CALGARY, July 29, 2015 /CNW/ - BrightPath Early Learning
Inc. ("BrightPath" or the "Company") (TSX-V: BPE), the leading
Canadian provider of high-quality, comprehensive early childhood
education and care, announced today its operational and financial
results for the three and six month periods ended June 30, 2015.
Portfolio performance highlights for the quarter ended
June 30, 2015 are as follows (all
comparisons are against the same period in prior year and all
dollar amounts are in thousands, except per share amounts, unless
otherwise noted):
- A new record for quarterly revenue of $13.9 million, an increase of 5.5%;
- Adjusted EBITDA of $1.8 million,
an increase of 4.5%;
- Centre margin rose to 28.6% of revenue compared to 27.8%;
- Average occupancy of Stabilized centres was 86.9% compared to
87.5%;
- Funds from Operations ("FFO") of $1.4
million ($0.012 per share), an
increase of 1.5%;
- Adjusted Funds from Operations ("AFFO") of $1.4 million ($0.011 per share), an increase of 0.9%;
- Significant progress in the occupancy growth of the Clayton
Hills centre in Surrey, British
Columbia which opened in September
2014. Occupancy is, at present, 49%, which puts it on track
to reach stabilization well in advance of the 24 month period that
industry metrics typically anticipate. Based on confirmed
enrollments, the Company anticipates occupancy in September will
exceed 60% and the threshold required for profitability. In the
interim, the adverse impact from the financial loss during
stabilization has negatively impacted the Company's reported
profitability, Adjusted EBITDA, FFO and AFFO reported herein;
and
- Available capital of $23.8
million at quarter end to fund the Company's pipeline of
growth initiatives, including the announced additional 1,055
licensed spaces, or 19.4% increase in the Company's current
portfolio of 5,443 spaces, and other initiatives not yet
announced.
Highlights for the six months ended June
30, 2015 include:
- Revenues of $27.6 million, an
increase of 6.5%;
- Adjusted EBITDA of $3.6 million,
an increase of 10.3%;
- Higher centre margin of 28.8% of revenue compared to
28.2%;
- A 12.1% increase in FFO to $3.0
million and a 13.6% increase in FFO per share to
$0.025; and
- A 7.4% increase in AFFO to $2.9
million, resulting in a 9.1% increase in AFFO per share to
$0.024.
Significant events to date in 2015 include:
- In February 2015, construction of
the Creekside greenfield centre in the Symons Valley area of
northwest Calgary, which will open
in the Fall of 2015 and comprise of approximately 250 licensed
spaces, began;
- In May 2015, construction of the
West Henday centre, with approximately 250 licensed spaces, began.
This facility, which is scheduled to open in early 2016, is the
Company's first Edmonton
greenfield development;
- The expansion of the Company's Airdrie centre, located in a community just
north of Calgary, was opened in July
2015, increasing its licensed capacity from 57 licensed
spaces to 117;
- The Company's new centre just west of Calgary in Cochrane is nearing completion with the
scheduled opening of approximately 120 licensed spaces in
September 2015;
- BrightPath entered into conditional agreements with First
Capital Realty Inc. ("First Capital") to sell the real estate
underlying its McKenzie Towne
location in southeast Calgary for
gross proceeds of $7.5 million and
leaseback the property from the purchaser. This transaction creates
the availability of approximately $7.3
million of capital to augment funding for the Company's
growth pipeline and share repurchase program. It is expected to
result in a gain on disposition of approximately $1.8 million and close in the third quarter of
2015;
- The announcement of plans to develop a greenfield centre
located in First Capital's London Place West shopping centre in
southwest Calgary. When completed,
the Richmond Early Learning and Child Care Centre will comprise of
approximately 245 licensed spaces in a 20,000 square foot facility
on a one acre parcel of land. Construction of the facility is
expected to begin in early 2016; and
- During the three and six months ended June 30, 2015, the Company purchased 67,000 and
139,500 shares for cancellation, respectively, of which 92,500 had
been cancelled at June 30, 2015,
under its normal course issuer bid ("NCIB"). Cumulatively to date,
the Company has purchased for cancellation 525,200 shares under its
NCIB at an average price of $0.36 per
share.
