BrightPath records highest ever revenue and centre margin in fiscal year 2015 and significant success in new centre openings

TORONTO, March 30, 2016 /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, with 5,790 spaces of licensed capacity within 54 centres located in Alberta, British Columbia and Ontario, announced today its operational and financial results for the three and twelve month periods ended December 31, 2015.  

Portfolio performance highlights for the year ended December 31, 2015 are as follows (all comparisons are against the prior year period):

  • Revenue increased 6.6% to $54.2 million, with higher revenue reported across all provincial markets;
  • Centre margin rose to 27.4% of revenue compared to 27.2%, with all provincial markets achieving higher centre margin;
  • Adjusted EBITDA of $5.8 million compared to $6.0 million;
  • Funds from Operations ("FFO") of $4.6 million ($0.038 per share) compared to $4.7 million ($0.039 per share);
  • Adjusted Funds from Operations ("AFFO") of $4.3 million ($0.036 per share) compared to $4.3 million ($0.036 per share);
  • Net profit of $1.2 million compared to a net loss of $1.6 million;
  • Average occupancy of Stabilized centres of 82.3% compared to 83.8%;
  • Notwithstanding the recent economic challenges in the Alberta market, the Company:
    • Delivered year over year increases in revenue and centre margin in all provincial markets; and
    • Achieved high initial enrollment levels in new centre openings from its growth pipeline, significantly exceeding both its pro forma budgets and industry metrics; and
  • Available capital of $23.6 million at year end to fund the Company's pipeline of growth initiatives, including both the announced additional 814 licensed spaces that represent a 14% increase in the Company's current portfolio of 5,790 spaces, as well as other growth initiatives not yet announced.

 Highlights for the three months ended December 31, 2015 include:

  • Revenue increased 6.9% to $13.8 million, with higher revenue achieved in all provincial markets;
  • Centre margin declined modestly to $3.6 million from $3.7 million, with a decline in Alberta offsetting higher centre margin reported in Ontario and British Columbia;
  • Adjusted EBITDA of $1.3 million, a decrease of $0.6 million;
  • FFO of $0.9 million ($0.007 per share) compared to $1.6 million ($0.013 per share);
  • AFFO of $0.9 million ($0.007 per share) compared to $1.4 million ($0.012 per share);
  • Net loss of $0.6 million compared to a net loss of $0.1 million; and
  • Average occupancy of Stabilized centres of 80.3% compared to 84.2%, largely reflecting weakness in Alberta.

Significant events for the year ended December 31, 2015 include:

  • Construction of the Company's first new development in Edmonton began in May 2015. The West Henday centre, comprising 247 licensed spaces in a 20,000 square foot facility developed by BrightPath, will open in April 2016;
  • In November 2015, following on the enrollment success and market demand for the Creekside centre, the Company announced plans to open a new centre nearby in Riocan REIT's Sage Hill Crossing. When completed in early 2017, the Sage Hill centre will offer approximately 130 licensed spaces in 10,000 square feet of leasehold premises;
  • The Company announced plans to develop a new centre in an underserved market in southwest Calgary. The Richmond Early Learning and Child Care Centre will create 247 licensed spaces in a 20,000 square foot facility on a one-acre land parcel within First Capital Realty Inc.'s ("First Capital") London Place West shopping centre. Construction of the facility is expected to begin in the second quarter of 2016;
  • In November 2015, the Creekside centre in the Symons Valley area of northwest Calgary was opened, comprising 247 licensed spaces in a 20,000 square foot facility developed by BrightPath;
  • In September 2015, a new centre located west of Calgary in Cochrane was opened, creating 120 licensed spaces in leased premises;
  • The expansion of the Company's Airdrie centre, located in a suburban community north of the city of Calgary, was opened in July 2015, increasing its licensed capacity from 57 licensed spaces to 117. Based on its success, a further expansion to 147 licensed spaces to satisfy a wait list is underway;
  • In August 2015, BrightPath completed the sale and leaseback of the real estate underlying its McKenzie Towne location in southeast Calgary with an affiliate of First Capital for gross proceeds of $7.5 million. This transaction generated $3.2 million of cash after repayment of indebtedness and fees and $4.0 million of additional bank financing capacity to provide a total of $7.2 million of incremental growth capital to augment funding for the Company's growth pipeline and share repurchase program; and
  • Under the Company's normal course issuer bid, during the three and twelve months ended December 31, 2015, the Company purchased 364,500 and 916,200 shares, respectively, for cancellation, of which 798,700 had been cancelled at December 31, 2015. Cumulatively to date, the Company has purchased for cancellation 1,701,200 shares under its NCIB program at an average price of $0.33 per share.

