CALGARY, May 17, 2012 /CNW/ - Edleun Group, Inc. ("Edleun" or the
"Company") , the leading provider of quality early childhood
education and care in Canada, announced today its operational and
financial results for the three months ended March 31, 2012 while
continuing to grow its portfolio at a strong pace to 46 centres
representing more than 4,900 child care spaces. Highlights for the
first quarter ended March 31, 2012 include: -- More than a twofold
increase in the number of licensed child care spaces in service in
the first quarter 2012 compared to the same quarter in 2011 -- from
1,833 spaces to 3,908 spaces and 1,031 under development; --
Recorded a 129% increase in revenue in the first quarter of 2012
over the first quarter of the prior year; -- Reported the Company's
highest quarterly Adjusted Funds From Operations ("AFFO" is the
Company's principal measure of profitability) in corporate history
of $789,000; a sequential quarterly increase of 274%; -- On a per
share basis, AFFO increased to $0.007 in 2012's first quarter from
$0.001 in 2011's first quarter and $0.002 in the preceding quarter;
-- For "same centres" in operation during both the current and the
prior year's first quarter: o occupancy increased from 80% to 88% o
revenues increased by 16% and o centre margin (in dollars)
increased 22% -- Acquisition of a seventh Ontario centre located in
Oakville, Ontario for $800,000, adding 199 spaces; -- Acquisition
of an eighth Ontario centre located in Burlington, Ontario for
$425,000, providing 49 spaces and potential for further expansion;
-- Commenced the development process for the Company's third
greenfield child care centre located in the Seton area of Calgary;
and -- Entering into an agreement with Canadian Apartment
Properties Real Estate Investment Trust ("CAPREIT"), one of
Canada's largest rental apartment owners, to locate child care
centres in selected CAPREIT properties. Highlights for the period
subsequent to quarter end include: -- Completion of the
re-development of the Highland Park Learning Centre in Calgary and
commencement of operations, adding 75 licensed child care spaces to
the Company's portfolio; -- Completion of re-development of the
Lawrence Learning Centre in Kelowna, British Columbia with
operations expected to commence in the second quarter, adding 150
licensed child care spaces to the Company's portfolio; -- Handover
of the Lake Chestermere Learning Centre from the construction
contractor with operations expected to commence in July 2012,
adding 247 licensed spaces to the Company's portfolio. "In the
first quarter we continued to take further advantage of acquisition
opportunities in Ontario while substantially advancing the first in
a series of redevelopment initiatives," said Ty Durekas, Chief
Executive Officer of Edleun. "Our focus in the near term remains on
bringing additional spaces to the portfolio through a combination
of opening four new development and redevelopment centres and
executing on our robust acquisition pipeline. Our new centres under
development continue to enjoy favourable pre-enrolment rates at
virtually every age level which should support solid initial
occupancy levels." "Our record results demonstrate the impact of
momentum from acquisition activity," said Dale Kearns, President of
Edleun. "We can expect a further increase in cash flow from
planned future acquisitions to be funded from current financial
resources of $22 million, as well as development properties that
are nearing completion and will be on stream as early as next
quarter. These development and redevelopment properties add 719
licensed spaces and will continue to support meaningful short and
longer term growth. The existing portfolio has generated
meaningful increases in performance, including same centre results,
which have contributed to solid revenue and AFFO growth this
quarter." Financial Review Three months ended March 31, 2012 First
quarter revenue was $8.0 million, a 129% increase over the same
period a year earlier and a 37% increase on a sequential basis
compared to the fourth quarter of 2011. Same centre revenue
increased by 16% when compared with the same three month period in
fiscal 2011. Revenues for the first quarter of 2012 were
higher than revenues for the same period in 2011 due to an increase
in the number of centres (from 20 to 39, excluding one centre
acquired on March 31, 2012) and same centre growth within the
centre portfolio. Portfolio centre margin (see Non-IFRS Performance
Measures below for centre margin definition) for the first quarter
of 2012 was $1,343,000 or 112% higher than the same period of 2011.
Portfolio centre margin as a percentage of revenue was 31% in 2012
versus 34% in 2011. The decrease in centre margins as a percentage
of revenue is largely due to lower centre margins realized in the
British Columbia centres acquired in the second quarter of 2011.
Same centre margins increased from 34% to 36% year over year.