"BrightPath confronted challenges and leveraged opportunities
during the second quarter of 2015," noted Mary Ann Curran, Chief Executive Officer of the
Company. "We began our year with a strategy to address product and
profitability optimization, portfolio growth and surfacing
shareholder value. In addition to solid year over year growth in
financial results and portfolio growth, we are pleased to have
validated the inherent value of our greenfield development program
through a precedent setting sale leaseback monetization. This
transaction creates the availability of capital to continue to
successfully improve shareholder value."
Financial Review
($000's except where otherwise noted and per share amounts)
|
|
Q2
2015
|
Q1
2015
|
Q4
2014
|
Q3
2014
|
Q2
2014
|
Q1
2014
|
Q4
2013
|
Q3
2013
|
Revenue
|
$
|
13,912
|
$
|
13,647
|
$
|
12,911
|
$
|
12,013
|
$
|
13,181
|
$
|
12,703
|
$
|
12,182
|
$
|
11,211
|
Centre
margin
|
3,976
|
3,949
|
3,741
|
2,782
|
3,670
|
3,626
|
3,209
|
2,592
|
Centre margin
%
|
28.6
|
28.9
|
29.0
|
23.2
|
27.8
|
28.5
|
26.3
|
23.1
|
Adjusted
EBITDA
|
1,781
|
1,819
|
1,889
|
801
|
1,704
|
1,560
|
926
|
226
|
FFO
|
1,436
|
1,551
|
1,633
|
517
|
1,415
|
1,250
|
688
|
(161)
|
AFFO
|
1,373
|
1,516
|
1,472
|
294
|
1,361
|
1,329
|
728
|
(113)
|
Net profit
(loss)
|
140
|
296
|
(85)
|
(963)
|
133
|
(653)
|
(1,282)
|
(1,287)
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
|
FFO
|
0.012
|
0.013
|
0.013
|
0.004
|
0.012
|
0.010
|
0.006
|
(0.001)
|
|
AFFO
|
0.011
|
0.013
|
0.012
|
0.002
|
0.011
|
0.011
|
0.006
|
(0.001)
|
|
Net profit (loss)
|
0.001
|
0.002
|
(0.001)
|
(0.008)
|
0.001
|
(0.005)
|
(0.011)
|
(0.011)
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30,
2015, the Company reported record revenue of $13,912 (June 30,
2014 - $13,181) and record
centre margin of $3,976 (June 30, 2014 - $3,670). The 5.5% year-over-year increase in
quarterly revenue included the beneficial impact of the Clayton
Hills centre opened in September 2014
and a 3.1% increase in Stabilized centre revenue. The positive
effect of fee increases in Stabilized centres was offset, in part,
by a decline in average occupancy from 87.5% in the second quarter
of 2014 to 86.9% in the second quarter of 2015. Centre margin as a
percentage of revenue in the second quarter of 2015 increased to
28.6% compared to 27.8% in the same quarter a year earlier. Fee
increases and efficiencies resulting in lower operating costs were
offset, in part, by wage rate increases, non-optimal labour ratios
in support of building occupancies and reconfiguration of rooms to
different age groups in Ontario.
Revenue for the six month period ended June 30, 2015 was $27,559 (June 30,
2014 - $25,884) and centre
margin was $7,925 (June 30, 2014 - $7,296). Centre margin as a percentage of revenue
increased to 28.8% compared to 28.2% in 2014. The reasons for the
increases in revenue and centre margin are substantially the same
as those discussed above for the second quarter of fiscal 2015.
Stabilized centre revenue increased 4.3% period over period.
Adjusted EBITDA for the second quarter of 2015 was $1,781 compared to $1,704 in the second quarter of 2014, an increase
of 4.5%. Labour as a percentage of revenue increased primarily due
to higher than cost of living wage rate increases to centre staff,
the impact of the Clayton Hills centre as it ramps up occupancy,
non-optimal labour ratios in certain centres while occupancies
build and reconfiguration of certain rooms to younger age groups in
Ontario.
Adjusted EBITDA for the six months ended June 30, 2015 was $3,600 compared to $3,264 in the same period in 2014, an increase of
10.3%.