"We are pleased with the Company's financial results, improving operations in British Columbia and Ontario, the resiliency of operations in Alberta in light of challenging economic conditions and successful openings of new centres in Alberta during 2015," noted Mary Ann Curran, Chief Executive Officer of the Company. "Delivering the highest product and service offering, we are the early childhood education and care provider of choice, resulting in enrollment levels above industry standards. The Company is also managing costs and successfully expanding BrightPath's capacity through new locations with demonstrated high demand. We remain focused on realizing the benefits from these same priorities and further enhancing shareholder value in 2016."

Financial Review

($000's except where otherwise noted and per share amounts)










Year ended December 31,






2015

2014

2013

Centres at end of year (#)






54

52

51

Licensed spaces at end of year (#)






5,790

5,372

5,137

Average occupancy (%)






80.6

83.1

84.2

Ending occupancy (%)






77.7

82.0

84.1

Revenue ($)






54,170

50,808

46,818

Centre margin ($)






14,819

13,819

12,176

Adjusted EBITDA ($)






5,821

5,954

3,048

FFO ($)






4,560

4,693

1,895

FFO per share ($)






0.038

0.039

0.016

AFFO ($)






4,336

4,334

1,986

AFFO per share ($)






0.036

0.036

0.016

Net profit (loss) ($)






1,224

(1,568)

(3,469)

Net profit (loss) per share ($)






0.010

(0.013)

(0.028)

Total assets ($)






85,071

82,877

83,298

Total long-term financial liabilities ($)






19,001

24,162

22,467

 











Q4 2015

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Revenue

$

13,796

$

12,815

$

13,912

$

13,647

$

12,911

$

12,013

$

13,181

$

12,703

Centre margin


3,629


3,265


3,976


3,949


3,741


2,782


3,670


3,626

Centre margin %


26.3


25.5


28.6


28.9


29.0


23.2


27.8


28.5

Adjusted EBITDA


1,306


915


1,781


1,819


1,889


801


1,704


1,560

FFO


877


696


1,436


1,551


1,609


469


1,365


1,250

AFFO


851


596


1,373


1,516


1,448


246


1,311


1,329

Net profit (loss)


(560)


1,344


144


296


(85)


(963)


133


(653)

Per share amounts:


















FFO


0.007


0.006


0.012


0.013


0.013


0.004


0.011


0.010


AFFO


0.007


0.005


0.011


0.012


0.012


0.002


0.011


0.011


Net profit (loss)


(0.005)


0.011


0.001


0.002


(0.001)


(0.008)


0.001


(0.005)

For the year ended December 31, 2015, the Company reported revenue of $54,170 (December 31, 2014 - $50,808) and centre margin of $14,819 (December 31, 2014 - $13,819). The 6.6% increase in revenue year over year included the positive impact of successful openings of new centres in Surrey, British Columbia, Cochrane and Calgary, Alberta, the expansion of the Company's centre in Airdrie, Alberta and a 3.3% increase in Stabilized centre revenue. The positive effect of fee increases in Stabilized centres was partially offset by a decline in average occupancy from 83.8% to 82.3% primarily due to a decline in enrollments in Alberta. Notwithstanding the change in average occupancy, centre margin as a percentage of revenue increased to 27.4% compared to 27.2% in 2014, with the increase mainly attributable to fee increases and a sharp focus on managing operating cost increases through improved procurement processes.

