CALGARY, April 4, 2013 /CNW/ - Edleun Group, Inc.
("Edleun" or the "Company") (TSX-V: EDU), the leading
provider of quality early childhood education and care in
Canada, announced today its
operational and financial results for the three and 12 months ended
December 31, 2012.
The Company's Annual Financial Statements and
Management's Discussion and Analysis are available at
www.edleungroup.com and on SEDAR at www.sedar.com.
Child care centre portfolio highlights for the
2012 fiscal year include:
- Increasing licensed capacity by 35%; acquisitions added 643
spaces and increased licensed capacity from development and
redevelopment activities added 709 spaces;
- Acquiring two "turn around" operating child care centres in
Oakville and Burlington, Ontario in two separate
transactions for total consideration of $1.26 million. These facilities are situated in
leased premises and added 248 licensed child care spaces to the
Company's portfolio, representing an opportunistic purchase to
reposition and expand enrollment at these centres;
- Completing redevelopment of the Highland Park Learning Centre
in Calgary and commencing
operations adding 75 licensed child care spaces to the Company's
portfolio;
- Acquiring two Montessori child care centres in the Greater Toronto Area of Ontario and one operating child care centre in
Airdrie, Alberta in two separate
transactions for total consideration of $1.1
million. These facilities are situated in leased premises
and added 245 licensed child care spaces to the Company's
portfolio;
- Completing redevelopment of the Lawrence Learning Centre in
Kelowna, British Columbia with 140
licensed spaces and acquiring a child care centre that relocated
into this premise in July 2012;
- Completing development of the Company's first greenfield
development project, the Chestermere Learning Centre near
Calgary, adding 247 licensed
spaces with operations commencing in July
2012;
- Appointing Ms. Mary Ann Curran
as Chief Executive Officer;
- Appointing Mr. Dean Michaels as
Senior Vice President Acquisitions and Development;
- Acquiring three operating Montessori child care centres in
Ottawa, Ontario. These facilities
are situated in leased premises and added 150 licensed child care
spaces to the Company's portfolio. A fourth centre acquired as part
of the same agreement closed in February
2013 and added a further 47 licensed spaces. Total
consideration for the four centres was $2.3
million; and
- Completion and opening of the McKenzie Towne Learning Centre,
the Company's second new greenfield development providing 247
licensed child care spaces in the south Calgary community.
Key Business Metrics
Stabilized Portfolio performance highlights
- Stabilized centres (see below for non-IFRS definitions)
improved their occupancy level from 86.8% to 90.1% during
2012;
- Year over year revenue growth in stabilized centres was 9.2%
from $15 million to $16.3 million;
and
- Stabilized centre margin as a percentage of revenue for the
twelve months ended December 31, 2012
was 32.2% compared to 28% for centres acquired in 2011 and
9.8% for centres acquired or opened in 2012; a strong indicator of
centre performance trends under the Company's ownership.
New centre developments:
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Highland
Park |
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Chestermere |
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Lawrence
Avenue |
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McKenzie
Towne |
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Total |
Capital invested ($ millions) |
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1.6 |
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6.1 |
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3.1 |
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6.1 |
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16.9 |
Spaces # |
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75 |
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247 |
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140 |
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247 |
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709 |
Average occupancy % in Q4 2012 |
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91.3 |
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62.0 |
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72.9 |
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73.3 |
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71.2 |
Current occupancy % at date of this MD&A |
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94.7 |
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72.0 |
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80.0 |
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96.5 |
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84.5 |
Financial results for the 2012 fiscal year reflect:
A net loss of $4.5
million ($0.037 per share), up
from $2.6 million in 2011
($0.024 per share). The
increased loss included, in part, the effects of:
- Revenue of $36.4 million; an
increase of 101% from 2011;
- Centre margin of $10.0 million
compared with $5.7 million a year
earlier, with centre margin as a percentage of revenue declining
from 32% to 28% due to the early stage financial performance from
spaces added in 2012 through acquisition and development, which
were in the process of increasing enrollment;
- Increase in depreciation expense of $1.1
million; and
- Expenses that included one-time costs related to:
-
- Implementation of ERP system, legal amalgamations, severance
and recruiting, $1,644; and
- Provision for terminated projects expense, $540.
