CALGARY, March 6, 2012 /CNW/ - Edleun Group, Inc. ("Edleun" or the
"Company") , the leading provider of quality early childhood
education and care in Canada, announced today its operational and
financial results for the three and 12 month periods ended December
31, 2011. Highlights for the fourth quarter ended December 31, 2011
include: -- A 44% increase in the number of licensed child care
spaces in operation from 2,539 in the third quarter 2011 to 3,660
at the end of the fourth quarter; o The majority of these spaces
were acquired late in the fourth quarter and so the revenue
therefrom will be reported in the first quarter of 2012 -- For
"same centres" in operation during the current and prior year's
fourth quarter: o occupancy increased from 76% to 87% o revenues
increased by 15% and o centre margin (in dollars) increased 26% --
Highest reported quarterly Adjusted Funds From Operations ("AFFO"),
the company's principal measure of profitability, of $211,000; --
Entry into the Ontario market through the acquisition of three
centres in the Greater Toronto Area and three in the Windsor area;
-- Acquisition of three centres and underlying real estate in the
Calgary, Alberta area; and -- Closing of the acquisition of a
previously announced property held for development in Kelowna,
British Columbia for $1 million. Highlights for the period
subsequent to year end include: -- Entered an into an agreement
with Canadian Apartment Properties Real Estate Investment Trust
("CAPREIT"), one of Canada's largest rental apartment owners, to
locate child care properties operated by Edleun in selected CAPREIT
properties; and -- Announcement of conditional acquisition of a
seventh Ontario centre located in Oakville, Ontario comprising 195
spaces for $800,000. "2011 was highlighted by the initiation of our
national expansion strategy that saw us acquire centres in British
Columbia and Ontario and we began to see the positive impact on our
financial performance in the second half of the year," said Ty
Durekas, Chief Executive Officer of Edleun. "These acquisitions set
up 2012 very nicely with 83% more child care spaces on line or
coming on line through new development compared with the quarter
ended September 30, 2011. We continue to focus on a robust pipeline
of acquisition opportunities which we believe will drive further
growth in our financial performance in 2012." "It is gratifying to
see the Company achieve strong operating results as reflected by
the same centre performance outlined herein," said Dale Kearns,
Chief Financial Officer. This attests both to the merit of the
Company's strategy as well as the success of its post acquisition
physical improvements and operational programs in our early
learning and care centres. It is also gratifying to see the Company
achieve positive operating results as measured by AFFO in the
Company's first full fiscal year of operations." Financial review
Three months ended December 31, 2011 Fourth quarter revenue was
$5.8 million, an 87% increase over the same period a year earlier
and a 20% increase on a sequential basis compared to the third
quarter of 2011. Same centre revenue increased by 15% when compared
with the same three month period in fiscal 2010. Revenue from
acquisitions made in the fourth quarter was minimal due to their
purchase late in the quarter; sequential revenue increase was
otherwise higher due to seasonally strong results and occupancy
levels that trended higher overall. Portfolio centre margin (see
Non-IFRS Performance Measures below for centre margin definition)
in the fourth quarter improved to $1.8 million, 30% higher than
reported for the third quarter and 82% higher than in the same
period a year earlier. Same centre margin for the three month
period improved by 26% year over year. Centre margin as a
percentage of revenue was 31% in the fourth quarter of 2011, two
percentage points higher on a sequential quarter basis as a result
of summer seasonality in the third quarter. On a year over
year basis, centre margin for the fourth quarter declined slightly
from 32% to 31%, largely a function of higher program spending on
curriculum and the impact of integrating the British Columbia
centres. ($000) except Q4 2011 Q3 2011 Q2 2011 Q12011 Q4 2010 Q3
2010 Q2 2010 per (47-day share and period) centre statistics
Revenue $ 5,840 $ 4,877 $ 3,958 $ 3,502 $ 3,124 $ 2,270 $ 867
Centre margin 1,841 1,406 1,286 1,194 1,005 616 273 Centre margin %
