Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 25, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-35780 | |
Entity Registrant Name | BRIGHT HORIZONS FAMILY SOLUTIONS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0188269 | |
Entity Address, Address Line One | 2 Wells Avenue | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02459 | |
City Area Code | (617) | |
Local Phone Number | 673-8000 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | BFAM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 58,004,156 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001437578 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 63,683 | $ 71,568 |
Accounts receivable — net of allowance for credit losses of $2,738 and $2,317 at March 31, 2024 and December 31, 2023, respectively | 219,761 | 281,710 |
Prepaid expenses and other current assets | 64,774 | 93,621 |
Total current assets | 348,218 | 446,899 |
Fixed assets — net | 574,446 | 579,296 |
Goodwill | 1,771,412 | 1,786,405 |
Other intangible assets — net | 208,430 | 216,576 |
Operating lease right-of-use assets | 767,470 | 774,703 |
Other assets | 121,427 | 92,265 |
Total assets | 3,791,403 | 3,896,144 |
Current liabilities: | ||
Current portion of long-term debt | 21,000 | 18,500 |
Accounts payable and accrued expenses | 237,966 | 259,077 |
Current portion of operating lease liabilities | 99,769 | 100,387 |
Deferred revenue | 278,592 | 272,891 |
Other current liabilities | 49,097 | 148,578 |
Total current liabilities | 686,424 | 799,433 |
Long-term debt — net | 938,060 | 944,264 |
Operating lease liabilities | 788,894 | 796,701 |
Other long-term liabilities | 105,784 | 101,259 |
Deferred revenue | 10,554 | 8,656 |
Deferred income taxes | 32,418 | 33,155 |
Total liabilities | 2,562,134 | 2,683,468 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued or outstanding at March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock, $0.001 par value; 475,000,000 shares authorized; 57,953,066 and 57,817,593 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 58 | 58 |
Additional paid-in capital | 663,406 | 645,894 |
Accumulated other comprehensive loss | (77,009) | (59,101) |
Retained earnings | 642,814 | 625,825 |
Total stockholders’ equity | 1,229,269 | 1,212,676 |
Total liabilities and stockholders’ equity | $ 3,791,403 | $ 3,896,144 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss, current | $ 2,738 | $ 2,317 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 475,000,000 | 475,000,000 |
Common stock, shares issued (in shares) | 57,953,066 | 57,817,593 |
Common stock, shares outstanding (in shares) | 57,953,066 | 57,817,593 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 622,709 | $ 553,606 |
Cost of services | 487,581 | 431,992 |
Gross profit | 135,128 | 121,614 |
Selling, general and administrative expenses | 87,546 | 82,771 |
Amortization of intangible assets | 7,645 | 8,198 |
Income from operations | 39,937 | 30,645 |
Interest expense — net | (13,681) | (12,916) |
Income before income tax | 26,256 | 17,729 |
Income tax expense | (9,267) | (9,603) |
Net income | $ 16,989 | $ 8,126 |
Earnings per common share: | ||
Common stock — basic (in dollars per share) | $ 0.29 | $ 0.14 |
Common stock — diluted (in dollars per share) | $ 0.29 | $ 0.14 |
Weighted average common shares outstanding: | ||
Common stock — basic (in shares) | 57,878,401 | 57,603,866 |
Common stock — diluted (in shares) | 58,310,405 | 57,709,909 |
Cost, Product and Service [Extensible Enumeration] | Service [Member] | Service [Member] |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,989 | $ 8,126 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (20,319) | 6,880 |
Unrealized gain (loss) on cash flow hedges and investments, net of tax | 2,411 | (8,899) |
Total other comprehensive loss | (17,908) | (2,019) |
Comprehensive income (loss) | $ (919) | $ 6,107 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock, at Cost | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2022 | 57,531,130 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,080,453 | $ 58 | $ 599,422 | $ 0 | $ (70,629) | $ 551,602 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 5,850 | 5,850 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 169,798 | |||||
Issuance of common stock under the Equity Incentive Plan | 12,558 | 12,558 | ||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (21,252) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (1,525) | (1,525) | ||||
Other comprehensive loss | (2,019) | (2,019) | ||||
Net income | 8,126 | 8,126 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 57,679,676 | |||||
Ending balance at Mar. 31, 2023 | $ 1,103,443 | $ 58 | 616,305 | 0 | (72,648) | 559,728 |
Beginning balance (in shares) at Dec. 31, 2023 | 57,817,593 | 57,817,593 | ||||
Beginning balance at Dec. 31, 2023 | $ 1,212,676 | $ 58 | 645,894 | 0 | (59,101) | 625,825 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 7,411 | 7,411 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 151,051 | |||||
Issuance of common stock under the Equity Incentive Plan | 11,589 | 11,589 | ||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (15,578) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (1,488) | (1,488) | ||||
Other comprehensive loss | (17,908) | (17,908) | ||||
Net income | $ 16,989 | 16,989 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 57,953,066 | 57,953,066 | ||||
Ending balance at Mar. 31, 2024 | $ 1,229,269 | $ 58 | $ 663,406 | $ 0 | $ (77,009) | $ 642,814 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 16,989 | $ 8,126 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 27,633 | 27,310 | |
Stock-based compensation expense | 7,411 | 5,850 | |
Deferred income taxes | (1,707) | (597) | |
Non-cash interest and other — net | 5,447 | 2,478 | |
Changes in assets and liabilities: | |||
Accounts receivable | 61,648 | (13,271) | |
Prepaid expenses and other current assets | 5,765 | (8,136) | |
Accounts payable and accrued expenses | (19,921) | (20,266) | |
Income taxes | 7,082 | 5,444 | |
Deferred revenue | 8,109 | 40,249 | |
Leases | (1,659) | 1,521 | |
Other assets | (2,544) | 2,836 | |
Other current and long-term liabilities | 2,048 | 15,769 | |
Net cash provided by operating activities | 116,301 | 67,313 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of fixed assets - net | (19,371) | (19,333) | |
Purchases of debt securities and other investments | (27,076) | (6,225) | |
Proceeds from the maturity of debt securities and sale of other investments | 10,900 | 7,450 | |
Payments and settlements for acquisitions — net of cash acquired | (2,503) | (121) | |
Net cash used in investing activities | (38,050) | (18,229) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under revolving credit facility | 140,000 | 120,000 | |
Payments under revolving credit facility | (140,000) | (159,500) | |
Principal payments of long-term debt | (4,000) | (4,000) | |
Proceeds from issuance of common stock upon exercise of options | 5,509 | 4,287 | |
Taxes paid related to the net share settlement of stock options and restricted stock | (1,488) | (1,525) | |
Payments of deferred and contingent consideration for acquisitions | (97,653) | (225) | |
Net cash used in financing activities | (97,632) | (40,963) | |
Effect of exchange rates on cash, cash equivalents and restricted cash | (670) | (114) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (20,051) | 8,007 | |
Cash, cash equivalents and restricted cash — beginning of period | 89,451 | 51,894 | $ 51,894 |
Cash, cash equivalents and restricted cash — end of period | 69,400 | 59,901 | 89,451 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: | |||
Cash and cash equivalents | 63,683 | 44,629 | 71,568 |
Restricted cash, included in prepaid expenses and other current assets | 3,576 | 12,740 | |
Restricted cash, included in other assets | 2,141 | 2,532 | |
Total cash, cash equivalents and restricted cash — end of period | 69,400 | 59,901 | $ 89,451 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash payments of interest | 19,624 | 17,848 | |
Cash received from cash flow hedges of interest rate risk | 6,221 | 7,730 | |
Cash payments of income taxes | 3,857 | 4,903 | |
Cash paid for amounts included in the measurement of lease liabilities | 37,960 | 39,379 | |
NON-CASH TRANSACTIONS: | |||
Fixed asset purchases recorded in accounts payable and accrued expenses | 1,528 | 2,167 | |
Operating right-of-use assets obtained in exchange for operating lease liabilities — net | 23,725 | 16,375 | |