Net profit for the second quarter of 2015 was $144 compared to a net profit of $133 in the second quarter of 2014. Net profit
for the six months ended June 30,
2015 was $440 compared to a
net loss of $520 for the six months
ended June 30, 2014. In accordance
with International Financial Reporting Standards, the Company
expenses all business acquisition costs in the period incurred.
Acquisition and development costs, incurred for future growth and
profitability, were $344 for the
second quarter of 2015 compared to $232 in the second quarter of 2014. Basic and
diluted net profit per share for the three and six months ended
June 30, 2015 was $0.001 and $0.004
(June 30, 2014 - $0.001 and $(0.004), respectively).
Continued oil price volatility in Alberta has impacted enrollments in localized
areas in this region as anticipated. Enrollment losses have centred
primarily around the before and after school age segment, with
younger age groups in full day care showing greater strength at 96%
occupancy for those children. The Company is mindful of the
unpredictability inherent in the market and continues to closely
monitor conditions and the resulting impact on operations and make
adjustments as necessary. BrightPath anticipates additional modest
pressure on enrollments moving into the third quarter of 2015.
In Ontario, the Company's
emphasis on driving enrollments and the strategies in place to
achieve this has resulted in improved occupancy in Ontario centres to 78.1% in the second quarter
of 2015 from 74.9% in the first quarter of 2015. Compared to the
three months ended June 30, 2014,
occupancies in Ontario decreased
slightly from 79.3%.
Occupancy in Stabilized centres in British Columbia increased to 85.3% in the
second quarter of 2015 from 83.4% in the second quarter of
2014.
Adjusted EBITDA, AFFO and FFO
|
|
Q2
2015
|
Q1
2015
|
Q4
2014
|
Q3
2014
|
Q2
2014
|
Q1
2014
|
Q4
2013
|
Q3
2013
|
Centre margin for the
period
|
3,976
|
3,949
|
3,741
|
2,782
|
3,670
|
3,626
|
3,209
|
2,592
|
General and
administrative expense
|
(1,258)
|
(1,192)
|
(903)
|
(1,138)
|
(1,170)
|
(1,276)
|
(1,518)
|
(1,610)
|
Taxes, other than
income taxes
|
(44)
|
(43)
|
(52)
|
(44)
|
(43)
|
(43)
|
(34)
|
(30)
|
Operating lease
expense
|
(893)
|
(895)
|
(897)
|
(799)
|
(753)
|
(747)
|
(731)
|
(726)
|
Adjusted
EBITDA
|
$
|
1,781
|
$
|
1,819
|
$
|
1,889
|
$
|
801
|
$
|
1,704
|
$
|
1,560
|
$
|
926
|
$
|
226
|
|
|
|
Q2
2015
|
Q1
2015
|
Q4
2014
|
Q3
2014
|
Q2
2014
|
Q1
2014
|
Q4
2013
|
Q3
2013
|
Net profit (loss) for
the period
|
144
|
296
|
(85)
|
(963)
|
133
|
(653)
|
(1,282)
|
(1,287)
|
Depreciation and
certain other non-cash items
|
948
|
941
|
948
|
847
|
852
|
853
|
929
|
851
|
Acquisition and
development costs
|
344
|
314
|
736
|
365
|
232
|
280
|
214
|
275
|
Restructuring
costs
|
-
|
-
|
-
|
-
|
198
|
770
|
827
|
-
|
Loss on disposition
of development land
|
-
|
-
|
34
|
268
|
-
|
-
|
-
|
-
|
FFO
|
$
|
1,436
|
$
|
1,551
|
$
|
1,633
|
$
|
517
|
$
|
1,415
|
$
|
1,250
|
$
|
688
|
$
|
(161)
|
Stock based
compensation
|
153
|
78
|
107
|
108
|
93
|
103
|
76
|
176
|
Maintenance capital
expenditure
|
(216)
|
(113)
|
(268)
|
(331)
|
(147)
|
(24)
|
(36)
|
(128)
|
AFFO
|
$
|
1,373
|
$
|
1,516
|
$
|
1,472
|
$
|
294
|
$
|
1,361
|
$
|
1,329
|
$
|
728
|
$
|
(113)
|
|
FFO for the second quarter of 2015 was $1,436 compared to $1,415 in the second quarter of 2014, an increase
of 1.5%. FFO per share for the second quarter of 2015 was
$0.012 compared to $0.012 for the same period in 2014. FFO for the
six months ended June 30, 2015 was
$2,987 ($0.025 per share) compared to $2,665 ($0.022 per
share) for the six months ended June 30,
2014, an increase of 12.1%.