Adjusted EBITDA of $1.8
million; an increase of $1.6
million from 2011.
Funds from Operations (FFO) of $864,000 compared with negative $146,000 in the prior year reflecting early stage
financial performance from spaces added in 2012 through acquisition
and development. These acquisitions and developments were primarily
funded by debt; the interest related to this debt substantially
reduces FFO during the enrollment ramp up period at these
centres.
Adjusted Funds From Operations ("AFFO") of
$1,213 compared with $118 in the prior year.
"During 2012 Edleun reached a milestone with 50
centres in its portfolio, including two state of the art facilities
in Calgary equipped with the
latest resources for child care and early learning. The basic
premise for child care in Canada
remains unchanged: there are many underserved markets that offer
the opportunity to provide quality child care. We are
exceptionally pleased with the results of our first two greenfield
developments. These projects are three times the scale of our
typical acquisition. While somewhat delayed in completion of
construction, the projects were developed at a cost of $750,000 less than budgeted. In total we
invested $17 million in creating 709
new child care spaces and based on their rapid pace of enrollment
will begin to fully contribute to our net income and cash flow in
2013", said Mary Ann Curran, Chief
Executive Officer.
"During 2013 growth will be augmented by the
newly opened Alberta and
British Columbia centres;
and execution of the turnaround of the Oakville and Burlington centres acquired through distressed
sales. In 2012 our centres in Alberta continued to perform well and improve
over 2011. Following the initial year of operations in Ontario, we are effecting a select
repositioning in response to a somewhat faster than anticipated
pace of implementation of full day kindergarten. We believe
that organic growth will continue to improve. Completion of
the implementation of the Enterprise Resource Planning system
("ERP") will enable the Company to contemplate greater efficiencies
in managing its corporate and labour costs. The objective is clear:
to maximize return on the capital invested that underpins our child
care centre portfolio," said Dale
Kearns, President and Chief Financial Officer.
Financial Review
($000's except where otherwise noted and per
share amounts)
Selected Quarterly Information (1)
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Q4
2012 |
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Q3
2012 |
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Q2
2012 |
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Q1
2012 |
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Q4 2011 |
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Q3 2011 |
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Q2 2011 |
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Q1 2011 |
Revenue |
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$ |
10,594 |
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$ |
8,818 |
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$ |
8,984 |
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$ |
8,030 |
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$ |
5,840 |
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$ |
4,877 |
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$ |
3,958 |
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$ |
3,502 |
Centre margin1 |
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2,731 |
2,108 |
2,709 |
2,475 |
1,841 |
1,406 |
1,286 |
1,194 |
Centre margin % |
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26 |
24 |
30 |
31 |
31 |
29 |
32 |
34 |
Adjusted EBITDA2 |
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590 |
(74) |
616 |
673 |
192 |
(294) |
137 |
144 |
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FFO1 |
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228 |
(285) |
379 |
542 |
119 |
(314) |
(22) |
71 |
AFFO1 |
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320 |
(400) |
566 |
727 |
211 |
(329) |
100 |
136 |
Net loss1,2 |
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(1,587) |
(1,543) |
(539) |
(793) |
(810) |
(957) |
(541) |
(249) |
Per share amounts: |
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Net loss |
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(0.013) |
(0.013) |
(0.005) |
(0.007) |
(0.007) |
(0.008) |
(0.006) |
(0.003) |
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FFO |
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0.002 |
(0.002) |
0.003 |
0.005 |
0.001 |
(0.003) |
(0.002) |
0.001 |
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AFFO |
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0.003 |
(0.003) |
0.005 |
0.006 |
0.002 |
(0.003) |
0.001 |
0.001 |
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# of centres in operation |
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50 |
46 |
45 |
40 |
38 |
29 |
22 |
20 |
Licensed spaces in operation |
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4,943 |
4,615 |
4,368 |
3,908 |
3,660 |
2,539 |
2,038 |
1,833 |
Notes: |
1. |
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During the fourth quarter of 2012, management identified an
error in the previously reported results for the first, second and
third quarters of 2012. This error resulted in Salaries, Wages and
Benefits under Centre Expenses for those quarters being understated
by $62, $184 and $14, respectively. All amounts reported in this
press release and the Company's MD&A have been amended to
correct the error - see Adjusted EBITDA, FFO and AFFO table in the
MD&A for further details. This error has no impact on the
annual financial statements at December 31, 2012. |
2. |
|
2010 amounts have been restated from Canadian GAAP to
IFRS. |
Results of Operations for the three months
ended December 31, 2012
For the three months ended December 31, 2012, the Company reported revenue
of $10,594 (December 31, 2011 - $5,840) and centre margin of $2,731 (December 31,
2011 - $1,841). Year over year
revenue increase was due primarily to a higher number of spaces
available for enrollment.