Restricted stock reclassified from other current liabilities to equity upon vesting | $ 6,080 | $ 8,192 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Organization — Bright Horizons Family Solutions Inc. (“Bright Horizons” or the “Company”) provides center-based early education and child care, back-up child and adult/elder care, tuition assistance and student loan repayment program management, and educational advisory services for employers and families in the United States, the United Kingdom, the Netherlands, Australia and India. The Company provides services designed to help families, employers and their employees better integrate work and family life, primarily under multi-year contracts with employers who offer early education and child care, back-up and family care, and workforce education services as part of their employee benefits packages in an effort to support employees across life and career stages and improve employee engagement. As of March 31, 2024, we operated 1,044 early education and child care centers. Basis of Presentation — The accompanying unaudited condensed consolidated balance sheet as of March 31, 2024 and the unaudited condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended March 31, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required in accordance with U.S. GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the Company’s unaudited condensed consolidated balance sheet as of March 31, 2024 and the unaudited condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended March 31, 2024 and 2023, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments. The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment. Segment information for 2023 has been recast to conform to the current year presentation. During the three months ended March 31, 2023, the Company recorded expense of $6.0 million for an immaterial correction of an error related to value-added tax incurred in prior periods, of which $4.3 million is included in cost of services and $1.7 million is included in selling, general and administrative expenses. Refer to Note 11, Segment Information , for additional information. Stockholders ’ Equity — The board of directors of the Company authorized a share repurchase program of up to $400 million of the Company’s outstanding common stock effective December 16, 2021. The share repurchase program has no expiration date. The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, under Rule 10b5-1 plans, or by other means in accordance with federal securities laws. During the three months ended March 31, 2024 and the three months ended March 31, 2023, there were no share repurchases under the repurchase program. All repurchased shares have been retired and, at March 31, 2024, $198.3 million remained available under the Board-approved repurchase program. Government Support — During the three months ended March 31, 2023, the Company participated in certain government support programs that were enacted in response to the economic impact of the COVID-19 pandemic. With the expiration of the child care stabilization grants on September 30, 2023, most of the pandemic-related government support programs for which the Company was eligible ended in 2023. During the three months ended March 31, 2023, $21.6 million was recorded as a reduction to cost of services in relation to these benefits, of which $7.4 million reduced the operating subsidies paid by employers for the related child care centers. Additionally, during the three months ended March 31, 2023, $0.6 million was recorded to revenue related to amounts received for tuition support. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into segments and geographical regions. Revenue disaggregated by segment and geographical region was as follows: Full service Back-up care Educational Total (In thousands) Three months ended March 31, 2024 North America $ 320,203 $ 103,411 $ 24,397 $ 448,011 International 163,437 11,261 — 174,698 $ 483,640 $ 114,672 $ 24,397 $ 622,709 Three months ended March 31, 2023 North America $ 284,584 $ 91,620 $ 24,285 $ 400,489 International 145,607 7,510 — 153,117 $ 430,191 $ 99,130 $ 24,285 $ 553,606 The classification “North America” is comprised of the Company’s operations in the United States (including Puerto Rico) and the classification “International” includes the Company’s operations in the United Kingdom, the Netherlands, Australia and India. Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments. The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment. Segment information for 2023 has been recast to conform to the current year presentation. Deferred Revenue The Company records deferred revenue when payments are received in advance of the Company’s performance under the contract, which is recognized as revenue as the performance obligation is satisfied. The Company recognized $169.3 million and $140.8 million as revenue during the three months ended March 31, 2024 and 2023, respectively, which was included in the deferred revenue balance at the beginning of each respective period. Remaining Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for contracts with an original contract term of one year or less, or for variable consideration allocated to the unsatisfied performance obligation of a series of services. The transaction price allocated to the remaining performance obligations relates to services that are paid or invoiced in advance. The Company’s remaining performance obligations not subject to the practical expedients were not material. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for certain of its full service and back-up early education and child care centers, corporate offices, call centers, and to a lesser extent, various office equipment, in the United States, the United Kingdom, the Netherlands, and Australia. Most of the leases expire within 10 to 15 years and many contain renewal options and/or termination provisions. As of March 31, 2024 and December 31, 2023, there were no material finance leases. Lease Expense The components of lease expense were as follows: Three months ended March 31, 2024 2023 (In thousands) Operating lease expense (1) $ 37,731 $ 37,968 Variable lease expense (1) 10,771 11,175 Total lease expense $ 48,502 $ 49,143 (1) Excludes short-term lease expense and sublease income, which were immaterial for the periods presented. Other Information The weighted average remaining lease term and the weighted average discount rate were as follows: March 31, 2024 December 31, 2023 Weighted average remaining lease term (in years) 10 10 Weighted average discount rate 7.1% 7.1% Maturity of Lease Liabilities The following table summarizes the maturity of lease liabilities as of March 31, 2024: Operating Leases (In thousands) Remainder of 2024 $ 108,275 2025 151,673 2026 145,496 2027 136,311 2028 125,397 Thereafter 588,310 Total lease payments 1,255,462 Less imputed interest (366,799) Present value of lease liabilities 888,663 Less current portion of operating lease liabilities (99,769) Long-term operating lease liabilities $ 788,894 As of March 31, 2024, the Company had entered into additional operating leases with total fixed payment obligations of $14.8 million that have not yet commenced. The leases are expected to commence between the second and third quarter of fiscal 2024 and have initial lease terms of approximately 15 years. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company’s growth strategy includes expansion through strategic and synergistic acquisitions. The goodwill resulting from these acquisitions arises largely from synergies expected from combining the operations of the businesses acquired with the Company’s existing operations, including cost efficiencies and leveraging existing client relationships, as well as from benefits derived from gaining the related assembled workforce. 2024 Acquisitions During the three months ended March 31, 2024, the Company acquired one center in Australia, which was accounted for as a business combination. This business was acquired for aggregate cash consideration of $2.5 million. The Company recorded goodwill of $2.3 million related to the full service center-based child care segment, which will not be deductible for tax purposes. In addition, the Company recorded intangible assets of $0.4 million that will be amortized over four years. The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of March 31, 2024, the purchase price allocation for this acquisition remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed. The operating results for the acquired business is included in the consolidated results of operations from the date of acquisition and were not material to the Company’s financial results. In January 2024, the Company paid deferred consideration of $106.5 million related to the 2022 acquisition of Only About Children, a child care operator in Australia. The acquisition date fair value of the deferred consideration of $97.7 million is presented as cash used in financing activities in the consolidated statement of cash flows while the accrued interest is presented as cash used in operating activities. 2023 Acquisitions During the year ended December 31, 2023, the Company acquired four centers in the United States and six centers in Australia, in five separate business acquisitions, which were each accounted for as a business combination. The businesses were acquired for aggregate cash consideration of $39.5 million, which is subject to adjustments from the settlement of the final working capital and acquired enrollment. The Company recorded goodwill of $37.2 million related to the full service center-based child care segment in relation to these acquisitions, of which $25.5 million will be deductible for tax purposes. In addition, the Company recorded intangible assets of $4.0 million that will be amortized over four years. The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of March 31, 2024, the purchase price allocation for these acquisitions remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed. The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition and were not material to the Company’s financial results. During the year ended December 31, 2023, the Company paid contingent consideration of $0.2 million related to an acquisition completed in 2021, which had been recorded as a liability at the date of acquisition and is presented as cash used in financing activities in the consolidated statement of cash flows. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill were as follows: Full service Back-up care Educational Total (In thousands) Balance at January 1, 2024 $ 1,539,264 $ 209,465 $ 37,676 $ 1,786,405 Additions from acquisitions 2,342 — — 2,342 Adjustments to prior year acquisitions (25) — — (25) Effect of foreign currency translation (17,103) (207) — (17,310) Balance at March 31, 2024 $ 1,524,478 $ 209,258 $ 37,676 $ 1,771,412 Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments. As a result, the goodwill beginning balance reflects the change in reportable segments. The Company also has intangible assets, which consisted of the following at March 31, 2024 and December 31, 2023: March 31, 2024 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 10 years $ 396,326 $ (375,686) $ 20,640 Trade names 10 years 19,245 (11,990) 7,255 415,571 (387,676) 27,895 Indefinite-lived intangible assets: Trade names N/A 180,535 — 180,535 $ 596,106 $ (387,676) $ 208,430 December 31, 2023 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 11 years $ 397,079 $ (368,963) $ 28,116 Trade names 10 years 19,664 (11,795) 7,869 416,743 (380,758) 35,985 Indefinite-lived intangible assets: Trade names N/A 180,591 — 180,591 $ 597,334 $ (380,758) $ 216,576 The Company estimates that it will record amortization expense related to intangible assets existing as of March 31, 2024 as follows: Estimated amortization expense (In thousands) Remainder of 2024 $ 10,305 2025 5,863 2026 4,097 2027 2,937 2028 1,606 Thereafter 3,087 $ 27,895 |
CREDIT ARRANGEMENTS AND DEBT OB
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS | CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS Senior Secured Credit Facilities The Company’s senior secured credit facilities consist of a $600 million term loan B facility (“term loan B”) and a $400 million term loan A facility (“term loan A” and, together with term loan B, the “term loan facilities” or “term loans”), as well as a $400 million multi-currency revolving credit facility (“revolving credit facility”). Long-term debt obligations were as follows: March 31, 2024 December 31, 2023 (In thousands) Term loan B $ 586,500 $ 588,000 Term loan A 377,500 380,000 Deferred financing costs and original issue discount (4,940) (5,236) Total debt 959,060 962,764 Less current maturities (21,000) (18,500) Long-term debt $ 938,060 $ 944,264 All borrowings under the credit facilities are subject to variable interest. The effective interest rate for the term loans was 7.50% and 7.52% at March 31, 2024 and December 31, 2023, respectively, and the weighted average interest rate was 7.51% and 6.67% for the three months ended March 31, 2024 and 2023, respectively, prior to the effects of any interest rate hedge arrangements. There were no borrowings outstanding under the revolving credit facility at March 31, 2024 and December 31, 2023. The weighted average interest rate for the revolving credit facility was 7.62% and 6.76% for the three months ended March 31, 2024 and 2023, respectively. The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected borrowing cycle as rates can vary between under-30 day and over-30 day borrowings. Term Loan B Facility The seven-year term loan B matures on November 23, 2028 and requires quarterly principal payments equal to 1% per annum of the original aggregate principal amount of the term loan B, with the remaining principal balance due at maturity. Borrowings under the term loan B facility bear interest at a rate per annum of 1.25% over the base rate, or 2.25% over the adjusted term SOFR rate. The base rate is subject to an interest rate floor of 1.50% and the adjusted term SOFR rate is subject to an interest rate floor of 0.50%. Term Loan A Facility The five-year term loan A matures on November 23, 2026 and requires quarterly principal payments equal to 2.5% per annum of the original aggregate principal amount of the term loan A in each of the first three years, 5.0% in the fourth year, and 7.5% in the fifth year. The remaining principal balance is due at maturity. Borrowings under the term loan A facility bear interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate. The base rate is subject to an interest rate floor of 1.00% and the adjusted term SOFR rate is subject to an interest rate floor of 0.00%. Revolving Credit Facility The $400 million multi-currency revolving credit facility matures on May 26, 2026. At March 31, 2024, there were no borrowings outstanding under the revolving credit facility and letters of credit outstanding were $10.2 million, with $389.8 million available for borrowing. At December 31, 2023, there were no borrowings outstanding under the revolving credit facility and letters of credit outstanding were $19.3 million, with $380.7 million available for borrowing. In January 2024, the Company utilized the revolving credit facility, combined with available cash on hand, to pay deferred consideration of $106.5 million related to the 2022 acquisition of Only About Children. Borrowings on the revolving credit facility were subsequently repaid during the quarter ended March 31, 2024. Refer to Note 4, Acquisitions , for additional information. Borrowings under the revolving credit facility bear interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, or 1.50% to 1.75% over the adjusted term SOFR rate. The base rate is subject to an interest rate floor of 1.00% and the adjusted term SOFR rate is subject to an interest rate floor of 0.00%. Debt Covenants All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material U.S. subsidiaries. The senior secured credit facilities contain a number of covenants that, among other things and subject to certain exceptions, may restrict the ability of Bright Horizons Family Solutions LLC, the Company’s wholly-owned subsidiary, and its restricted subsidiaries, to: incur liens; make investments, loans, advances and acquisitions; incur additional indebtedness or guarantees; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; engage in transactions with affiliates; sell assets, including capital stock of the Company’s subsidiaries; alter the business conducted; enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and consolidate or merge. In addition, the credit agreement governing the senior secured credit facilities requires Bright Horizons Capital Corp., the Company’s direct subsidiary, to be a passive holding company, subject to certain exceptions. The term loan A and the revolving credit facility require Bright Horizons Family Solutions LLC, the borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00. A breach of the applicable covenant is subject to certain equity cure rights. Future principal payments of long-term debt are as follows for the years ending December 31: Long-term debt (In thousands) Remainder of 2024 $ 14,500 2025 28,500 2026 351,000 2027 6,000 2028 564,000 Total future principal payments $ 964,000 Derivative Financial Instruments The Company is subject to interest rate risk, as all borrowings under the senior secured credit facilities are subject to variable interest rates. The Company’s risk management policy permits using derivative instruments to manage interest rate and other risks. The Company uses interest rate caps to manage a portion of the risk related to changes in cash flows from interest rate movements. In June 2020, the Company entered into interest rate cap agreements with a total notional value of $800 million, designated and accounted for as cash flow hedges from inception, to provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 0.9%. Interest rate cap agreements for $300 million notional value had an effective date of June 30, 2020 and expired on October 31, 2023, while interest rate cap agreements for another $500 million notional amount had an effective date of October 29, 2021 and expired on October 31, 2023. In December 2021, the Company entered into additional interest rate cap agreements with a total notional value of $900 million designated and accounted for as cash flow hedges from inception. Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2025, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.4%. Interest rate cap agreements for $300 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.9%. The fair value of the derivative financial instruments was as follows for the periods presented: Derivative financial instruments Consolidated balance sheet classification March 31, 2024 December 31, 2023 (In thousands) Interest rate caps - asset Other assets $ 31,757 $ 28,968 The effect of the derivative financial instruments on other comprehensive income (loss) was as follows: Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Three months ended March 31, 2024 Cash flow hedges $ 9,008 Interest expense — net $ 5,751 $ 3,257 Income tax effect (2,405) Income tax expense (1,535) (870) Net of income taxes $ 6,603 $ 4,216 $ 2,387 Three months ended March 31, 2023 Cash flow hedges $ (5,264) Interest expense — net $ 6,976 $ (12,240) Income tax effect 1,405 Income tax expense (1,863) 3,268 Net of income taxes $ (3,859) $ 5,113 $ (8,972) During the next 12 months, the Company estimates that a net gain of $18.0 million, pre-tax, will be reclassified from accumulated other comprehensive loss and recorded as a reduction to interest expense related to these derivative financial instruments. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following tables set forth the computation of basic and diluted earnings per share: Three months ended March 31, 2024 2023 (In thousands, except share data) Basic earnings per share: Net income $ 16,989 $ 8,126 Allocation of net income to common stockholders: Common stock $ 16,989 $ 8,098 Unvested participating shares — 28 Net income $ 16,989 $ 8,126 Weighted average common shares outstanding: Common stock 57,878,401 57,603,866 Unvested participating shares 94,158 202,749 Earnings per common share: Common stock $ 0.29 $ 0.14 Three months ended March 31, 2024 2023 (In thousands, except share data) Diluted earnings per share: Earnings allocated to common stock $ 16,989 $ 8,098 Plus: earnings allocated to unvested participating shares — 28 Less: adjusted earnings allocated to unvested participating shares — (28) Earnings allocated to common stock $ 16,989 $ 8,098 Weighted average common shares outstanding: Common stock 57,878,401 57,603,866 Effect of dilutive securities 432,004 106,043 Weighted average common shares outstanding — diluted 58,310,405 57,709,909 Earnings per common share: Common stock $ 0.29 $ 0.14 For the three months ended March 31, 2024 and 2023, basic and diluted earnings per share were calculated using the treasury method and the two-class method, respectively. Equity awards outstanding to purchase or receive 1.6 million and 2.0 million shares of common stock were excluded from diluted earnings per share for the three months ended March 31, 2024 and 2023, respectively, since their effect was anti-dilutive. These equity awards may become dilutive in the future. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective income tax rates were 35.3% and 54.2% for the three months ended March 31, 2024 and 2023, respectively. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including changes to income before income tax, jurisdictional mix of income before income tax, unbenefited losses, valuation allowances, jurisdictional income tax rate changes, as well as discrete items such as non-deductible transaction costs, the settlement of foreign, federal and state tax issues and the effects of excess (shortfall) tax benefit (expense) associated with the exercise or expiration of stock options and vesting of restricted stock, which is included in tax expense. During the three months ended March 31, 2024 and 2023, the net shortfall tax expense from stock-based compensation expense increased tax expense by $0.7 million and $2.1 million, respectively. For the three months ended March 31, 2024 and 2023, prior to the inclusion of the shortfall tax expense, other discrete items and unbenefited losses in certain foreign jurisdictions, the effective income tax rate approximated 28% and 30%, respectively. The Company’s unrecognized tax benefits were $4.7 million and $4.6 million at March 31, 2024 and December 31, 2023, respectively, inclusive of interest. The unrecognized tax benefits may change over the next 12 months by up to $4.3 million. The Company and its domestic subsidiaries are subject to U.S. federal income tax as well as tax in multiple state jurisdictions. U.S. federal income tax returns are typically subject to examination by the Internal Revenue Service and the statute of limitations for federal tax returns is three years. The Company’s filings for the tax years 2020 through 2022 are subject to audit based upon the federal statute of limitations. State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. The Company's filings for the tax years 2019 through 2022 are subject to audit based upon the statute of limitations. The Company is also subject to corporate income tax for its subsidiaries located in the United Kingdom, the Netherlands, Australia, India, and Puerto Rico. The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to six years. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified using a three-level hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Company uses observable inputs where relevant and whenever possible. The three levels of the hierarchy are defined as follows: Level 1 — Fair value is derived using quoted prices from active markets for identical instruments. Level 2 — Fair value is derived using quoted prices for similar instruments from active markets or for identical or similar instruments in markets that are not active; or, fair value is based on model-derived valuations in which all significant inputs and significant value drivers are observable from active markets. Level 3 — Fair value is derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximates their fair value because of their short-term nature. Financial instruments that potentially expose the Company to concentrations of credit risk consisted mainly of cash and accounts receivable. The Company mitigates its exposure by maintaining its cash in financial institutions of high credit standing. The Company’s accounts receivable are derived primarily from the services it provides, and the related credit risk is dispersed across many clients in various industries with no single client accounting for more than 10% of the Company’s net revenue or accounts receivable. No significant credit concentration risk existed at March 31, 2024. Long-term Debt — The Company’s long-term debt is recorded at adjusted cost, net of original issue discounts and deferred financing costs. The fair value of the Company’s long-term debt is based on current bid prices or prices for similar instruments from active markets. As such, the Company’s long-term debt was classified as Level 2. As of March 31, 2024 and December 31, 2023, the estimated fair value approximated the carrying value of long-term debt. Derivative Financial Instruments — The Company’s interest rate cap agreements are recorded at fair value and estimated using market-standard valuation models. Such models project future cash flows and discount the future amounts to a present value using market-based observable inputs. Additionally, the fair value of the interest rate caps included consideration of credit risk. The Company used a potential future exposure model to estimate this credit valuation adjustment (“CVA”). The inputs to the CVA were largely based on observable market data, with the exception of certain assumptions regarding credit worthiness. As the magnitude of the CVA was not a significant component of the fair value of the interest rate caps, it was not considered a significant input. The fair value of the interest rate caps is classified as Level 2. As of March 31, 2024 and December 31, 2023, the fair value of the interest rate cap agreements was $31.8 million and $29.0 million, respectively, and was recorded in other assets on the consolidated balance sheet. Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, consist of U.S. Treasury and U.S. government agency securities, asset-backed securities, certificates of deposit and corporate bonds. These securities are held in escrow by the Company’s wholly-owned captive insurance company and were purchased with restricted cash. As such, these securities are not available to fund the Company’s operations. These securities are recorded at fair value using quoted prices available in active markets and are classified as Level 1. As of March 31, 2024, the fair value of the available-for-sale debt securities was $34.9 million and was classified based on the instruments’ maturity dates, with $13.7 million included in prepaid expenses and other current assets and $21.2 million in other assets on the consolidated balance sheet. As of December 31, 2023, the fair value of the available-for-sale debt securities was $23.9 million, with $22.0 million included in prepaid expenses and other current assets and $1.9 million in other assets on the consolidated balance sheet. At March 31, 2024 and December 31, 2023, the amortized cost was $34.4 million and $24.0 million, respectively. The debt securities held at March 31, 2024 had remaining maturities ranging from less than one year to approximately ten years. Unrealized gains and losses, net of tax, on available-for-sale debt securities were immaterial for the three months ended March 31, 2024 and 2023. Liabilities for Contingent Consideration — The Company is subject to contingent consideration arrangements in connection with certain business combinations. Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration payable for the related business combination and subsequent changes in fair value recorded to selling, general and administrative expenses on the Company’s consolidated statement of income. The fair value of contingent consideration was generally calculated using customary valuation models based on probability-weighted outcomes of meeting certain future performance targets and forecasted results. The key inputs to the valuations are the projections of future financial results in relation to the businesses and the company-specific discount rates. The Company classified the contingent consideration liabilities as a Level 3 fair value measurement due to the lack of observable inputs used in the model. The following table provides a roll forward of the recurring Level 3 fair value measurements: Three months ended March 31, 2024 (In thousands) Balance at January 1, 2024 $ 11,516 Changes in fair value 2,820 Balance at March 31, 2024 $ 14,336 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss, which is included as a component of stockholders’ equity, is comprised of foreign currency translation adjustments and unrealized gains (losses) on cash flow hedges and investments, net of tax. The changes in accumulated other comprehensive income (loss) by component were as follows: Three months ended March 31, 2024 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2024 $ (76,130) $ 17,100 $ (71) $ (59,101) Other comprehensive income (loss) before reclassifications — net of tax (20,319) 6,603 19 (13,697) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 4,216 (5) 4,211 Net other comprehensive income (loss) (20,319) 2,387 24 (17,908) Balance at March 31, 2024 $ (96,449) $ 19,487 $ (47) $ (77,009) Three months ended March 31, 2023 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2023 $ (105,138) $ 34,738 $ (229) $ (70,629) Other comprehensive income (loss) before reclassifications — net of tax 6,880 (3,859) 59 3,080 Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 5,113 (14) 5,099 Net other comprehensive income (loss) 6,880 (8,972) 73 (2,019) Balance at March 31, 2023 $ (98,258) $ 25,766 $ (156) $ (72,648) (1) Taxes are not provided for the currency translation adjustments related to the undistributed earnings of foreign subsidiaries that are intended to be indefinitely reinvested. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory services. The full service center-based child care segment includes the traditional center-based early education and child care, preschool, and elementary education. The Company’s back-up care segment consists of center-based back-up child care, in-home care for children and adult/elder dependents, school-age camps, tutoring, pet care, self-sourced reimbursed care, and Sittercity, an online marketplace for families and caregivers. The Company’s educational advisory services segment consists of tuition assistance and student loan repayment program management, workforce education, related educational advising, and college advisory services. The Company and its chief operating decision maker evaluate performance based on revenue and income from operations. Intercompany activity is eliminated in the segment results. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; therefore, no segment asset information is produced or included herein. Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments. As a result, the back-up care reportable segment now includes the Sittercity operations. Segment information for 2023 has been recast to conform to the current year presentation. Revenue and income from operations by reportable segment were as follows: Full service Back-up care Educational Total (In thousands) Three months ended March 31, 2024 Revenue $ 483,640 $ 114,672 $ 24,397 $ 622,709 Income from operations 21,444 15,983 2,510 39,937 Three months ended March 31, 2023 Revenue $ 430,191 $ 99,130 $ 24,285 $ 553,606 Income from operations (1) 8,433 17,773 4,439 30,645 (1) For the three months ended March 31, 2023, income from operations included value-added-tax expense of $6.0 million related to prior periods, of which $4.3 million was associated with the back-up care segment and $1.7 million was associated with the full service center-based child care segment. Refer to Note 1, Organization and Basis of Presentation , for additional information. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 16,989 | $ 8,126 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Mary Lou Burke Afonso [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 11, 2024, Mary Lou Burke Afonso, Chief Operating Officer, North America Center Operations, adopted a stock trading plan for the sale of up to 22,300 shares of the Company's common stock until December 2, 2024. This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, and the Company's policies regarding transactions in our securities. |
Name | Mary Lou Burke Afonso |
Title | Chief Operating Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 11, 2024 |
Arrangement Duration | 266 days |
Aggregate Available | 22,300 |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying unaudited condensed consolidated balance sheet as of March 31, 2024 and the unaudited condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended March 31, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required in accordance with U.S. GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the Company’s unaudited condensed consolidated balance sheet as of March 31, 2024 and the unaudited condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended March 31, 2024 and 2023, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments. The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment. Segment information for 2023 has been recast to conform to the current year presentation. |
Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified using a three-level hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Company uses observable inputs where relevant and whenever possible. The three levels of the hierarchy are defined as follows: Level 1 — Fair value is derived using quoted prices from active markets for identical instruments. Level 2 — Fair value is derived using quoted prices for similar instruments from active markets or for identical or similar instruments in markets that are not active; or, fair value is based on model-derived valuations in which all significant inputs and significant value drivers are observable from active markets. Level 3 — Fair value is derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue disaggregated by segment and geographical region was as follows: Full service Back-up care Educational Total (In thousands) Three months ended March 31, 2024 North America $ 320,203 $ 103,411 $ 24,397 $ 448,011 International 163,437 11,261 — 174,698 $ 483,640 $ 114,672 $ 24,397 $ 622,709 Three months ended March 31, 2023 North America $ 284,584 $ 91,620 $ 24,285 $ 400,489 International 145,607 7,510 — 153,117 $ 430,191 $ 99,130 $ 24,285 $ 553,606 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Three months ended March 31, 2024 2023 (In thousands) Operating lease expense (1) $ 37,731 $ 37,968 Variable lease expense (1) 10,771 11,175 Total lease expense $ 48,502 $ 49,143 (1) Excludes short-term lease expense and sublease income, which were immaterial for the periods presented. |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | The weighted average remaining lease term and the weighted average discount rate were as follows: March 31, 2024 December 31, 2023 Weighted average remaining lease term (in years) 10 10 Weighted average discount rate 7.1% 7.1% |
Maturities of Lease Liabilities | The following table summarizes the maturity of lease liabilities as of March 31, 2024: Operating Leases (In thousands) Remainder of 2024 $ 108,275 2025 151,673 2026 145,496 2027 136,311 2028 125,397 Thereafter 588,310 Total lease payments 1,255,462 Less imputed interest (366,799) Present value of lease liabilities 888,663 Less current portion of operating lease liabilities (99,769) Long-term operating lease liabilities $ 788,894 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill were as follows: Full service Back-up care Educational Total (In thousands) Balance at January 1, 2024 $ 1,539,264 $ 209,465 $ 37,676 $ 1,786,405 Additions from acquisitions 2,342 — — 2,342 Adjustments to prior year acquisitions (25) — — (25) Effect of foreign currency translation (17,103) (207) — (17,310) Balance at March 31, 2024 $ 1,524,478 $ 209,258 $ 37,676 $ 1,771,412 |
Schedule of Intangible Assets | The Company also has intangible assets, which consisted of the following at March 31, 2024 and December 31, 2023: March 31, 2024 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 10 years $ 396,326 $ (375,686) $ 20,640 Trade names 10 years 19,245 (11,990) 7,255 415,571 (387,676) 27,895 Indefinite-lived intangible assets: Trade names N/A 180,535 — 180,535 $ 596,106 $ (387,676) $ 208,430 December 31, 2023 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 11 years $ 397,079 $ (368,963) $ 28,116 Trade names 10 years 19,664 (11,795) 7,869 416,743 (380,758) 35,985 Indefinite-lived intangible assets: Trade names N/A 180,591 — 180,591 $ 597,334 $ (380,758) $ 216,576 |