31% 29% 32% 34% 32% 27% 31% Net loss (811) (957) (541) (249) (678)
(896) (1,724) Loss per share (0.007) (0.008) (0.006) (0.003)
(0.007) (0.009) (0.033) FFO 119 (314) (22) 71 (193) (564) (1,445)
AFFO 211 (329) 100 136 (60) (432) (206) Cash 1,911 18,026 24,270
7,035 8,662 12,856 22,769 Available under credit facility 22,100
24,800 24,800 24,800 - - - # of centres in operation 38 29 22 20 20
17 11 # of centres under development or redevelopment 5 3 2 1 - - -
Licensed spaces in operation 3,660 2,539 2,038 1,833 1,815 1,527
1,061 Spaces under development or redevelopment 803 569 494 247 - -
- Total Spaces 4,463 3,108 2,532 2,080 1,815 1,527 1,061 Note: Net
income for 2010 restated to reflect IFRS Adjusted Funds from
Operations ("AFFO") (see Non-IFRS Performance Measures below for
AFFO and FFO definitions) for the fourth quarter of 2011 was
$211,000 or $0.002 per share compared to a loss of $(329,000) or
$(0.003) per share in the immediately preceding third
quarter. The increase of $540,000 was partially due to the
summer seasonality factors outlined previously. Funds from
Operations ("FFO") for the fourth quarter increased over the
previous quarter by $433,000 to $119,000. "We are enthusiastic
about our prospects for 2012," said Dale Kearns. "Including
funds on hand and availability under our bank credit facility; we
begin 2012 with $24 million of non-dilutive capital available for
our acquisition and development programs." Three months ended
($000) Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Net loss for the
period $ (810) $ (957) $ (541) $ (249) $ (678) Depreciation 302 313
238 205 178 Other non-cash items 23 - - - - Property acquisition
costs 605 330 281 115 307 FFO $ 119 $ (314) $ (22) $ 71 $ (193)
Stock based compensation - 69 option grants 104 166 96 132
Maintenance capital (84) expenditures (12) (44) (31) - AFFO $ 211 $
(329) $ 100 $ 136 $ (61) Net loss for the fourth quarter of 2011
was $(810,000) or $(0.007) per share, a decrease of $146,000
compared with the loss reported for the third quarter of 2011. In
anticipation of greater growth in coming periods, property
acquisition costs, which under new IFRS accounting standards must
be expensed as incurred, rose in each quarter throughout 2011.
Clearly these expenditures benefit the Company on a long term
basis, and are critical to the Company's strategy of consolidating
the Canadian child care market. Years ended December 31, $(000)
except per share amounts and centre count 2011 2010(1) Centres in
operation at year end 38 20 Revenue 18,177 6,261 Centre margin
5,727 1,894 General and administrative 4,642 2,917 Acquisition
costs 1,330 790 Depreciation and amortization 1,058 306 Net loss
(2,557) (3,348) Net loss per share (0.024) (0.055) AFFO 118 (748)
AFFO per share 0.001 (0.012) ((1)) Represents only 7 ½ months
of operating activity as initial property acquisitions occurred in
May, 2010 For the year ended December 31, 2011 the Company reported
revenues of $18,177,000 (December 31, 2010 - $6,261,000), centre
margin of $5,727,000 (December 31, 2010 - $1,894,000) and a loss of
$2,557,000 (December 31, 2010 - $3,348,000). The increases in
revenue and centre margin when compared with results for 2010
resulted from a larger portfolio of centres combined with organic
growth. Portfolio centre margin as a percentage of revenue was 32%
for the year ended December 31, 2011 compared with 30% for the year
ended December 31, 2010. The increase in centre margins can
be attributed to organic growth within the centre portfolio as a
result of the Company completing its renovation program on newly
acquired centres and implementation of various new programming
including educational curriculum and certified nutrition meal
programs. Net loss for the year ended December 31, 2011 was
$(2,557,000) or $(0.024) per share compared with a net loss of
$(3,348,000) or $(0.055) per share for the year ended December 31,
2010 for reasons noted above. Notwithstanding the fact that the
Company is in the early stages of its growth strategy as well
as achievement of economies of scale inherent in its
operating and cost structure, it is noteworthy that the
Company delivered positive AFFO - the Company's primary measure of
financial performance - of $118,000 for 2011, the Company's first
full fiscal year of operation. This represents a significant
increase of $866,000 over 2010 AFFO during which time the Company
commenced operations. Outlook: The Company is poised to