Centre margin as a percentage of revenue
declined from 31% to 26% due to certain centres acquired or opened
in 2012 operating at lower than average levels of enrollment,
resulting in financial performance at or near breakeven levels.
Stabilized centre margin was 32.2% compared with 34.2% a year
earlier, the slight decline due primarily to higher labour costs in
the tight Alberta market. As noted
above, ramp up in enrollment for spaces in the newly opened
facilities in the Calgary area was
substantially delayed; and centres acquired in Ontario under distressed sale proceedings
remain in the early stages of repositioning and
stabilization. The impact of sooner than expected
implementation of full day kindergarten in Ontario was experienced beginning in the third
quarter of 2012.
General and administrative expense represents
the cost of corporate level activities and includes executive
salaries, accounting, finance and costs necessary to operate a
public Company. General and administrative costs for the
fourth quarter of 2012 were $1,466
compared to $1,501 in the third
quarter of 2012 and $1,212 in the
fourth quarter of 2011. Fourth quarter expenditures included
one-time costs of approximately $273
primarily related to the Company's ongoing implementation of its
ERP and the simplification of its corporate structure through a
series of amalgamations to better enable tax planning and reduce
the significant administrative costs. The remaining costs related
to these undertakings and commitments are expected to be largely
completed by the end of the second quarter of 2013.
In accordance with IFRS 3 Business
Combinations, the Company expenses all business acquisition
costs in the period they are incurred. Acquisition and development
costs include costs associated with the acquisition of existing
child care centres and the development of real estate for new child
care centres. Such costs include advisory, legal, appraisal, due
diligence and other professional fees, and direct expenses of the
Company's internal acquisitions and development group. Acquisition
costs for the fourth quarter of 2012 were $430 compared to $497 in the third quarter of 2012 and
$605 during the fourth quarter of
2011.
Terminated projects expense of $540 was recorded in the fourth quarter of 2012
compared to nil in the third quarter of 2011 and nil in the fourth
quarter of 2011. Terminated project expense includes costs incurred
to pursue the development of two greenfield sites which were
initiated by the Company's prior senior management team and
for which the Company has chosen to not proceed. Matters related to
restrictions on future subdivision of a land parcel, among other
things, and the size and nature of a proposed child care centre on
the perimeter of an Alberta Census Metropolitan Area gave rise to
the decision to terminate these projects. In the case of one
location, the Company continues to deal with the developer in
seeking alternative opportunities. While the Company will
continue to incur costs in advance of proceeding with development
projects, current management controls and processes will minimize
the potential for future losses of this nature.
Adjusted EBITDA for the fourth quarter of 2012
was $590 compared to $(74) in the third quarter of 2012 and
$192 in the fourth quarter of 2011.
Adjusted EBITDA improved by $664 on a
sequential quarterly basis due to summer seasonality factors in the
third quarter and the addition of three acquired centres and one
development centre in the fourth quarter of 2012. Adjusted EBITDA
for the fourth quarter of 2012 increased by $398 compared to the fourth quarter of 2011 due
to the addition of 1,283 licensed spaces to the Company's portfolio
during 2012, as well realizing a full quarter's impact of the 263
and 858 licensed spaces added in November
2011 and December 2011,
respectively, offset by some of the one time costs outlined
herein.