For the three months ended December 31, 2015, revenue was $13,796 (December 31, 2014 - $12,911), an increase of 6.9%, and centre margin was $3,629 (December 31, 2014 - $3,741), a decrease of 3.0%. The reasons for the increase in revenue are substantially the same as those discussed above for the fiscal year. Centre margin year over year was relatively consistent and as a percentage of revenue decreased to 26.3% compared to 29.0% a year earlier. Centre margin erosion was caused by limited labour savings on enrollment losses as centres maintained staff ratios, as well as the impact of new centre openings, which tend to operate less efficiently during enrollment ramp up.

Adjusted EBITDA for the year ended December 31, 2015 was $5,821 compared to $5,954 in the same period in 2014. As noted, fee increases and efficiencies in operating costs, resulting in an increase in centre margin year over year, were offset by higher general and administrative and operating lease expenses. General and administrative expense increased $363 mainly due to non-recurring expense savings in the latter part of 2014 and higher information technology costs and professional fees incurred in 2015. The 24.5% increase in operating lease expense was primarily due to the impact of the McKenzie Towne centre sale and leaseback, the openings of the Surrey, Cochrane and Creekside centres and the Airdrie centre expansion.

Adjusted EBITDA for the fourth quarter of 2015 was $1,306 compared to $1,889 in the fourth quarter of 2014. Adjusted EBITDA decreased $583 primarily due to lower centre margin of $112, with the balance mainly from the effect of incremental lease expense incurred from the McKenzie Towne centre sale and leaseback and prior year non-recurring general and administrative expense savings.

In August 2015, the Company completed a transaction for the sale and leaseback of its McKenzie Towne centre location in Calgary, Alberta for gross proceeds of $7,500. Net cash proceeds from the transaction after repayment of indebtedness and transaction fees were $3,211. In addition, $4,004 of bank financing capacity was created. In total, this transaction generated approximately $7.2 million of incremental capital to augment the Company's available capital for funding its growth pipeline and other initiatives to create shareholder value. The transaction, effected at a capitalization rate of 6.76%, serves to validate and underscore not only the inherent strength of BrightPath's operating and financial covenant as a tenant, but also the value of its real estate portfolio.   

Net profit for the year ended December 31, 2015 was $1,224 compared to a net loss of $1,568 for the year ended December 31, 2014. Included in the 2015 results was a $1,791 gain on the sale and leaseback of the McKenzie Towne centre. In 2014, the loss included a loss on the disposition of development land of $302 and non-recurring restructuring costs of $968. Net loss for the fourth quarter of 2015 was $560 compared to a net loss of $85 in the fourth quarter of 2014.  Basic net profit (loss) per share for the three and twelve months ended December 31, 2015 was $(0.005) and $0.010 (December 31, 2014 - $(0.001) and $(0.013)), respectively.  

For the year ended December 31, 2015, Alberta Stabilized centre occupancies averaged 87.1% compared to 89.7% in 2014. Stabilized centre occupancy during the fourth quarter of 2015 was 84.7% compared to 90.6% a year earlier. While the Company experienced enrollment losses primarily during the fourth quarter of 2015 as a result of the economic downturn, enrollment levels have shown signs of stabilizing during the first quarter of 2016.