Estimated Amortization Expense Related to Intangible Assets | The Company estimates that it will record amortization expense related to intangible assets existing as of March 31, 2024 as follows: Estimated amortization expense (In thousands) Remainder of 2024 $ 10,305 2025 5,863 2026 4,097 2027 2,937 2028 1,606 Thereafter 3,087 $ 27,895 |
CREDIT ARRANGEMENTS AND DEBT _2
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Outstanding Borrowings | Long-term debt obligations were as follows: March 31, 2024 December 31, 2023 (In thousands) Term loan B $ 586,500 $ 588,000 Term loan A 377,500 380,000 Deferred financing costs and original issue discount (4,940) (5,236) Total debt 959,060 962,764 Less current maturities (21,000) (18,500) Long-term debt $ 938,060 $ 944,264 |
Schedule of Maturities of Long-term Debt | Future principal payments of long-term debt are as follows for the years ending December 31: Long-term debt (In thousands) Remainder of 2024 $ 14,500 2025 28,500 2026 351,000 2027 6,000 2028 564,000 Total future principal payments $ 964,000 |
Schedule of Fair Value of Derivative Financial Instruments | The fair value of the derivative financial instruments was as follows for the periods presented: Derivative financial instruments Consolidated balance sheet classification March 31, 2024 December 31, 2023 (In thousands) Interest rate caps - asset Other assets $ 31,757 $ 28,968 |
Schedule of the Effect of Derivatives Financial Instruments on Other Comprehensive Income (Loss) | The effect of the derivative financial instruments on other comprehensive income (loss) was as follows: Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Three months ended March 31, 2024 Cash flow hedges $ 9,008 Interest expense — net $ 5,751 $ 3,257 Income tax effect (2,405) Income tax expense (1,535) (870) Net of income taxes $ 6,603 $ 4,216 $ 2,387 Three months ended March 31, 2023 Cash flow hedges $ (5,264) Interest expense — net $ 6,976 $ (12,240) Income tax effect 1,405 Income tax expense (1,863) 3,268 Net of income taxes $ (3,859) $ 5,113 $ (8,972) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic | The following tables set forth the computation of basic and diluted earnings per share: Three months ended March 31, 2024 2023 (In thousands, except share data) Basic earnings per share: Net income $ 16,989 $ 8,126 Allocation of net income to common stockholders: Common stock $ 16,989 $ 8,098 Unvested participating shares — 28 Net income $ 16,989 $ 8,126 Weighted average common shares outstanding: Common stock 57,878,401 57,603,866 Unvested participating shares 94,158 202,749 Earnings per common share: Common stock $ 0.29 $ 0.14 |
Schedule of Earnings (Loss) Per Share, Diluted | Three months ended March 31, 2024 2023 (In thousands, except share data) Diluted earnings per share: Earnings allocated to common stock $ 16,989 $ 8,098 Plus: earnings allocated to unvested participating shares — 28 Less: adjusted earnings allocated to unvested participating shares — (28) Earnings allocated to common stock $ 16,989 $ 8,098 Weighted average common shares outstanding: Common stock 57,878,401 57,603,866 Effect of dilutive securities 432,004 106,043 Weighted average common shares outstanding — diluted 58,310,405 57,709,909 Earnings per common share: Common stock $ 0.29 $ 0.14 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Roll Forward of the Fair Value of Recurring Level 3 Fair Value Measurements | The following table provides a roll forward of the recurring Level 3 fair value measurements: Three months ended March 31, 2024 (In thousands) Balance at January 1, 2024 $ 11,516 Changes in fair value 2,820 Balance at March 31, 2024 $ 14,336 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component were as follows: Three months ended March 31, 2024 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2024 $ (76,130) $ 17,100 $ (71) $ (59,101) Other comprehensive income (loss) before reclassifications — net of tax (20,319) 6,603 19 (13,697) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 4,216 (5) 4,211 Net other comprehensive income (loss) (20,319) 2,387 24 (17,908) Balance at March 31, 2024 $ (96,449) $ 19,487 $ (47) $ (77,009) Three months ended March 31, 2023 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2023 $ (105,138) $ 34,738 $ (229) $ (70,629) Other comprehensive income (loss) before reclassifications — net of tax 6,880 (3,859) 59 3,080 Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 5,113 (14) 5,099 Net other comprehensive income (loss) 6,880 (8,972) 73 (2,019) Balance at March 31, 2023 $ (98,258) $ 25,766 $ (156) $ (72,648) (1) Taxes are not provided for the currency translation adjustments related to the undistributed earnings of foreign subsidiaries that are intended to be indefinitely reinvested. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Revenue and Income from Operations by Segment | Revenue and income from operations by reportable segment were as follows: Full service Back-up care Educational Total (In thousands) Three months ended March 31, 2024 Revenue $ 483,640 $ 114,672 $ 24,397 $ 622,709 Income from operations 21,444 15,983 2,510 39,937 Three months ended March 31, 2023 Revenue $ 430,191 $ 99,130 $ 24,285 $ 553,606 Income from operations (1) 8,433 17,773 4,439 30,645 (1) For the three months ended March 31, 2023, income from operations included value-added-tax expense of $6.0 million related to prior periods, of which $4.3 million was associated with the back-up care segment and $1.7 million was associated with the full service center-based child care segment. Refer to Note 1, Organization and Basis of Presentation , for additional information. |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 3 Months Ended | ||
Mar. 31, 2024 USD ($) center shares | Mar. 31, 2023 USD ($) | Dec. 16, 2021 USD ($) | |
Organization And Basis Of Presentation [Line Items] | |||
Number of childcare and early education centers operated | center | 1,044 | ||
Stock repurchase program, authorized amount | $ 400,000,000 | ||
Stock repurchased (in shares) | shares | 0 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 198,300,000 | ||
Governmental assistance, reduction to cost of services | $ 21,600,000 | ||
Reduction of operating subsidies for the related child care centers | 7,400,000 | ||
Revenue recognized | 169,300,000 | 140,800,000 | |
Value-Added Tax Incurred In Prior Periods | |||
Organization And Basis Of Presentation [Line Items] | |||
Occupancy costs | $ 6,000,000 | ||
Full service center-based child care | Value-Added Tax Incurred In Prior Periods | Cost of Sales | |||
Organization And Basis Of Presentation [Line Items] | |||
Occupancy costs | 4,300,000 | ||
Full service center-based child care | Value-Added Tax Incurred In Prior Periods | Selling, General and Administrative Expenses | |||
Organization And Basis Of Presentation [Line Items] | |||
Occupancy costs | 1,700,000 | ||
Tuition Support | |||
Organization And Basis Of Presentation [Line Items] | |||
Revenue recognized | $ 600,000 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 622,709 | $ 553,606 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 448,011 | 400,489 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 174,698 | 153,117 |
Full service center-based child care | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 483,640 | 430,191 |
Full service center-based child care | North America | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 320,203 | 284,584 |
Full service center-based child care | International | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 163,437 | 145,607 |
Back-up care | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 114,672 | 99,130 |
Back-up care | North America | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 103,411 | 91,620 |
Back-up care | International | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 11,261 | 7,510 |
Educational advisory services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,397 | 24,285 |
Educational advisory services | North America | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,397 | 24,285 |
Educational advisory services | International | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 0 | $ 0 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 169.3 | $ 140.8 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Lessee, Lease, Description [Line Items] | |
Total fixed payment obligations for operating lease not yet commenced | $ 14.8 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 10 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 15 years |
Operating lease not yet commenced term | 15 years |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating lease expense | $ 37,731 | $ 37,968 |
Variable lease expense | 10,771 | 11,175 |
Total lease expense | $ 48,502 | $ 49,143 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Discount Rate (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 10 years | 10 years |
Weighted average discount rate | 7.10% | 7.10% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Remainder of 2024 | $ 108,275 | |
2025 | 151,673 | |
2026 | 145,496 | |
2027 | 136,311 | |
2028 | 125,397 | |
Thereafter | 588,310 | |
Total lease payments | 1,255,462 | |
Less imputed interest | (366,799) | |
Present value of lease liabilities | 888,663 | |
Less current portion of operating lease liabilities | (99,769) | $ (100,387) |