AFFO for the second quarter of 2015 was $1,373 ($0.011 per
share) compared to $1,361
($0.011 per share) a year earlier.
AFFO for the six months ended June 30,
2015 was $2,889 compared to
$2,690 in the same period of 2014.
AFFO per share for the six months ended June
30, 2015 was $0.024 compared
to $0.022 for the same period in
2014, an increase of 9.1%.
Centre Portfolio Overview
A summary of the Company's number of centres and licensed
spaces, as well as average occupancies by region are provided in
the table that follows. Centres typically experience lower levels
of attendance June through August due to seasonal factors. As well,
new centre locations may exhibit lower occupancy levels during ramp
up of enrollments, thereby adversely impacting total portfolio
occupancies prior to achieving stabilization.
|
|
|
|
|
Stabilized
Centres
|
|
|
|
Three months ended
June 30,
|
|
|
|
|
2015
|
|
2014
|
Alberta
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
30
|
|
30
|
Ending Spaces
#
|
|
|
|
3,238
|
|
3,121
|
Avg. Occupancy
%
|
|
|
|
90.6
|
|
91.7
|
|
|
|
|
|
|
|
British
Columbia
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
7
|
|
7
|
Ending Spaces
#
|
|
|
|
577
|
|
576
|
Avg. Occupancy
%
|
|
|
|
85.3
|
|
83.4
|
|
|
|
|
|
|
|
Ontario
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
13
|
|
13
|
Ending Spaces
#
|
|
|
|
1,351
|
|
1,363
|
Avg. Occupancy
%
|
|
|
|
78.6
|
|
79.8
|
|
|
|
|
|
|
|
Total Stabilized
Centres
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
50
|
|
50
|
Ending Spaces
#
|
|
|
|
5,166
|
|
5,060
|
Avg. Occupancy
%
|
|
|
|
86.9
|
|
87.5
|
Non-stabilized
Centres
|
|
|
|
Three months ended
June 30,
|
|
|
|
|
2015
|
|
2014
|
Alberta
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
-
|
|
-
|
Ending Spaces
#
|
|
|
|
-
|
|
-
|
Avg. Occupancy
%
|
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
British
Columbia
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
1
|
|
-
|
Ending Spaces
#
|
|
|
|
206
|
|
-
|
Avg. Occupancy
%
|
|
|
|
43.5
|
|
-
|
|
|
|
|
|
|
|
Ontario
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
1
|
|
1
|
Ending Spaces
#
|
|
|
|
71
|
|
71
|
Avg. Occupancy
%
|
|
|
|
69.4
|
|
68.6
|
|
|
|
|
|
|
|
Total
Non-stabilized Centres
|
|
|
|
|
|
|
Ending Centres
#
|
|
|
|
2
|
|
1
|
Ending Spaces
#
|
|
|
|
277
|
|
71
|
Avg. Occupancy
%
|
|
|
|
50.1
|
|
68.6
|
Total Portfolio
(All Centres)
|
|
|
|
Three months ended
June 30,
|
|
|
|
|
2015
|
|
2014
|
Ending Centres
#
|
|
|
|
52
|
|
51
|
Ending Spaces
#
|
|
|
|
5,443
|
|
5,131
|
Avg. Occupancy
%
|
|
|
|
85.0
|
|
87.3
|
Deferred Share Units ("DSUs")
For the three months ended June 30,
2015, pursuant to the Board of Directors DSU plan, five
members of the board of directors of BrightPath elected to receive
board fees in the form of DSUs in lieu of cash remuneration,
representing $0.06 million fair value
in respect of 176,213 DSUs. The DSUs were issued on July 20, 2015.
In its May 5, 2015 news release,
the Company reported 219,462 DSUs were issued on April 2, 2015 pursuant to the Employee DSU plan.
The correct number of DSUs issued were 205,534.