Attesting to both the need for space in certain areas of Alberta and the acceptance by consumers of the superior product offered by the Company in its new state-of-the-art centres is the fact that BrightPath's newest development in the Symons Valley area of Calgary, which opened in November 2015, has achieved 97% enrollment for its full day care, with enrollment of before and after school care spaces gaining momentum. The Company's next new centre in Edmonton, scheduled to open in April 2016, has achieved 69% pre-enrollment for full day care spaces released to the market with before and after school care spaces building more slowly as expected in advance of the September school year. These new developments, along with the successful openings of the Cochrane centre and Airdrie centre expansion, have delivered high enrollment levels that have significantly exceeded both the Company's pro forma time frame and industry metrics which typically anticipate a 24-month period for ramp up of enrollment and centre stabilization. These high enrollment levels also underscore the Company's long term strategy of taking advantage of significant shortages of quality child care spaces in select Canadian markets, and, despite the recent economic challenges in Alberta, delivery of these state-of-the-art centres offering a superior product continues to be very well received.

In Ontario, the Company has focused on rebuilding occupancy, reconfiguring space and pursuing opportunities to add capacity in line with the new patterns of demand for early childhood development and care. As a result of the adoption of full day kindergarten, the turnover of children in centres is higher resulting in more time required to ramp up enrollment when the new school year begins. For the year ended December 31, 2015, Ontario portfolio occupancies averaged 71.6% compared to 72.2% in 2014. Occupancy declined slightly to 69.0% in the fourth quarter of 2015 from 70.4% in the fourth quarter in the prior year. At present, the enrollment level in Ontario centres is 79% compared to 75% a year ago, reflecting improved market conditions. 

Occupancy in Stabilized centres in British Columbia increased to 81.9% for the year ended December 31, 2015 from 80.5% in 2014. For the fourth quarter of 2015, Stabilized centre occupancy increased to 82.5% from 82.2% in the fourth quarter of 2014. Occupancy at the Surrey facility, opened in September 2014, has steadily improved ahead of expectations and industry metrics and is currently in excess of 80% of licensed capacity.

Adjusted EBITDA, AFFO and FFO











Q4 2015

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Centre margin for the period


3,629


3,265


3,976


3,949


3,741


2,782


3,670


3,626

General and administrative expense


(1,129)


(1,271)


(1,258)


(1,192)


(903)


(1,138)


(1,170)


(1,276)

Taxes, other than income taxes


(41)


(40)


(44)


(43)


(52)


(44)


(43)


(43)

Operating lease expense


(1,153)


(1,039)


(893)


(895)


(897)


(799)


(753)


(747)

Adjusted EBITDA

$

1,306

$

915

$

1,781

$

1,819

$

1,889

$

801

$

1,704

$

1,560



















Q4 2015

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Net profit (loss) for the period


(560)


1,344


144


296


(85)


(963)


133


(653)

Depreciation and certain other non-cash items


969


815


948


941


924


799


802


853

Acquisition  and development costs


468


328


344


314


736


365


232


280

Restructuring costs


-


-


-


-


-


-


198


770

Loss on disposition of development land


-


-


-


-


34


268


-


-

Gain on sale and leaseback


-


(1,791)


-


-


-


-


-


-

FFO

$

877

$

696

$

1,436

$

1,551

$

1,609

$

469

$

1,365

$

1,250

Stock based compensation


272


63


153


78


107


108


93


103

Maintenance capital expenditure


(298)


(163)


(216)


(113)


(268)


(331)


(147)


(24)

AFFO

$

851

$

596

$

1,373

$

1,516

$

1,448

$

246

$

1,311

$

1,329

FFO for the year ended December 31, 2015 was $4,560 compared to $4,693 for the year ended December 31, 2014, reflecting the factors affecting Adjusted EBITDA. FFO per share for the year ended December 31, 2015 was $0.038 compared to $0.039 for the same period in 2014. FFO for the fourth quarter of 2015 was $877 compared to $1,609 in the fourth quarter of 2014. FFO per share for the fourth quarter of 2015 was $0.007 compared to $0.013 for the same period in 2014. 

AFFO for the year ended December 31, 2015 of $4,336 ($0.036 per share) was consistent with AFFO of $4,334 ($0.036 per share) for the year ended December 31, 2014. AFFO for the fourth quarter of 2015 was $851 compared to $1,448 a year earlier. AFFO per share for the fourth quarter of 2015 was $0.007 compared to $0.012 for the fourth quarter of 2014.