AFFO for the fourth quarter of 2012 was
$320 compared to $(400) in the third quarter of 2012 and
$211 for the fourth quarter of
2011. Early stage centre margin levels from spaces added in
2012 through acquisition and development activities, several of
which were yet to achieve breakeven, did not cover borrowing costs
under interest bearing indebtedness. Enrollment levels in two
greenfield development projects have since increased to 97% and 72%
as at the date of this release and have positive centre margin.
AFFO increased by $720 on a
sequential quarterly basis for reasons consistent with those
described above coupled with a reduction in maintenance capital
expenditure of $203, partially offset
by higher interest expense. AFFO increased by $109 compared to the fourth quarter of 2011 with
the increase due to capacity, largely offset by an increase in
interest expense, maintenance capex and income tax expense.
FFO for the fourth quarter of 2012 was
$228 compared to $(285) for the third quarter of 2012 and
$119 for the fourth quarter of 2011,
the trends for which were substantially the same as AFFO.
Net loss for the fourth quarter of 2012 was
$1,587 compared to a loss of
$1,543 in the third quarter of 2012
and a net loss of $810 in the fourth
quarter of 2011.
Results of Operations for the year ended
December 31, 2012
For the year ended December 31, 2012 the Company reported revenues
of $36,426 (December 31, 2011 - $18,177, a twofold increase year over year.
The increases in revenue compared with results for the same period
of 2011 are due primarily to a larger portfolio of centres and
organic growth therein.
Centre margin as a percentage of revenue was 28%
for the year ended December 31, 2012
compared to 32% for the year ended December
31, 2011. This decrease in centre margin as a
percentage of revenue is primarily attributable to centres acquired
or opened during the year with low initial occupancy levels and
relatively higher labour costs.
General and administrative expenses for the year
ended December 31, 2012 were
$5,805 (December 31, 2011 - $4,551). The increase of $1,254 in general and administrative expenses was
due in large part to $725 of
non-recurring costs incurred to: review, select and implement new
operational and financial information systems to support the
Company in its growth objectives, $197; higher legal fees to cover the initial
Annual Information Form regulatory filing and the deferred share
unit plan, $84; legal and tax
advisory costs to pursue a series of subsidiary amalgamations,
$94; recruiting and relocation costs
of $125; severance, $212 and other of $13.
Acquisition and development costs incurred
during the year ended December 31,
2012 were $2,243 (December 31, 2011 - $1,330). Increased costs for the year include
severance and employment termination and recruiting costs of
$919, as well as certain costs
related to the opening of two new development centres and two
redevelopment centres in the year. The increase also includes
certain costs associated with future potential acquisitions and
developments.
Terminated projects expense was $540 in 2012 compared to nil in 2011. Terminated
project expense includes costs incurred to pursue the development
of two greenfield sites which were initiated by the Company's
prior senior management team and for which the Company has
chosen to not proceed. Matters related to restrictions on future
subdivision of a land parcel, among other things, and the size and
nature of a proposed child care centre on the perimeter of an
Alberta Census Metropolitan Area
gave rise to the decision to terminate these projects.
Net loss for the 2012 fiscal year widened to
$4.5 million ($0.037 per share) from $2.6 million in 2012 ($0.024 per share) due to a series of items:
- Expense items totalling $4.8
million:
-
- Non recurring project termination costs of $540;
- Increased borrowing costs of $457;
- Depreciation increase of $1.1
million;
- Acquisition and development costs (expensed as incurred vs.
capitalized) increase of $913
including non-recurring amounts of $919 related to restructuring the internal
group;
- Higher general and administrative expense of $1.3 million due largely to one-time investments
in ERP systems, precedent securities filings (AIF and Deferred
Share Unit Plan), amalgamations, recruiting and severances of
$725; and
- Other net expense items, $445.
- Partially offset by:
-
- $2.9 million higher income from
centre operations.
Adjusted EBITDA of $1,805; an increase of $1,626 from 2011.