Outlook
The Company remains focussed on delivering on its identified
priorities for 2015:
- To generate substantially higher Adjusted EBITDA and to
optimize the return on capital invested through:
- continuous product advancement;
- disciplined management of enrollment and mix;
- market-based pricing of tuition fees;
- continuously improving management of all costs – labour, other
operating and general and administrative; and
- realizing the cash flow from development initiatives announced
in 2014 and recently in 2015, as well as those in the pipeline but
not yet announced.
Continued oil price volatility has disrupted the Alberta market. The Company continues to
monitor conditions and the resulting impact on operations while
being mindful of the unpredictability inherent in the market. The
Edmonton market has remained
relatively strong and vibrant due to its employment base emphasis
on government, banking and insurance. The Calgary market employment base is more
focussed on the energy sector with centre enrollment slippage
having a more significant impact on before and after school
enrollments than full day child care. BrightPath anticipates
additional modest pressure on enrollments moving into the third
quarter of 2015.
In Ontario, the final stages of
full day kindergarten are complete and occupancies are generally
stabilizing at levels now approaching 80%. There are continuing
signs of an encouraging trend as compared to the first quarter of
2015, occupancies in Ontario
increased from 74.9% to 78.1%. The Company is reconfiguring rooms,
which change in mix creates downward pressure on margins but market
support for fee levels remain strong.
The expansion of BrightPath's Airdrie,
Alberta centre was completed and opened on schedule at the
beginning of July. The remaining announced developments at the
Cochrane, Creekside and West
Henday locations, for which the Company is experiencing momentum in
pre-registrations, are on schedule from a construction perspective
and expected to open beginning in late 2015 and early 2016.
The Company announced today a further expansion of its growth
pipeline with plans to develop a 245 licensed space greenfield
centre at First Capital's London Place West shopping centre in
southwest Calgary. This is the
second major greenfield transaction completed with First Capital,
and builds on the success of the Company's previous greenfield
developments.
As the Company completes its first half of operations for 2015,
it is pleased with its results to date and will continue to
demonstrate its commitment to its objectives going forward.
Concurrently, BrightPath's management and board of directors are
increasingly dismayed by the price of the Company's common shares.
We have previously outlined the disconnect between the price of the
Company's common shares and the value of its increasingly
profitable operations and owned real estate portfolio with a gross
book value of $45 million. As such,
we are pleased to validate the financial opportunity underpinning
this disconnect with the announcement today of the sale of real
estate underlying the Company's McKenzie
Towne centre. This transaction creates availability of
$7.3 million of capital which is
significant compared to the total equity market capitalization of
the Company as of today of approximately $40
million. The capital surfaced from this transaction is
anticipated to augment the available funding for the Company's
growth pipeline of development properties and the purchase of the
Company's common shares.
The Company believes that the undervaluation of its share price
is not only significant based on its current operations and real
estate holdings, but also further highlighted by the future growth
of over approximately 1,000 child care spaces which have been
announced. The cash flow per share which will be generated by this
growth pipeline is highly accretive as it is fully funded and can
be delivered without any equity dilution to shareholders.
Real estate monetization represents just one of several
initiatives management is initiating and exploring to surface value
for its shareholders.
NON- IFRS PERFORMANCE MEASURES
The Company uses "centre margin" as an indicator of centre
performance. Centre margin does not have a standardized meaning
prescribed by IFRS and therefore, may not be comparable with the
calculation of similar measures by other entities. Centre margin is
determined by deducting centre expenses from revenue. Centre
expenses include labour and direct costs and exclude operating
lease expense for leasehold properties and mortgage interest, if
any, on those properties owned by the Company.
The Company also uses Adjusted EBITDA, FFO and AFFO as
indicators of financial performance.
Adjusted EBITDA is calculated by deducting the following from
centre margin: operating lease expense, general and administrative
expenses, and taxes other than income taxes. FFO is calculated by
adjusting the net profit/loss to add back acquisition costs
expensed as incurred, depreciation and certain other non-cash
items. AFFO is calculated by adjusting FFO to add back stock based
compensation and deduct maintenance capital expenditures.
Maintenance capital expenditures consist of capital expenditures
that are capitalized for accounting purposes but are considered to
be recurring costs such as facilities and leasehold maintenance and
the replacement of learning materials, toys, furniture, appliances
and other equipment. Maintenance capital expenditures do not occur
evenly over the course of the year with these activities typically
occurring with greater intensity during the seasonally slower
summer months.