Centre Portfolio Overview

The Company's centre locations, number of licensed spaces and average occupancies are provided in the table that follows. Centres typically experience lower levels of attendance June through August due to seasonal factors. As well, new centres typically exhibit lower occupancy levels during ramp up of enrollments, thereby adversely impacting total portfolio occupancies prior to achieving stabilization.  













Three months
ended
December 31,
2015


Three months
ended
December 31,
2014


Year
ended
December 31,
2015


Year
ended
December 31,
2014

Stabilized Centres


















Alberta









Ending Centres #


30


30


30


30

Ending Spaces #


3,238


3,178


3,238


3,178

Avg. Occupancy %


84.7


90.6


87.1


89.7










British Columbia









Ending Centres #


7


7


7


7

Ending Spaces #


577


581


577


581

Avg. Occupancy %


82.5


82.2


81.9


80.5










Ontario 









Ending Centres #


14


14


14


14

Ending Spaces #


1,402


1,407


1,402


1,407

Avg. Occupancy %


69.0


70.4


71.6


72.2










Total Stabilized Centres









Ending Centres #


51


51


51


51

Ending Spaces #


5,217


5,166


5,217


5,166

Avg. Occupancy %


80.3


84.2


82.3


83.8

Non-stabilized Centres


















Alberta









Ending Centres #


2


-


2


-

Ending Spaces #


367


-


367


-

Avg. Occupancy %


49.5


-


46.7


-










British Columbia









Ending Centres #


1


1


1


1

Ending Spaces #


206


206


206


206

Avg. Occupancy %


66.9


31.3


50.6


29.1










Ontario 









Ending Centres #


-


-


-


-

Ending Spaces #


-


-


-


-

Avg. Occupancy %


-


-


-


-










Total Non-stabilized Centres









Ending Centres #


3


1


3


1

Ending Spaces #


573


206


573


206

Avg. Occupancy %


56.8


31.3


49.5


29.1

Total Portfolio (All Centres)


















Ending Centres #


54


52


54


52

Ending Spaces #


5,790


5,372


5,790


5,372

Avg. Occupancy %


78.2


82.1


80.6


83.1

Deferred Share Units ("DSUs")

For the three months ended December 31, 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 194,334 DSUs. The DSUs were issued on January 18, 2016.

Outlook

For the year ended December 31, 2015, despite challenges in the Alberta market, the Company increased revenue and centre margin on a year over year basis by 6.6% and 7.2%, respectively, and reported net profit of $1,224.

The Company remains focused on generating substantially higher Adjusted EBITDA and enhancing shareholder value through:

  • continuous product advancement enabling optimized pricing and occupancy levels;
  • disciplined management of enrollment and mix;
  • continuously improving management of all costs – labour, other operating and general and administrative;
  • realizing cash flow from development initiatives announced in 2014 and earlier in 2015, as well as those in the pipeline but not yet announced; and
  • other measures to enhance shareholder value, including monetization of select assets and the NCIB program.

In Alberta, while the Company experienced enrollment losses primarily during the fourth quarter of 2015 as a result of the economic downturn, enrollment levels have shown signs of stabilizing during the first quarter of 2016. Confirming the need for space in certain areas of Alberta and the acceptance by consumers of the superior product offered by the Company are the successful openings of the Creekside and Cochrane centres and Airdrie centre expansion, as well as the achievement of high pre-enrollment at the Company's next new centre in Edmonton to be opened in April 2016.     

In British Columbia, the Company continues to focus on building enrollments, managing labour and operating costs and looking for opportunities to grow and develop larger facilities offering an appropriate scale of operations in the suburban markets surrounding Vancouver.