Long-term operating lease liabilities | $ 788,894 | $ 796,701 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2024 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) center transaction | Jul. 01, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Payments to acquire business, net of cash acquired | $ 2,503 | $ 121 | |||
Goodwill | 1,771,412 | $ 1,786,405 | |||
Contingent consideration paid | 97,653 | $ 225 | |||
Number of business acquisition transactions | transaction | 5 | ||||
2024 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business, net of cash acquired | $ 2,500 | ||||
Finite-lived intangible assets acquired | $ 400 | ||||
Finite-lived intangible assets amortization period | 4 years | ||||
2024 Acquisitions | Full service center-based child care | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 2,300 | ||||
2024 Acquisitions | Australia | |||||
Business Acquisition [Line Items] | |||||
Number of centers acquired | center | 1 | ||||
Only About Children | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration paid | $ 106,500 | ||||
Contingent consideration recorded | $ 97,700 | ||||
2023 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business, net of cash acquired | $ 39,500 | ||||
Finite-lived intangible assets acquired | $ 4,000 | ||||
Finite-lived intangible assets amortization period | 4 years | ||||
Business combination acquisition term | 1 year | ||||
2023 Acquisitions | Full service center-based child care | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 37,200 | ||||
Amount of goodwill expected to be deductible for tax purposes | $ 25,500 | ||||
2023 Acquisitions | Australia | |||||
Business Acquisition [Line Items] | |||||
Number of centers acquired | center | 6 | ||||
2023 Acquisitions | United States | |||||
Business Acquisition [Line Items] | |||||
Number of centers acquired | center | 4 | ||||
2021 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration paid | $ 200 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,786,405 |
Additions from acquisitions | 2,342 |
Adjustments to prior year acquisitions | (25) |
Effect of foreign currency translation | (17,310) |
Ending balance | 1,771,412 |
Full service center-based child care | |
Goodwill [Roll Forward] | |
Beginning balance | 1,539,264 |
Additions from acquisitions | 2,342 |
Adjustments to prior year acquisitions | (25) |
Effect of foreign currency translation | (17,103) |
Ending balance | 1,524,478 |
Back-up care | |
Goodwill [Roll Forward] | |
Beginning balance | 209,465 |
Additions from acquisitions | 0 |
Adjustments to prior year acquisitions | 0 |
Effect of foreign currency translation | (207) |
Ending balance | 209,258 |
Educational advisory services | |
Goodwill [Roll Forward] | |
Beginning balance | 37,676 |
Additions from acquisitions | 0 |
Adjustments to prior year acquisitions | 0 |
Effect of foreign currency translation | 0 |
Ending balance | $ 37,676 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Definite-lived intangible assets: | ||
Cost | $ 415,571 | $ 416,743 |
Accumulated amortization | (387,676) | (380,758) |
Net carrying amount | 27,895 | 35,985 |
Intangible Assets: | ||
Cost | 596,106 | 597,334 |
Accumulated amortization | (387,676) | (380,758) |
Net carrying amount | 208,430 | 216,576 |
Trade names | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets: | $ 180,535 | $ 180,591 |
Customer relationships | ||
Definite-lived intangible assets: | ||
Weighted average amortization period | 10 years | 11 years |
Cost | $ 396,326 | $ 397,079 |
Accumulated amortization | (375,686) | (368,963) |
Net carrying amount | 20,640 | 28,116 |
Intangible Assets: | ||
Accumulated amortization | $ (375,686) | $ (368,963) |
Trade names | ||
Definite-lived intangible assets: | ||
Weighted average amortization period | 10 years | 10 years |
Cost | $ 19,245 | $ 19,664 |
Accumulated amortization | (11,990) | (11,795) |
Net carrying amount | 7,255 | 7,869 |
Intangible Assets: | ||
Accumulated amortization | $ (11,990) | $ (11,795) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Estimated Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2024 | $ 10,305 | |
2025 | 5,863 | |
2026 | 4,097 | |
2027 | 2,937 | |
2028 | 1,606 | |
Thereafter | 3,087 | |
Net carrying amount | $ 27,895 | $ 35,985 |
CREDIT ARRANGEMENTS AND DEBT _3
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Senior Secured Credit Facilities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Contingent consideration paid | $ 97,653,000 | $ 225,000 | ||
Only About Children | ||||
Debt Instrument [Line Items] | ||||
Contingent consideration paid | $ 106,500,000 | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate for the term loans | 7.50% | 7.52% | ||
Weighted average interest rate | 7.51% | 6.67% | ||
Line of Credit | Term loan B | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 600,000,000 | |||
Debt instrument, term | 7 years | |||
Percentage of periodic payment | 1% | |||
Basis spread on variable rate | 1.25% | |||
Debt instrument, interest rate, stated percentage | 2.25% | |||
Line of Credit | Term loan B | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Line of Credit | Term loan B | SOFR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Line of Credit | Term loan A | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 400,000,000 | |||
Debt instrument, term | 5 years | |||
Line of Credit | Term loan A | Quarterly Payment Rate for First Three Years | ||||
Debt Instrument [Line Items] | ||||
Percentage of periodic payment | 2.50% | |||
Line of Credit | Term loan A | Payment Rate in Year Four | ||||
Debt Instrument [Line Items] | ||||
Percentage of periodic payment | 5% | |||
Line of Credit | Term loan A | Payment Rate in Year Five | ||||
Debt Instrument [Line Items] | ||||
Percentage of periodic payment | 7.50% | |||
Line of Credit | Term loan A | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Line of Credit | Term loan A | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
Line of Credit | Term loan A | SOFR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Line of Credit | Term loan A | SOFR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Line of Credit | Term loan A | Base Rate, Floor Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1% | |||
Line of Credit | Term loan A | SOFR Floor | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 400,000,000 | |||
Weighted average interest rate | 7.62% | 6.76% | ||
Borrowing outstanding under revolving credit facility | $ 0 | $ 0 | ||
Letters of credit outstanding | 10,200,000 | 19,300,000 | ||
Remaining borrowing capacity | $ 389,800,000 | $ 380,700,000 | ||
Net leverage ratio | 4.25 | |||
Revolving Credit Facility | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Revolving Credit Facility | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
Revolving Credit Facility | SOFR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Revolving Credit Facility | SOFR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Revolving Credit Facility | Base Rate, Floor Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1% | |||
Revolving Credit Facility | SOFR Floor | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0% |
CREDIT ARRANGEMENTS AND DEBT _4
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Outstanding Borrowing (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule Of Borrowings [Line Items] | ||
Less current maturities | $ (21,000) | $ (18,500) |
Long-term debt | 938,060 | 944,264 |
Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Deferred financing costs and original issue discount | (4,940) | (5,236) |
Total debt | 959,060 | 962,764 |
Less current maturities | (21,000) | (18,500) |
Long-term debt | 938,060 | 944,264 |
Term loan B | Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Term loan | 586,500 | 588,000 |
Term loan A | Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Term loan | $ 377,500 | $ 380,000 |
CREDIT ARRANGEMENTS AND DEBT _5
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Future Principal Payments Under New Term Loan (Details) - Secured Debt $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Instrument [Line Items] | |
Remainder of 2024 | $ 14,500 |
2025 | 28,500 |
2026 | 351,000 |
2027 | 6,000 |
2028 | 564,000 |
Total future principal payments | $ 964,000 |
CREDIT ARRANGEMENTS AND DEBT _6
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Derivative Financial Instruments Narrative (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2021 | Jun. 30, 2020 |
Derivatives, Fair Value [Line Items] | |||
Net gain to be reclassified from accumulated other comprehensive loss and recorded to interest expense during the next twelve months | $ 18,000,000 | ||
Interest rate caps | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, notional amount | $ 900,000,000 | $ 800,000,000 | |
Interest rate caps | SOFR | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate cap agreement, threshold for interest rate protection | 0.90% | ||
Interest rate caps | October 31, 2023 | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, notional amount | $ 300,000,000 | ||
Interest rate caps | October 31, 2023 | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, notional amount | $ 500,000,000 | ||