Adjusted EBITDA, FFO and AFFO do not have standardized meanings
prescribed by IFRS. The Company's method of calculating Adjusted
EBITDA, FFO and AFFO may be different from other entities and,
accordingly, may not be comparable to such other entities. Adjusted
EBITDA, FFO and AFFO: (i) do not represent cash flow from operating
activities as defined by IFRS; (ii) are not indicative of cash
available to fund all liquidity requirements, including capital for
growth; and (iii) are not to be considered as alternatives to
IFRS-based net income for the purpose of evaluating operating
performance.
Centre operating results are also analyzed based on Stabilized
and Non-stabilized centres which may not be comparable with that
used by other entities. Acquired and newly-developed centres are
deemed to be stabilized after 24 months, or sooner if normalized
occupancy levels are achieved.
Net profit/loss is impacted by, among other items, accounting
standards that require centre acquisition and transaction costs to
be expensed as incurred. As the Company executes its consolidation
and development strategy in the Canadian market, it will routinely
incur such expenses which will negatively impact the Company's
reported net profit/loss, but not Adjusted EBITDA, FFO and
AFFO.
QUARTERLY CONFERENCE CALL
BrightPath's quarterly results conference call is scheduled for
Thursday, July 30, 2015 at
10:00 am EST. The call details
are as follows:
To access the conference call by telephone, dial +1 (647)
427-7450 or +1 (888) 231-8191. Please connect approximately 10
minutes prior to the beginning of the call.
A live audio webcast of the conference call will be available
at:
http://event.on24.com/r.htm?e=1018970&s=1&k=055913084FF5CC84934F925FDCDD6670
Please connect at least 10 minutes prior to the web conference
call to ensure adequate time for any software download that may be
required to join the webcast. The webcast will be archived at the
above website for 90 days.
The conference call will be archived for replay until
Thursday, August 13, 2015 at
midnight. To access the archived conference call, dial +1 (416)
849-0833 or +1 (855) 859-2056 and enter the reservation number
76023560 followed by the number sign.
ABOUT BRIGHTPATH EARLY LEARNING INC.
BrightPath Early Learning Inc. is a Canadian leader in child
care and early education with 52 locations in major markets across
the country. Meeting the highest standards in curriculum,
nutrition, technology and recreational programing, BrightPath is
committed to providing families with the very best child
development and care Canada has to
offer.
For more information, visit
www.BrightPathKids.com/corporate (TSXV: BPE).
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking
statements regarding the future growth, results of operations,
performance and opportunities of the Company. Forward-looking
statements can generally be identified by the use of, but not
limited to, the following words: "plans", "expects" or "does not
expect", "budget", "scheduled", "estimate", "forecast", "pro
forma", "anticipate" or "does not anticipate", "believe", "intend",
"inferred", "potential" and similar expressions or statements that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements are not historical facts, but reflect the Company's
current expectations regarding future results or events based on
information currently available and what the Company believes to be
reasonable assumptions. All forward-looking statements are
qualified by these cautionary statements.
Forward-looking statements are subject to a number of risks,
assumptions and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied by such forward-looking statements. Factors that could
cause actual results or events to differ materially from those
expressed, implied or projected include, but are not limited to,
general economic conditions, the Company's ability to meet and
maintain forecasted occupancy levels, general government policies,
continued availability of government child care subsidies to
parents, unexpected costs or liabilities related to acquisitions,
construction, environmental matters, legal matters, changes in
interest rates, credit spreads and the availability of financing.
In addition, please refer to the Risks and Uncertainties section of
the Company's annual Management's Discussion and Analysis. As such,
the Company gives no assurance that actual results will be
consistent with these forward-looking statements.
Readers should not place undue reliance on any such
forward-looking statements. These forward-looking statements are
made as of the date hereof. The Company undertakes no obligation to
publicly update or revise any such statement, reflect new
information or reflect the occurrence of future events or
circumstances, except as required by securities laws.
