Learning Care Group More Than Doubles Net Income, Improves Margins for First Quarter of Fiscal 2006
02 September 2005 - 6:48AM
Business Wire
Learning Care Group, Inc. (NASDAQ:LCGI), a leading provider of
early child care and education services, today announced operating
results for the 16 weeks (first quarter 2006) ended July 22, 2005.
Highlights for the quarter included an increase in net income of
118%, as well as improved margins. "We are excited to report today
a significant increase in net income at Learning Care Group, more
than doubling results reported during the same period last year,"
announced Bill Davis, President and Chief Executive Officer. "The
positive results from this quarter are reflective of Company-wide
initiatives to continue corporate growth, while fulfilling our
mission to impact and inspire life-long learning." Revenue for
first quarter 2006 increased $5.0 million, or 7.8%, from the same
period last year to $70.0 million. Childtime Learning Centers
revenue increased $2.7 million, with comparable (centers open 18
months or longer) Childtime center revenue increasing 6.1%. Tutor
Time Learning Centers revenue increased $2.2 million, with
comparable Tutor Time center revenue increasing 5.8%. Comparable
Learning Center revenues were achieved through a combination of
increased tuition rates (approximately 3%) and enrollments
(approximately 3%). Franchise Operations revenue increased $0.2
million, or 7.9%, from the same period last year to $2.5 million.
Tutor Time franchisee-owned centers reported revenue of $44.7
million for the quarter, an increase of 8.8% from the same period
last year, with comparable center revenue increasing 11.1% for the
quarter. First quarter 2006 systemwide revenue, which include
revenues from franchisee-owned and company-owned centers, grew to
$112.2 million, an increase of 8.2% from the same period last year.
"Improvements to the Company's Franchise Operations revenue this
quarter primarily came as a result of royalties generated from the
revenue increases experienced by Tutor Time franchisees, and
secondarily through franchise fees for newly opened centers,"
explained Davis. "By purposefully directing resources to support
current franchisees, as well as to develop and capitalize new
leads, the Company is creating an environment poised for continued
growth. We have been very successful in building a platform for
ongoing franchise development. We have signed 11 new franchisees
since April, 2005." Gross profit for first quarter 2006 increased
$2.3 million, or 25.8%, from the same period last year to $11.5
million. This increase consisted of a $2.1 million increase in
Learning Center Operations gross profit and a $0.2 million increase
in Franchise Operations gross profit. Gross profit was 16.4% of
revenues for first quarter 2006 compared to 14.0% for the same
period last year. The increase in Learning Center gross profit was
a result of increased revenues and improved labor efficiencies; a
decrease in center level operating expenses as a percentage of
revenue, resulting from improved food costs; and a decrease in
occupancy costs as a percentage of revenue, resulting from
increased revenues. The increase in Franchise Operations gross
profit was the result of increased revenue. Operating income for
first quarter 2006 increased $1.3 million from the same period last
year to $2.9 million. The improvement was primarily attributable to
increased gross profit ($2.3 million), offset by a gain on the sale
of assets occurring in the previous year ($0.5 million) increased
general and administrative expenses ($0.3 million) and an increase
in provision for doubtful accounts ($0.2 million). Net income
improved to $2.1 million for first quarter 2006, compared to $1.0
million for the same period last year. The improvement was
primarily attributable to increased operating income of $1.3
million partially offset by discontinued operations, net of taxes
($0.2 million). First quarter 2006 net income per share was $0.11
and $0.10 on a basic and diluted basis, respectively, as compared
to net income of $0.05 on a basic and diluted basis for the same
period last year. "Learning Care Group's operating and financial
initiatives, aided by the improved economy, have lead to increased
enrollments and improved cost management, resulting in a gross
profit improvement of 2.4% of revenue. Additionally, the Company
was able to more than double net income for the quarter, even with
a $0.5 million reduction in gain on disposal of assets," detailed
Davis. "Our plan is to continue to improve our utilization, which
stood at 63.9% of licensed capacity for the quarter. We are
confident our continued focus on innovation and teamwork, and
superior customer service will help support continued growth
throughout this fiscal year and well into the future." -0- *T
Selected Income Statement Data (Unaudited) ($ in thousands, except
per share data)
======================================================================
16 Weeks Ended
======================================================================
July 22, 2005 July 23, 2004 -------------------------------
----------------- -------------------- Revenue $ 69,972 $ 64,933
------------------------------- -----------------
-------------------- Gross profit $ 11,451 $ 9,103
------------------------------- -----------------
-------------------- Operating income $ 2,904 $ 1,649
------------------------------- -----------------
-------------------- Net income $ 2,092 $ 957
------------------------------- -----------------
-------------------- Basic net income per share $ 0.11 $ 0.05
------------------------------- ------------------
------------------- Diluted net income per share $ 0.10 $ 0.05
======================================================================
Selected Balance Sheet Data (Unaudited) (in thousands)
======================================================================
July 22, 2005 April 2, 2004 ---------------------------------
------------------ ----------------- Total Current Assets $14,660
$15,771 --------------------------------- ------------------
----------------- Total Assets $85,883 $87,357
--------------------------------- ------------------
----------------- Total Current Liabilities $24,124 $25,126
--------------------------------- ------------------
----------------- Total Liabilities $43,427 $47,023
--------------------------------- ------------------
----------------- Shareholders' Equity $42,456 $40,334
======================================================================
*T About Learning Care Group, Inc. Learning Care Group, Inc. is the
parent company of Tutor Time Child Care/Learning Centers and
Childtime Learning Centers. As one of the nation's premier child
care providers, the Company has grown into a network of 460
centers, including operations in 25 states and internationally. For
more information on the Learning Care Group please call
248-697-9000 or visit www.learningcaregroup.com. Statements
included herein that are not historical facts are forward-looking
statements pursuant to the safe harbor provisions of the
Private/Securities Litigation Reform Act of 1995. Forward-looking
statements, including beliefs of future profitability, involve a
number of risks and uncertainties, including, but not limited to,
continuation of federal and state assistance programs, demand for
child care as well as general economic conditions, pricing and
competition. Accordingly, actual results could differ materially
from those projected in such forward-looking statements.
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