significantly increase its AFFO in the first quarter of 2012, and
for the balance of the year based on the following drivers and
assumptions. Since the Company's initial six Ontario based
acquisitions were completed in mid-December 2011, and three Calgary
based acquisitions closed in November 2011, these nine acquisitions
with 1,111 licensed child care spaces had limited impact on the(
)fourth quarter 2011 financial results. In contrast, these
acquisitions will provide a full year of operations benefiting the
Company's financial performance in 2012. In addition, the Company's
"state of the art" new child care centre developments in Calgary,
the Chestermere Learning Centre and the McKenzie Towne Learning
Centre, will begin to contribute to the Company's results as they
come on stream beginning in the summer of 2012. In total these
centres will add approximately 500 licensed child care spaces to
these underserved communities. Furthermore the redevelopment of the
Lawrence Learning Centre in Kelowna, British Columbia and the
Highland Learning Centre in Calgary, Alberta, combined with the
closing of the previously announced seventh Ontario acquisition
with 127, 75 and 195 licensed child care spaces respectively, are
expected to be completed late in the first quarter or in the second
quarter of 2012. In total these centres, fully funded by the
Company's currently available capital resources will further
contribute to AFFO from 709 licensed child care spaces, without
requiring dilution to shareholders. "The Company has a significant
acquisition pipeline, with a quantity and quality at least equal to
any point since inception of its operations," said Dale Kearns.
"The Company remains significantly underleveraged with debt
capital. With its current cash resources, its positive cash flow
from operations, and $22.5 million available under its credit
facility, the Company is well-positioned to advance its acquisition
pipeline using its currently in-place capital without requiring
dilution to shareholders. As such, these initiatives should prove
to be highly accretive to the Company's financial results." Non
IFRS Performance Measures The Company's business, which is focused
on the acquisition and development of Canadian child care centres
and includes the ownership of a significant portfolio of real
estate, reports net income/loss that includes deduction for
property acquisition costs and non-cash charges such as
depreciation and stock based compensation expense. Reflecting these
factors and consistent with the practice of the Canadian real
estate industry, the Company focuses on FFO and AFFO as key and
relevant financial metrics to measure and compare operating
performance. The Company believes that FFO and AFFO are meaningful
non-IFRS supplemental financial measures. FFO and AFFO do not have
standardized meanings prescribed by IFRS. The Company's
method of calculating FFO and AFFO may be different from other
entities and, accordingly, may not be comparable to such other
entities. 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. The Company uses centre margin as a
performance indicator of child care centre operating results.
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 exclude net rents due under leases for leasehold
properties and mortgage interest, if any, on properties owned by
the Company. Net income / loss is impacted by, among other items,
accounting standards that require child care centre acquisition and
transaction costs to be expensed as incurred. As the Company
executes its consolidation and development strategy in the Canadian
child care market, it will routinely incur such expenses which will
negatively impact the Company's reported net income / loss, but not
FFO and AFFO. Conference Call Edleun Group Inc. will hold a
conference call on Wednesday March 7th at 10:30 am Eastern Time, to
discuss the results of the fourth quarter of fiscal 2011. The
Company's full Financial Statements and Management's Discussion and
Analysis will be available on SEDAR at www.sedar.com. To access the
conference call by telephone, dial (647) 427-7450 or
1-888-231-8191. Please connect approximately 10 minutes prior to
the beginning of the call. The conference call will be archived for
replay until Wednesday, March 14, 2012, at midnight. To access the
archived conference call, dial (416) 849-0833 or 1-855-859-2056 and
enter the reservation number 59280685 followed by the number sign.