BrightPath Early
Learning Inc.
|
|
|
|
|
|
|
|
Consolidated
Statements of Financial Position
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN
$000's)
|
|
|
|
June
30, 2015
|
|
|
December
31, 2014
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Property and
equipment
|
|
|
|
$
|
48,918
|
|
|
$
|
45,811
|
|
Goodwill and definite
life intangible assets
|
|
|
|
30,044
|
|
|
30,074
|
|
|
|
|
78,962
|
|
|
75,885
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
2,387
|
|
|
3,455
|
|
Accounts
receivable
|
|
|
|
1,503
|
|
|
1,983
|
|
Prepaid and other
expenses
|
|
|
|
1,996
|
|
|
1,515
|
|
Short term
investments
|
|
|
|
39
|
|
|
39
|
|
|
|
|
5,925
|
|
|
6,992
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
$
|
84,887
|
|
|
$
|
82,877
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Provision for
restructuring costs
|
|
|
|
$
|
-
|
|
|
$
|
45
|
|
Long term debt and
financing leases
|
|
|
|
|
19,046
|
|
|
|
19,762
|
|
Convertible
debentures – liability component
|
|
|
|
|
4,386
|
|
|
|
4,355
|
|
|
|
|
23,432
|
|
|
24,162
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
|
5,409
|
|
|
2,924
|
|
Current portion of
provision for restructuring costs
|
|
|
|
182
|
|
|
290
|
|
Deferred
revenue
|
|
|
|
634
|
|
|
878
|
|
Current portion of
debt and financing leases
|
|
|
|
1,401
|
|
|
1,418
|
|
|
|
|
7,626
|
|
|
5,510
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
|
31,058
|
|
|
29,672
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
65,795
|
|
|
65,871
|
|
Convertible
debentures – equity component
|
|
|
|
342
|
|
|
342
|
|
Equity settled share
based compensation
|
|
|
|
2,650
|
|
|
2,419
|
|
Accumulated
deficit
|
|
|
|
(14,958)
|
|
|
(15,427)
|
Total Shareholders'
Equity
|
|
|
|
53,829
|
|
|
53,205
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
|
|
$
|
84,887
|
|
|
$
|
82,877
|
BrightPath Early
Learning Inc.
|
Consolidated
Statements of Operations and Comprehensive Income
(Loss)
|
Three and six
months ended June 30, 2015 and 2014
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(CDN
$000's)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
13,499
|
|
$
|
12,791
|
|
$
|
26,745
|
|
$
|
25,154
|
Government
grants
|
|
|
413
|
|
|
390
|
|
|
814
|
|
|
730
|
Total
revenue
|
|
|
13,912
|
|
|
13,181
|
|
|
27,559
|
|
|
25,884
|
|
|
|
|
|
|
|
|
|
Centre
expenses
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
7,424
|
|
6,828
|
|
14,690
|
|
13,476
|
|
Other operating
expenses
|
|
2,512
|
|
2,683
|
|
4,944
|
|
5,112
|
Centre
margin
|
|
3,976
|
|
3,670
|
|
7,925
|
|
7,296
|
|
|
|
|
|
|
|
|
|
Operating
leases
|
|
893
|
|
753
|
|
1,788
|
|
1,500
|
Finance
|
|
365
|
|
388
|
|
713
|
|
740
|
General and
administrative
|
|
1,258
|
|
1,170
|
|
2,450
|
|
2,446
|
Taxes, other than
income taxes
|
|
44
|
|
43
|
|
87
|
|
86
|
Restructuring
|
|
-
|
|
198
|
|
-
|
|
968
|
Acquisition and
development
|
|
344
|
|
232
|
|
658
|
|
512
|
Stock-based
compensation
|
|
153
|
|
93
|
|
231
|
|
196
|
Depreciation and
amortization
|
|
779
|
|
713
|
|
1,566
|
|
1,427
|
|
|
3,836
|
|
3,590
|
|
7,493
|
|
7,875
|
|
|
|
|
|
|
|
|
|
Profit (loss) before
other income
|
|
140
|
|
80
|
|
432
|
|
(579)
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
4
|
|
53
|
|
8
|
|
59
|
|
|
|
|
|
|
|
|
|
Net Profit (Loss)
and Total Comprehensive Income (Loss)
|
|
$
|
144
|
|
$
|
133
|
|
$
|
440
|
|
$
|
(520)
|
|
|
|
|
|
|
|
|
|
Net profit (loss) per
share
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.001
|
|
$
|
0.001
|
|
$
|
0.004
|
|
$
|
(0.004)
|
BrightPath Early
Learning Inc.