FFO was $864
compared with negative $146 in the
prior year; reflecting early stage financial performance from
spaces added in 2012 through acquisition and development and funded
primarily through interest bearing indebtedness.
AFFO of $1,213
compared with $118 in the prior
year.
Basic and diluted net loss per share for the
year ended December 31, 2012 was
$(0.037) (December 31, 2011 - $(0.024).
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Adjusted EBITDA |
2012 |
2011 |
2010 |
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Centre margin for the period |
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$ |
10,023 |
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$ |
5,727 |
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$ |
1,894 |
General and administrative expense |
(5,805) |
(4,551) |
(2,867) |
Taxes, other than income taxes |
(164) |
(91) |
- |
Operating lease expense |
(2,249) |
(906) |
(297) |
Adjusted EBITDA |
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$ |
1,805 |
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$ |
179 |
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$ |
(1,270) |
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FFO and AFFO |
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Net loss for the period |
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$ |
(4,462) |
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$ |
(2,557) |
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$ |
(3,348) |
Depreciation and certain other non-cash items |
2,543 |
1,081 |
306 |
Acquisition and development costs |
2,243 |
1,330 |
790 |
Terminated project expense |
540 |
- |
- |
FFO |
|
$ |
864 |
|
$ |
(146) |
|
$ |
(2,252) |
Stock based compensation |
777 |
434 |
940 |
Qualifying transaction amounts expensed |
- |
- |
324 |
Accrued 2010 public company costs prior to
Qualifying Transaction |
- |
- |
240 |
Maintenance capital expenditure |
(428) |
(170) |
- |
AFFO |
|
$ |
1,213 |
|
$ |
118 |
|
$ |
(748) |
Adjusted EBITDA in 2012 was $1,805 compared to $179 in 2011. Adjusted EBITDA improved by
$1,626 due largely to centres
representing 1,737 spaces acquired in 2011 on line for a full year
compared to a partial year in 2011. Additionally, 2012
includes incremental Adjusted EBITDA from the 1,352 spaces of
capacity associated with acquired and developed/redeveloped centres
in the current year, partially offset by capacity reductions of 69
spaces in order to align supply with demand in certain
locations.
AFFO for the year ended December 31, 2012 was $1,213 compared to $118 in the prior year. AFFO increased by
$1,095 on a year over year basis due
to the increased capacity from acquisitions and the opening of
development and redevelopment centres, partially offset by higher
financing charges and maintenance capital also.
AFFO per share for the year ended December 31, 2012 was $0.010 compared to $0.001 for prior year.
FFO for the year ended December 31, 2012 was $864 compared to $(146) for prior year, the trends for which were
substantially the same as AFFO.
FFO per share for the year ended December 31, 2012 was $0.007 compared to $(0.001) for the prior year.
Outlook
As the Company looks forward to its third
anniversary in May 2013, the success
of the business model has been validated as evidenced by
trends:
- Stabilized centres improved their occupancy level from 86.8% to
90.1%, contributing to a revenue increase of 9.2%; and
- New centre developments representing $17
million of investment brought 709 spaces to market with
occupancy rates at opening dates of 47% increasing to 85% as at the
present date.
The substantial $1.6
million non-recurring costs incurred made by the Company
during the year in ERP systems, corporate legal structure,
precedent securities filings, recruiting and reorganization of the
internal acquisition group are anticipated to decline during
2013. As a result of these investments, the Company will be
in a better position to achieve reductions in overhead costs and
more efficient and effective cost management at our centres.
We will also have the tools necessary to identify opportunities to
leverage spending for increased enrolment and better utilization of
our facilities.
In July, 2012 the board of directors of the
Company engaged the services of a new Chief Executive Officer with
a view to guiding the Company through its next phases of
evolution. Ms. Mary Ann Curran
brings deep and varied experience together with a skill set that
lends itself to product management delivered in multi-location
operating environments, demographic-based analysis of site
selection and centre location, quality of service offerings and the
creation of a brand that stands for the Edleun commitment to raise
the bar on child care quality in Canada and deliver rewarding value to its
stakeholders who include families, shareholders and employees.