A live audio webcast of the conference call will be available at:
http://www.newswire.ca/en/webcast/detail/931743/995775. Please
connect at least 10 minutes prior to the 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. About Edleun Group Inc. Edleun is the leading provider
of high-quality, community-based Early Learning & Care child
care centres in Canada offering early education and child care
services to children ages six weeks to 13 years. Edleun is
committed to preparing children for the next step in their
education and life, offering families and employers access to and
choice of quality early childhood education programs, as well as
enhanced opportunities and career advancement for Early Childhood
Educators. Publicly traded on the Toronto Stock Exchange , the
Company's objectives include the acquisition and subsequent
improvement of existing child care centres and developing new
state-of-the-art Early Learning and Care Centres in underserved
Canadian communities. The Company currently has a total 45 centres
in its portfolio including: 38 centres in operation and 5 in
various stages of development or redevelopment representing 4,463
licensed child care spaces. Forward-Looking Statements Certain
statements in this Release which are not historical facts may
constitute forward-looking statements or forward-looking
information within the meaning of applicable securities laws
("forward-looking statements"). Any statements related to Edleun's
projected revenues, earnings, growth rates, revenue mix, staffing
and resources, and product plans are forward looking statements as
are any statements relating to future events, conditions or
circumstances. The use of terms such as "believes", "anticipated",
"expected", "projected", "targeting", "estimate", "intend" and
similar terms are intended to assist in identification of these
forward-looking statements. Readers are cautioned not to place
undue reliance upon any such forward-looking statements. Such
forward-looking statements are not promises or guarantees of future
performance and involve both known and unknown risks and
uncertainties that may cause the actual results, performance,
achievements or developments of Edleun to differ materially from
the results, performance, achievements or developments expressed or
implied by such forward-looking statements. Forward-looking
statements are based on management's current plans, estimates,
projections, beliefs and opinions. Except as required by law,
Edleun does not undertake any obligation to update forward-looking
statements should assumptions related to these plans, estimates,
projections, beliefs and opinions change. The Company undertakes no
obligation, except as required by law, to update publicly or
otherwise any forward-looking information, whether as a result of
new information, future events or otherwise, or the above list of
factors affecting this information. Many factors could cause the
actual results of Edleun to differ materially from the results,
performance, achievements or developments expressed or implied by
such forward-looking statements. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Consolidated Statements
of Financial Position December 31, December 31, January1, (CDN
$000's) 2011 2010 2010 Assets Non-current assets Property and
equipment $ 33,434 $ 18,717 $ - Goodwill 22,940 9,183 - Definite
life intangible assets 340 - - 56,714 27,900 - Current assets Cash
and cash equivalents 1,911 8,662 - Accounts receivable 1,589 603 -
Prepaid and other expenses 3,606 243 - Short term investments 39
204 - 7,145 9,712 - Total Assets $ 63,859 $ 37,612 $ - Liabilities
Non-current liabilities Loans payable $ 2,260 $ - $ - Deferred tax
liability 42 34 - 2,302 34 - Current liabilities Accounts payable
and accrued 1,369 liabilities 2,877 75 Deferred revenue 399 80 -