|
Consolidated
Statements of Changes in Shareholders' Equity
|
Six months ended
June 30, 2015 and 2014
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN
$000's)
|
|
Share
Capital
|
|
Convertible
Debentures –
Equity
Component
|
|
Equity Settled
Share Based
Compensation
|
|
Accumulated
Deficit
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January
1, 2014
|
$
|
66,030
|
|
$
|
342
|
|
$
|
2,026
|
|
$
|
(13,911)
|
|
$
|
54,487
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
-
|
|
-
|
|
196
|
|
-
|
|
196
|
Net loss and
comprehensive loss
|
|
-
|
|
-
|
|
-
|
|
(520)
|
|
(520)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June
30, 2014
|
$
|
66,030
|
|
$
|
342
|
|
$
|
2,222
|
|
$
|
(14,431)
|
|
$
|
54,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January
1, 2015
|
$
|
65,871
|
|
$
|
342
|
|
$
|
2,419
|
|
$
|
(15,427)
|
|
$
|
53,205
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
-
|
|
-
|
|
231
|
|
|
|
-
|
231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares purchased for
cancellation
|
|
|
(76)
|
|
-
|
|
-
|
|
29
|
|
|
(47)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit and
comprehensive income
|
|
|
-
|
|
-
|
|
-
|
|
440
|
|
440
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June
30, 2015
|
$
|
65,795
|
|
$
|
342
|
|
$
|
2,650
|
|
$
|
(14,958)
|
|
$
|
53,829
|
BrightPath Early
Learning Inc.
|
Consolidated
Statements of Cash Flow
|
Three and six
months ended June 30, 2015 and 2014
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(CDN
$000's)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Cash provided by
(used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net profit
(loss)
|
|
$
|
144
|
|
$
|
133
|
|
$
|
440
|
|
$
|
(520)
|
Items not affecting
cash:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
779
|
|
713
|
|
1,566
|
|
1,427
|
|
Depreciation included
in operating costs
|
|
38
|
|
38
|
|
75
|
|
75
|
|
Finance
costs
|
|
365
|
|
388
|
|
713
|
|
740
|
|
Stock-based
compensation
|
|
153
|
|
93
|
|
231
|
|
196
|
|
Change in fair value
of convertible debenture liability component
|
|
-
|
|
(50)
|
|
-
|
|
(50)
|
Change in non-cash
working capital
|
|
1,392
|
|
(678)
|
|
2,118
|
|
(1,030)
|
Change in non-current
portion of provision for restructuring costs
|
|
-
|
|
(69)
|
|
(45)
|
|
63
|
Cash generated by
operations
|
|
2,871
|
|
568
|
|
5,098
|
|
901
|
|
|
|
|
|
|
|
|
|
Finance costs
paid
|
|
(372)
|
|
(387)
|
|
(601)
|
|
(602)
|
Net cash generated by
operating activities
|
|
2,499
|
|
181
|
|
4,497
|
|
299
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Property and
equipment
|
|
(3,867)
|
|
(841)
|
|
(4,718)
|
|
(1,178)
|
|
|
(3,867)
|
|
(841)
|
|
(4,718)
|
|
(1,178)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Loan
repayments
|
|
(328)
|
|
(287)
|
|
(655)
|
|
(573)
|
Financing transaction
costs
|
|
(32)
|
|
(30)
|
|
(32)
|
|
(47)
|
Finance lease
repayments
|
|
(66)
|
|
(61)
|
|
(130)
|
|
(121)
|
Shares purchased for
cancellation
|
|
(14)
|
|
-
|
|
(30)
|
|
-
|
|
|
(440)
|
|
(378)
|
|
(847)
|
|
(741)
|
|
|
|
|
|
|
|
|
|
Change in
Cash
|
|
(1,808)
|
|
(1,038)
|
|
(1,068)
|
|
(1,620)
|
Cash at beginning of
period
|
|
4,195
|
|
3,358
|
|
3,455
|
|
3,940
|
Cash at end of
period
|
|
$
|
2,387
|
|
$
|
2,320
|
|
$
|
2,387
|
|
$
|
2,320
|
SOURCE BrightPath Early Learning Inc.