Interest rate caps | October 31, 2025 | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, notional amount | $ 600,000,000 | ||
Interest rate caps | October 31, 2025 | SOFR | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate cap agreement, threshold for interest rate protection | 2.40% | ||
Interest rate caps | October 31, 2026 | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, notional amount | $ 300,000,000 | ||
Interest rate caps | October 31, 2026 | SOFR | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate cap agreement, threshold for interest rate protection | 2.90% |
CREDIT ARRANGEMENTS AND DEBT _7
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Schedule of Derivatives by Balance Sheet Location (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Interest rate caps | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate caps - asset | $ 31,757 | $ 28,968 |
CREDIT ARRANGEMENTS AND DEBT _8
CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS - Effect of Derivatives on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivatives, Fair Value [Line Items] | ||
Cash flow hedges | $ (13,681) | $ (12,916) |
Income tax effect | 9,267 | 9,603 |
Net of income taxes | 16,989 | 8,126 |
Other comprehensive income (loss) before reclassifications — net of tax | Amount of gain (loss) recognized in other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Net of income taxes | 6,603 | (3,859) |
Other comprehensive income (loss) before reclassifications — net of tax | Amount of net gain (loss) reclassified into earnings | ||
Derivatives, Fair Value [Line Items] | ||
Net of income taxes | 4,216 | 5,113 |
Other comprehensive income (loss) before reclassifications — net of tax | Total effect on other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Net of income taxes | 2,387 | (8,972) |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Amount of gain (loss) recognized in other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow hedges | 9,008 | (5,264) |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Amount of net gain (loss) reclassified into earnings | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow hedges | 5,751 | 6,976 |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Total effect on other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow hedges | 3,257 | (12,240) |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Amount of gain (loss) recognized in other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Income tax effect | (2,405) | 1,405 |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Amount of net gain (loss) reclassified into earnings | ||
Derivatives, Fair Value [Line Items] | ||
Income tax effect | (1,535) | (1,863) |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Total effect on other comprehensive income (loss) | ||
Derivatives, Fair Value [Line Items] | ||
Income tax effect | $ (870) | $ 3,268 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income | $ 16,989 | $ 8,126 |
Allocation of net income to common stockholders: | ||
Common stock | 16,989 | 8,098 |
Unvested participating shares | 0 | 28 |
Net income | $ 16,989 | $ 8,126 |
Weighted average common shares outstanding: | ||
Weighted average number of common shares (in shares) | 57,878,401 | 57,603,866 |
Earnings per common share: | ||
Common stock (in dollars per share) | $ 0.29 | $ 0.14 |
Unvested participating shares | ||
Weighted average common shares outstanding: | ||
Weighted average number of common shares (in shares) | 94,158 | 202,749 |
EARNINGS PER SHARE - Computat_2
EARNINGS PER SHARE - Computation of Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Earnings allocated to common stock | $ 16,989 | $ 8,098 |
Plus: earnings allocated to unvested participating shares | 0 | 28 |
Less: adjusted earnings allocated to unvested participating shares | 0 | (28) |
Earnings allocated to common stock | $ 16,989 | $ 8,098 |
Weighted average common shares outstanding: | ||
Common stock (in shares) | 57,878,401 | 57,603,866 |
Effect of dilutive securities (in shares) | 432,004 | 106,043 |
Weighted average common shares outstanding — diluted (in shares) | 58,310,405 | 57,709,909 |
Earnings per common share: | ||
Common stock (in dollars per share) | $ 0.29 | $ 0.14 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Common Stock | Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options outstanding to purchase shares of common stock excluded from diluted earnings per share (in shares) | 1.6 | 2 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rates | 35.30% | 54.20% | |
Increase (decrease) tax, share-based compensation expense | $ 0.7 | $ 2.1 | |
Effective income tax rate prior to the inclusion of excess tax benefit and other discrete items (percent) | 28% | 30% | |
Unrecognized tax benefits, including interest | $ 4.7 | $ 4.6 | |
Change in uncertain tax positions | $ 4.3 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Measurements Disclosure [Line Items] | |||
Available-for-sale debt securities fair value | $ 34,900 | $ 23,900 | |
Available-for-sale debt securities amortized cost | 34,400 | 24,000 | |
Contingent consideration | |||
Fair Value Measurements Disclosure [Line Items] | |||
Contingent consideration liability | $ 14,336 | 11,516 | |
Settlement of contingent consideration liabilities | $ 200 | ||
Minimum | |||
Fair Value Measurements Disclosure [Line Items] | |||
Debt securities, remaining maturity term | 1 year | ||
Maximum | |||
Fair Value Measurements Disclosure [Line Items] | |||
Debt securities, remaining maturity term | 10 years | ||
Prepaid and other current assets | |||
Fair Value Measurements Disclosure [Line Items] | |||
Available-for-sale debt securities fair value | $ 13,700 | 22,000 | |
Other assets | |||
Fair Value Measurements Disclosure [Line Items] | |||
Available-for-sale debt securities fair value | 21,200 | 1,900 | |
Interest rate caps | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | |||
Fair Value Measurements Disclosure [Line Items] | |||
Derivative asset | $ 31,800 | $ 29,000 |
FAIR VALUE MEASUREMENTS - Roll
FAIR VALUE MEASUREMENTS - Roll Forward of Recurring Level 3 Fair Value Measurements (Details) - Contingent consideration - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Business Combination, Contingent Consideration, Liability [Roll Forward] | ||
Beginning balance | $ 11,516 | |
Settlement of contingent consideration liabilities | $ (200) | |
Changes in fair value | 2,820 | |
Ending balance | $ 14,336 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,212,676 | $ 1,080,453 |
Other comprehensive income (loss) before reclassifications — net of tax | (13,697) | 3,080 |
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 4,211 | 5,099 |
Total other comprehensive loss | (17,908) | (2,019) |
Ending balance | 1,229,269 | 1,103,443 |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (59,101) | (70,629) |
Total other comprehensive loss | (17,908) | (2,019) |
Ending balance | (77,009) | (72,648) |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (76,130) | (105,138) |
Other comprehensive income (loss) before reclassifications — net of tax | (20,319) | 6,880 |
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 0 | 0 |
Total other comprehensive loss | (20,319) | 6,880 |
Ending balance | (96,449) | (98,258) |
Unrealized gain (loss) on cash flow hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 17,100 | 34,738 |
Other comprehensive income (loss) before reclassifications — net of tax | 6,603 | (3,859) |
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 4,216 | 5,113 |
Total other comprehensive loss | 2,387 | (8,972) |
Ending balance | 19,487 | 25,766 |
Unrealized gain (loss) on investments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (71) | (229) |
Other comprehensive income (loss) before reclassifications — net of tax | 19 | 59 |
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | (5) | (14) |
Total other comprehensive loss | 24 | 73 |
Ending balance | $ (47) | $ (156) |
SEGMENT INFORMATION - Income fr
SEGMENT INFORMATION - Income from Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 622,709 | $ 553,606 |
Income (loss) from operations | 39,937 | 30,645 |
Value-Added Tax Incurred In Prior Periods | ||
Segment Reporting Information [Line Items] | ||
Occupancy costs | 6,000 | |
Full service center-based child care | ||
Segment Reporting Information [Line Items] | ||
Acquisition related costs | 6,000 | |
Full service center-based child care | Value-Added Tax Incurred In Prior Periods | Cost of Sales | ||
Segment Reporting Information [Line Items] | ||
Occupancy costs | 4,300 | |
Full service center-based child care | Value-Added Tax Incurred In Prior Periods | Selling, General and Administrative Expenses | ||
Segment Reporting Information [Line Items] | ||
Occupancy costs | 1,700 | |
Full service center-based child care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 483,640 | 430,191 |
Income (loss) from operations | 21,444 | 8,433 |
Back-up care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 114,672 | 99,130 |
Income (loss) from operations | 15,983 | 17,773 |
Educational advisory services | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 24,397 | 24,285 |
Income (loss) from operations | $ 2,510 | $ 4,439 |