currently 86%;
- Construction of the Company's "purpose-built" Richmond Early Learning and Care centre, located in First Capital's London Place West shopping centre in southwest Calgary, commenced and is anticipated to open in the second quarter of 2017. This centre will be comprised of 247 licensed spaces in a 20,000 square foot facility developed and owned by BrightPath on a one-acre parcel of land held pursuant to a long-term ground lease;
- In July 2016, BrightPath launched its redesigned and enhanced website, which is fully integrated into its CRM system. The enhanced website platform is designed to attract additional, and more relevant, visitors residing within an appropriate vicinity of the Company's centres, thereby increasing effectiveness and improving the Company's knowledge of prospective clients;
- In August 2016, the financial strength of the Company's operations and pipeline, the value inherent in its owned real estate properties and its solid banking relationship was underscored by the amended terms of its credit facility with its bank lender, resulting in a $20.5 million increase in the credit facility to $62.5 million. These funds were primarily designated to finance the acquisition of Peekaboo; and
- In September 2016, BrightPath announced the renewal of the Company's normal course issuer bid ("NCIB"). During the three and twelve months ended December 31, 2016, the Company repurchased 25,000 and 719,000 shares, respectively, for cancellation, of which 694,000 had been cancelled at December 31, 2016. Cumulatively to date, the Company has purchased for cancellation 2,024,400 shares under its NCIB program at an average price of $0.33 per share.
"BrightPath has achieved record financial results during this transformative year, attributable to the acquisition of Peekaboo and Lawrence Park centres and the highly successful new centre openings in Alberta, as well as intense efforts to increases operating efficiencies. Despite the challenging economic conditions in Alberta during 2016, there were impressive increases in revenue and centre margin year over year; furthermore, the anticipated benefits of the acquisitions and new centres were only starting to be realized in the later part of 2016 year, positioning us well to continue to deliver growth and profitability in 2017," stated Mary Ann Curran, Chief Executive Officer of the Company. "The Company continues to be focused on delivering the highest quality and breadth of early childhood education and care and to further improving enrollment while effectively managing costs to enhance shareholder value in Fiscal 2017 and beyond."
Integration of the Peekaboo portfolio is proceeding well and meeting targeted objectives. In particular, the Company has identified opportunities to improve Peekaboo operations and financial performance in several areas. Beginning with the utilization of BrightPath's customer relationship management ("CRM") and Enterprise Resource Planning ("ERP") systems, the Company believes there is potential for higher enrollments, optimization of room configurations and age mixes, greater productivity in labour hours, a shift away from uniform pricing across all centres to market specific pricing strategies, elimination of duplication of executive level personnel, office consolidation, food bulk purchasing improvements and efficiencies through combination of facilities and personnel. In support of a greater value proposition to families in the markets served, the introduction of BrightPath's curriculum and programming will underscore the basis for these improvements.