At 50 child care centres, of which 46 were
purchased and four developed, the Company believes it has reached a
milestone. The critical mass is now in place to leverage the
very best curriculum, complementary programming, nutritional
counselling, technology and training methodologies. These,
together with our passionate, skillful staff, excellent facilities
and state of the art equipment, underpin our brand and promise of
excellence with respect to child care and development.
The basic premise of the Edleun value
proposition and business model remains unchanged. There are
many underserved markets in Canada
that offer the opportunity to provide quality child care
services. We continue to be excited about the potential for
growth and believe there is an under-supply of high quality child
care spaces. However, we also believe there is less to
acquire and a greater opportunity for development, so there is a
shift in emphasis to these two pillars of our external growth
strategy - build-outs, co-locations and greenfield developments -
while continuing to pursue select acquisitions. The
acquisition pipeline of six months ago has been re-addressed and
all suitable opportunities are being acted upon or have been
dismissed. We are now rebuilding the pipeline and negotiating
new deals.
In closing, we are excited for what is in store
for 2013. Our financial position is strong, evidenced by the
Company's lender having increased its credit facility by
$2 million and amended covenants in a
manner favourable to the Company. More importantly, our
parent feedback and increasing enrolments provide validation that
we are satisfying the families we serve. On that basis we
anticipate our current model, enhanced by the initiatives
discussed, will deliver attractive returns to our employees,
customers and investors in 2013.
Non IFRS Performance Measures
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 those properties owned
by the Company.
The Company uses "stabilized centre results" to
measure the performance. Acquired centres in Alberta are deemed to be stabilized 12 months
following their acquisition. Acquired centres in Ontario and British
Columbia and new development centres in all provinces are
deemed to be stabilized after 24 months.
Adjusted EBITDA is calculated by deducting from
centre margin general and administrative expenses, operating lease
expense and taxes other than income taxes. FFO is calculated by
adjusting the net loss to add back acquisition costs expensed as
incurred, depreciation and certain other non-cash items.
The Company's business, which is oriented toward
the acquisition and development of child care centres and includes
the ownership of a significant portfolio of real estate, reports
net income that includes deduction for 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 financial metrics to measure and compare operating
performance. 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.
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
Thursday, April 4, 2013 at
10:00 am ET (8:00 am MT), to discuss the results of the fourth
quarter of fiscal 2012. 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 Thursday,
April 11, 2013, at midnight. To access the archived
conference call, dial (416) 849-0833 or 1-855-859-2056 and enter
the reservation number 29689319 followed by the number sign.
A live audio webcast of the conference call will be
available at:
http://www.newswire.ca/en/webcast/detail/1136253/1239689. 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
(TSX-V: EDU), 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 of 51