In Ontario, the multi-year planned roll out of FDK was completed in 2014. The supply of licensed spaces in Ontario continues to adjust to the new patterns of demand for early childhood development and care. The Company continues to concentrate on becoming Ontario parents' provider of choice through effectively marketing BrightPath's brand and product and pursuing opportunities to add capacity and grow BrightPath's base of centres.

As noted on earlier occasions, BrightPath's management and board of directors believe that the current price of the Company's common shares on the TSX Venture exchange does not appropriately or adequately reflect the Company's current value, operational performance, financial results and strategic achievements, or its near and longer term growth prospects. We have previously outlined the disconnect between the price of the Company's 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 were pleased to validate the financial opportunity underpinning this disconnect with the sale of real estate underlying the Company's McKenzie Towne centre during the third quarter of 2015. This transaction created the availability of an additional $7.2 million of capital to augment the funding already available for the Company's pipeline of growth initiatives and the purchase of the Company's common shares. The Company continues to initiate and explore other opportunities to surface value for its shareholders.

The Company believes that the undervaluation of its share price is not only significant based on its current operations and real estate holdings, but is also further highlighted by the future growth of approximately 814 licensed spaces which have been announced. The pro forma 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. Furthermore, those centres can be operated without any significant increase in general and administration overhead expense.

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 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, March 31, 2016 at 10:00 am EST. The call details are as follows:

To access the conference call by telephone, dial (647) 427-7450 or (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=1162575&s=1&k=90F1134349F91AC1FCBD157E278CD241

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, April 14, 2016 at midnight. To access the archived conference call, dial (416) 849-0833 or (855) 859-2056 and enter the reservation number 78818487 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 54 locations in major markets across the country. Meeting the highest standards in curriculum, nutrition, technology and recreational programming, 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
























(CDN $000's)




December 31,

2015



December 31,

2014

Assets
















Non-current assets









Property and equipment



$

49,779


$

45,811


Goodwill and definite life intangible assets




30,042



30,074





79,821



75,885

Current assets









Cash




1,537



3,455


Accounts receivable




1,958



1,983


Prepaid expenses and deposits




1,716



1,515


Short term investments




39



39





5,250



6,992









Total Assets



$

85,071


$

82,877









Liabilities
















Non-current liabilities









Provision for restructuring costs



$

-


$

45


Long term debt and financing leases




14,697



19,762


Convertible debentures – liability component




4,304



4,355





19,001



24,162

Current liabilities









Accounts payable and accrued liabilities




5,198



2,924


Current portion of provision for restructuring costs




45



290


Deferred revenue




955



878


Current portion of debt and financing leases




5,184



1,418





11,382



5,510









Total Liabilities




30,383



29,672









Shareholders' Equity









Share capital




65,374



65,871


Convertible debentures – equity component




342



342


Equity settled share-based compensation




2,985



2,419


Accumulated deficit




(14,013)



(15,427)

Total Shareholders' Equity




54,688



53,205









Total Liabilities and Shareholders' Equity



$

85,071


$

82,877

 

 

BrightPath Early Learning Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

Three and twelve months ended December 31, 2015 and 2014














Three months ended
December 31,



Year ended
December 31,

(CDN $000's except for per share amounts)



2015


2014



2015


2014












Revenue


$

13,271

$

12,471


$

52,409

$

49,258

Government grants



525


440



1,761


1,550

Total revenue



13,796


12,911



54,170


50,808












Centre expenses












Salaries, wages and benefits



7,500


6,920



29,228


27,007


Other operating expenses



2,667


2,250



10,123


9,982

Centre margin



3,629


3,741



14,819


13,819












Operating leases



1,153


897



3,980


3,196

Finance costs



303


348



1,334


1,449

General and administrative



1,129


903



4,850


4,487

Taxes, other than income taxes



41


52



168


182

Restructuring costs



-


-



-


968

Acquisition and development



468


736



1,454


1,613

Gain on sale and leaseback



-


-



(1,791)