3,276 1,449 75 Total Liabilities 5,578 1,483 75 Shareholders'
Equity Share capital 62,931 38,463 - Equity settled share based
compensation 1,330 1,089 - Accumulated deficit (5,980) (3,423) (75)
Total Shareholders' Equity 58,281 36,129 (75) Total Liabilities and
$ 37,612 $ Shareholders' Equity $ 63,859 - Consolidated Statements
of Operations and Comprehensive Loss Three months ended Year ended
December 31, December 31, (CDN $000's) 2011 2010 2011 2010 Revenue
$ 5,840 $ 3,124 $ 18,177 $ 6,261 Centre expenses Salaries, wages
and benefits 2,944 1,566 9,107 3,316 Other operating expenses 1,055
554 3,343 1,051 1,841 1,004 5,727 1,894 Lease expense 350 148 906
297 General and administrative 1,299 915 4,642 2,917 Acquisition
costs 605 307 1,330 790 Stock-based compensation 104 132 434 941
Depreciation and amortization 302 178 1,058 306 Finance costs 45 -
157 - 2,705 1,680 8,527 5,251 Loss before other income (862) (676)
(2,800) (3,357) Other income 60 32 251 43 Loss before income taxes
(802) (644) (2,549) (3,314) Deferred tax expense 8 34 8 34 Net Loss
and Total $ (2,557) $ (3,348) Comprehensive Loss $ (810) $ (678)
Net loss per share Basic and diluted $ (0.007) $ (0.007) $ (0.024)
$ (0.055) Weighted average number of common shares Basic and
diluted 116,338,199 92,227,801 107,797,856 60,430,314 Consolidated
Statements of Changes in Shareholders' Equity Equity Settled Share
Share Based Accumulated Shareholders' (000's) Capital Compensation
Deficit Equity Balance, $ (75) $ (75) January 1, 2010 $ - $ -
Reverse takeover transaction Share capital 901 acquired from legal
parent 901 - - Deficit and (117) contributed surplus elimination of
legal parent (117) - - Equity 300 consideration - finders fee 300 -
- Equity 1,000 consideration - asset purchase 1,000 - - Share
issuance 40,742 - - 40,742 Share issuance (3,921) costs (3,921) - -
Fair value of - warrants issued (448) 448 - Exercise stock 6
options 6 - - Stock-based 641 compensation - 641 - Net loss and
(3,348) comprehensive loss - - (3,348) Balance, $ (3,423) $ 36,129
December 31, 2010 $ 38,463 $ 1,089 Balance, $ (3,423) $ 36,129
January 1, 2011 $ 38,463 $ 1,089 Share issuance 25,003 - - 25,003
Share issuance - (1,494) costs (1,494) - Stock-based - 434
compensation - 434 Warrants - 196 exercised 232 (36) Stock options
- 570 exercised 727 (157) Net loss and (2,557) (2,557)
comprehensive loss - - Balance, $ (5,980) $ 58,281 December 31,
2011 $ 62,931 $ 1,330 Consolidated Statements of Cash Flow Three
monthsended Year ended December 31, December 31, (000's) 2011 2010
2011 2010 Cash provided by (used in): Operating Activities: Net
loss $ (810) $ (678) $ (2,557) $ (3,348) Items not affecting cash:
Depreciation 302 178 1,058 306 Amortization of deferred financing
costs 15 - 59 - Stock-based compensation 104 132 434 941 Deferred
tax expense 8 34 8 34 Change in non-cash working capital 150 356
(1,524) 822 (231) 22 (2,522) (1,245) Investing Activities
Acquisitions (14,800) (2,240) (20,812) (22,692) Reverse takeover
cash acquisition - - - 558 Property and equipment (3,655) (1,905)
(10,116) (4,576) Short term investments 49 (49) 165 (204) (18,406)
(4,194) (30,763) (26,914) Financing Activities Proceeds of share
issue - - 25,003 40,742 Share issuance costs - (22) (1,494) (3,921)
Exercise of warrants - - 196 - Exercise of options 262 - 569 - Loan
proceeds 2,500 - 2,500 - Finance costs (240) - (240) - 2,522 (22)
26,534 36,821 Change in Cash and CashEquivalents (16,115) (4,194)
(6,751) 8,662 Cash and cash equivalents, beginning of period 18,026
12,856 8,662 - Cash and cash equivalents, end of $ 1,911 $ 8,662
year $ 1,911 $ 8,662 Edleun Group, Inc.
CONTACT: please contact Dale Kearns, Chief Financial Officer of
EdleunGroup,Inc. at (403) 705-0362 ext. 406, or Nick Hurst of the
Equicom Group,Inc. at (403) 218-2835.
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