operating centres in its portfolio representing approximately 4,990
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.
|
|
|
|
|
|
|
|
|
Edleun Group, Inc. |
Consolidated Statements of Financial
Position |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN $000's) |
|
|
|
December
31,
2012 |
|
|
|
December
31,
2011 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
|
|
Property and equipment |
|
|
$ |
46,205 |
|
|
$ |
33,434 |
|
Goodwill |
|
|
|
27,802 |
|
|
|
22,940 |
|
Definite life intangible
assets |
|
|
|
382 |
|
|
|
340 |
|
|
|
|
74,389 |
|
|
|
56,714 |
Current assets |
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
5,800 |
|
|
|
1,911 |
|
Accounts receivable |
|
|
|
1,663 |
|
|
|
1,589 |
|
Prepaid and other expenses |
|
|
|
1,864 |
|
|
|
3,606 |
|
Short term investments |
|
|
|
259 |
|
|
|
39 |
|
|
|
|
9,586 |
|
|
|
7,145 |
|
|
|
|
|
|
|
|
|
Total
Assets |
|
|
$ |
83,975 |
|
|
$ |
63,859 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
|
Long term debt and financing
leases |
|
|
$ |
11,828 |
|
|
$ |
2,151 |
|
Deferred tax liability |
|
|
|
- |
|
|
|
42 |
|
Convertible debentures - liability
component |
|
|
|
4,353 |
|
|
|
- |
|
|
|
|
16,181 |
|
|
|
2,193 |
Current
liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
|
|
3,925 |
|
|
|
2,877 |
|
Deferred revenue |
|
|
|
867 |
|
|
|
399 |
|
Current portion of debt and
financing leases |
|
|
|
5,488 |
|
|
|
109 |
|
|
|
|
10,280 |
|
|
|
3,385 |
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
|
|
26,461 |
|
|
|
5,578 |
|
|
|
|
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
66,030 |
|
|
|
62,931 |
|
Convertible debentures - equity
component |
|
|
|
342 |
|
|
|
- |
|
Equity settled share based
compensation |
|
|
|
1,584 |
|
|
|
1,330 |
|
Accumulated deficit |
|
|
|
(10,442) |
|
|
|
(5,980) |
Total Shareholders'
Equity |
|
|
|
57,514 |
|
|
|
58,281 |
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity |
|
|
$ |
83,975 |
|
|
$ |
63,859 |
|
|
|
|
|
|
|
|
|
Edleun Group, Inc. |
Consolidated Statements of Operations and
Comprehensive Loss |
Years ended December 31, 2012 and 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN $000's) |
|
|
|
2012 |
|
|
|
2011 |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
$ |
35,365 |
|
|
$ |
17,561 |
Government grants |
|
|
|
1,061 |
|
|
|
616 |
Total revenue |
|
|
|
36,426 |
|
|
|
18,177 |
|
|
|
|
|
|
|
|
|
Centre expenses |
|
|
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
|
|
19,172 |
|
|
|
9,107 |
|
Other operating expenses |
|
|
|
7,231 |
|
|
|
3,343 |
Centre margin |
|
|
|
10,023 |
|
|
|
5,727 |
|
|
|
|
|
|
|
|
|
Operating leases |
|
|
|
2,249 |
|
|
|
906 |
Finance |
|
|
|
614 |
|
|
|
157 |
General and administrative |
|
|
|
5,805 |
|
|
|
4,551 |
Taxes, other than income taxes |
|
|
|
163 |
|
|
|
91 |
Acquisition and development costs |
|
|
|
2,243 |
|
|
|
1,330 |
Terminated projects and other |
|
|
|
540 |
|
|
|
- |
Stock-based compensation |
|
|
|
777 |
|
|
|
434 |
Depreciation and amortization |
|
|
|
2,134 |
|
|
|
1,058 |
|
|
|
|
14,525 |
|
|
|
8,527 |
|
|
|
|
|
|
|
|
|
Loss before other income |
|
|
|
(4,502) |
|
|
|
(2,800) |
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
70 |
|
|
|
251 |
Loss before income
taxes
|
|
|
|
(4,432)
|
|
|
|
(2,549)
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
30 |
|
|
|
8 |
Net Loss and Total Comprehensive
Loss |
|
|
$ |
(4,462) |
|
|
|
$
(2,557) |
|
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
$ |
(0.037) |
|
|
$ |
(0.024) |
Weighted average
number of common shares |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
120,317,053 |
|
|
|
107,797,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edleun Group,