-

Loss on disposition of development land



-


34



-


302

Share-based compensation



272


107



566


411

Depreciation and amortization



808


772



3,139


2,914




4,174


3,849



13,700


15,522












Profit (loss) before other income and income taxes



(545)


(108)



1,119


(1,703)












Other income



(15)


23



105


135

Profit (loss) before income taxes



(560)


(85)



1,224


(1,568)












Income taxes



-


-



-


-

Net Profit (Loss) and Total Comprehensive Income (Loss)


$

(560)

$

(85)


$

1,224

$

(1,568)












Net profit (loss) per share












Basic


$

(0.005)

$

(0.001)


$

0.010

$

(0.013)


Diluted


$

(0.005)

$

(0.001)


$

0.010

$

(0.013)

 

 

BrightPath Early Learning Inc.

Consolidated Statements of Changes in Shareholders' Equity

Years ended December 31, 2015 and 2014















(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













Share-based compensation



-


-


411


-


411

Deferred share units redeemed



18


-


(18)


-


-

Shares purchased for cancellation



(177)


-


-


52


(125)

Net loss and comprehensive loss



-


-


-


(1,568)


(1,568)













Balance at December 31, 2014


$

65,871

$

342

$

2,419

$

(15,427)

$

53,205













Balance at January 1, 2015


$

65,871

$

342

$

2,419

$

(15,427)

$

53,205













Share-based compensation



-


-


566


-


566

Shares purchased for cancellation



(497)


-


-


190


(307)













Net profit and comprehensive income



-


-


-


1,224


1,224













Balance at December 31, 2015


$

65,374

$

342

$

2,985

$

(14,013)

$

54,688

 

 

BrightPath Early Learning Inc.

Consolidated Statements of Cash Flow

Three and twelve months ended December 31, 2015 and 2014


















Three months ended
December 31,



Year ended
December 31,

(CDN $000's)



2015


2014



2015


2014












Cash provided by (used in):






















Operating Activities











Net profit (loss)


$

(560)

$

(85)


$

1,224

$

(1,568)

Items not affecting cash:












Depreciation and amortization



808


772



3,139


2,914


Depreciation included in operating costs



41


37



154


150


Finance costs



303


348



1,334


1,449


Gain on sale and leaseback



-


-



(1,791)


-


Loss on disposition of development land



-


34



-


302


Share-based compensation



272


107



566


411


Change in fair value of convertible debenture liability component



(5)


(24)



(116)


(122)

Change in non-cash working capital



(2,543)


(1,290)



168


(1,677)

Change in non-current portion of provision for restructuring costs



-


(68)



(45)


(73)

Cash provided by (used in) operations



(1,684)


(169)



4,633


1,786












Finance costs paid



(338)


(400)



(1,127)


(1,232)




(2,022)


(569)



3,506


554












Investing Activities











Property and equipment



(1,444)


(636)



(10,674)


(3,509)

Net proceeds on sale and leaseback



-


-



7,214


-

Net proceeds on disposition of development land



-


718



-


718




(1,444)


82



(3,460)


(2,791)












Financing Activities











Loan proceeds



2,997


3,298



3,931


3,298

Loan repayments



(277)


(311)



(5,247)


(1,166)

Financing transaction costs



(4)


(21)



(36)


(68)

Finance lease repayments



(86)


(63)



(281)


(247)

Shares purchased for cancellation



(155)


(65)



(331)


(65)




2,475


2,838



(1,964)


1,752












Change in Cash



(991)


2,351



(1,918)


(485)

Cash at beginning of period



2,528


1,104



3,455


3,940

Cash at end of period


$

1,537

$

3,455


$

1,537

$

3,455

 

SOURCE BrightPath Early Learning Inc.

For further information: regarding this release, please contact Dale Kearns, President & Chief Financial Officer of BrightPath Early Learning Inc. at (403) 705-0362 ext. 406.

RELATED LINKS
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