Inc. |
Consolidated
Statements of Changes in Shareholders' Equity |
Years ended
December 31, 2012 and 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN $000's) |
|
Share Capital |
|
Convertible
Debentures -
Equity
Component |
|
Equity Settled
Share Based
Compensation |
|
Accumulated
Deficit |
|
Shareholders'
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January
1, 2011 |
|
$ |
38,463 |
|
$ |
- |
|
$ |
1,089 |
|
$ |
(3,423) |
|
$ |
36,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share issuance |
|
|
25,003 |
|
|
- |
|
|
- |
|
|
- |
|
|
25,003 |
Share issuance
costs |
|
|
(1,494) |
|
|
- |
|
|
- |
|
|
- |
|
|
(1,494) |
Stock-based
compensation |
|
|
- |
|
|
- |
|
|
434 |
|
|
- |
|
|
434 |
Warrants
exercised |
|
|
232 |
|
|
- |
|
|
(36) |
|
|
- |
|
|
196 |
Stock options
exercised |
|
|
727 |
|
|
- |
|
|
(157) |
|
|
- |
|
|
570 |
Net loss and
comprehensive loss |
|
|
- |
|
|
- |
|
|
- |
|
|
(2,557) |
|
|
(2,557) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011 |
|
$ |
62,931 |
|
$ |
- |
|
$ |
1,330 |
|
$ |
(5,980) |
|
$ |
58,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January
1, 2012 |
|
$ |
62,931 |
|
$ |
- |
|
$ |
1,330 |
|
$ |
(5,980) |
|
$ |
58,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
17 |
|
|
- |
|
|
760 |
|
|
- |
|
|
777 |
Warrants
exercised |
|
|
2,662 |
|
|
- |
|
|
(412) |
|
|
- |
|
|
2,250 |
Options exercised |
|
|
420 |
|
|
- |
|
|
(94) |
|
|
- |
|
|
326 |
Issue of convertible
debentures |
|
|
- |
|
|
342 |
|
|
- |
|
|
- |
|
|
342 |
Net loss and
comprehensive loss |
|
|
- |
|
|
- |
|
|
- |
|
|
(4,462) |
|
|
(4,462) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012 |
|
$ |
66,030 |
|
$ |
342 |
|
$ |
1,584 |
|
$ |
(10,442) |
|
$ |
57,514 |
|
|
|
|
|
|
|
|
|
Edleun Group, Inc. |
Consolidated Statements of Cash Flow |
Years ended December 31, 2012 and 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN $000's) |
|
|
|
2012 |
|
|
|
2011 |
|
|
|
|
|
|
|
|
|
Cash provided by (used
in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities: |
|
|
|
|
|
|
|
|
Net loss |
|
|
$ |
(4,462) |
|
|
$ |
(2,557) |
Items not affecting
cash: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
2,218 |
|
|
|
1,058 |
|
Finance costs |
|
|
|
614 |
|
|
|
157 |
|
Stock-based compensation |
|
|
|
777 |
|
|
|
434 |
|
Income tax expense |
|
|
|
30 |
|
|
|
8 |
Change in non-cash
working capital |
|
|
|
2,020 |
|
|
|
(1,524) |
Cash generated from
operations |
|
|
|
1,197 |
|
|
|
(2,424) |
|
|
|
|
|
|
|
|
|
Finance costs
paid |
|
|
|
(502) |
|
|
|
(98) |
Net cash generated by
operating activities |
|
|
|
695 |
|
|
|
(2,522) |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
(4,598) |
|
|
|
(20,812) |
Property and
equipment |
|
|
|
(13,287) |
|
|
|
(10,116) |
Restricted cash |
|
|
|
(220) |
|
|
|
165 |
|
|
|
|
(18,105) |
|
|
|
(30,763) |
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
|
Proceeds of share
issue |
|
|
|
- |
|
|
|
25,003 |
Share issuance
costs |
|
|
|
- |
|
|
|
(1,494) |
Exercise of
warrants |
|
|
|
2,250 |
|
|
|
196 |
Exercise of
options |
|
|
|
326 |
|
|
|
569 |
Loan proceeds |
|
|
|
14,549 |
|
|
|
2,500 |
Financing costs |
|
|
|
- |
|
|
|
(240) |
Loan repayments |
|
|
|
(285) |
|
|
|
- |
Proceeds of
convertible debentures issue |
|
|
|
5,000 |
|
|
|
- |
Convertible debenture
issuance costs |
|
|
|
(388) |
|
|
|
- |
Finance lease
repayments |
|
|
|
(153) |
|
|
|
- |
|
|
|
|
21,299 |
|
|
|
26,534 |
|
|
|
|
|
|
|
|
|
Change in
Cash |
|
|
|
3,889 |
|
|
|
(6,751) |
Cash at beginning of
year |
|
|
|
1,911 |
|
|
|
8,662 |
Cash at end of
year |
|
|
$ |
5,800 |
|
|
$ |
1,911 |
SOURCE Edleun Group, Inc.