($000) except Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 per 2012 2011 2011 2011 2011
2010 2010 2010 share and (47-day centre period) statistics Revenue
$ 8,030 $ 5,840 $ 4,877 $ 3,958 $ 3,502 $ 3,124 $ 2,270 $ 867
Centre margin 2,537 1,841 1,406 1,286 1,194 1,005 616 273 Centre
margin 31 31 29 32 34 32 27 31 % Net loss(2) (731) (811) (957)
(541) (249) (678) (896) (1,724) FFO 604 119 (314) (22) 71 (193)
(564) (1,445) AFFO 789 211 (329) 100 136 (61) (432) (206) Per share
amounts: Net loss (0.006) (0.007) (0.008) (0.006) (0.003) (0.007)
(0.009) (0.033) FFO 0.005 0.001 (0.003) (0.002) 0.001 (0.002)
(0.006) (0.028) AFFO 0.007 0.002 (0.003) 0.001 0.001 (0.008)
(0.005) (0.004) Cash 3,803 1,911 18,026 24,270 7,035 8,662 12,856
22,769 Available 18,626 22,100 24,800 24,800 24,800 - - - under
credit facility # of centres 40 38 29 22 20 20 17 11 in operation #
of centres 6 5 3 2 1 - - - under development or redevelopment
Licensed 3,908 3,660 2,539 2,038 1,833 1,815 1,527 1,061 spaces in
operation Spaces under 1,031 803 569 494 247 - - - development or
redevelopment Note: Net income for 2010 restated to reflect IFRS
AFFO (see Non-IFRS Performance Measures below for AFFO and FFO
definitions) for the first quarter of 2012 was $789,000 compared to
$211,000 in the fourth quarter of 2011 and $136,000 for the first
quarter of 2011. It is noteworthy that AFFO has generally
improved each quarter since commencement of the Company's
operations primarily as a result of: (i) growth in the portfolio of
centres; (ii) improved performance in same centre operations, and
(iii) offset in part by lower summer occupancy and the impact of
seasonal maintenance capital expenditures. Additionally, higher
levels of general and administrative costs as a result of the
increase in the size of the portfolio have been incurred.
AFFO per share for the first quarter of 2012 was $0.007 compared to
$0.002 for the fourth quarter of 2011 and $0.001 for the first
quarter of 2011. Funds from Operations ("FFO") for first quarter of
2012 was $604,000 compared to $119,000 for the fourth quarter of
2011 and $71,000 for the first quarter of 2011, the trends being
substantially the same as AFFO. FFO per share for the first quarter
of 2012 was $0.005 compared with $0.001 for the fourth quarter of
2011 and $0.001 for the first quarter of 2011. ($000) Q1 2012
Q42011 Q3 2011 Q22011 Q1 2011 Net loss for the period $ (731) $
(810) $ (957) $ (541) $ (249) Depreciation and certain other 459
325 313 238 205 non cash items Acquisition costs 876 605 330 281
115 FFO $ 604 $ 119 $ (314) $ (22) $ 71 Stock based compensation -
196 104 69 166 96 option grants Maintenance capital (11) (12) (84)
(44) (31) expenditures AFFO $ 789 $ 211 $ (329) $ 100 $ 136 Net
loss for the first quarter of 2012 was $731,000 ($0.006 per share)
compared with a net loss of $249,000 ($0.003 per share) in the
first quarter of 2011. Factors contributing to the net loss
included higher general and administrative expense of $1,358,000
compared with $934,000 during the first quarter of 2011 and higher
business acquisition costs of $876,000 compared with $115,000
during the first quarter of the prior year. Under IFRS, acquisition
costs, which are clearly critical to a business strategy involving
consolidation of the Canadian child care business through
acquisitions and development, must be expensed in the quarter in
which they are incurred. During the first quarter of 2012 the
Company incurred $478,000 and $63,000 of non-recurring costs
related to reorganization of internal services in property
acquisition costs and general and administrative expenses,
respectively. The Company's balance sheet remains very strong with
minimal debt. At March 31, 2012, the Company had cash and cash
equivalents of $3.8 million. Under its $25 million credit facility
the Company has $18.6 million of available capital, which together
with funds on hand provides $22.4 million available for working
capital, acquisitions and development initiatives. Outlook During
2011 the Company nearly doubled its size by acquiring 18 child care
centres and expanding its presence beyond Alberta into British
Columbia, with the purchase of seven child care centres, and
Ontario, with the purchase of six child care centres. Half of the
2011 acquisitions occurred in the fourth quarter, including the
three centres acquired in Calgary in November and the initial six
Ontario acquisitions in mid-December. Consequently, these nine
acquisitions, adding 1,121 licensed child care spaces to the
Company's portfolio, only began to have a meaningful impact on the
Company's financial performance in the first quarter of 2012. These
acquisitions are expected to provide a full year of operations
benefitting the Company's financial performance in 2012. In
addition, the Company acquired two Ontario centres late in Q1 2012,
the full financial benefit of which will accrue to the Company
going forward. The Company continues to have a substantial pipeline
of opportunity for acquisitions and development and anticipates
announcements related thereto in the near term. In total, the
addition of 719 spaces as a result of the completion of the four
development/redevelopment centres subsequent to March 31, 2012 will
begin to have a material impact on the balance of 2012 and 2013 as
they represent 19% more spaces than those online as at March 31,
2012. Additionally, with its solid balance sheet and low debt
levels, the Company has access to substantial non dilutive capital
to execute is pipeline of accretive acquisitions and new
development initiatives in subsequent quarters of 2012. Details of
Annual General and Special Meeting of Shareholders The Company is
holding its Annual General and Special Meeting of Shareholders at
the Sheraton Centre Toronto, 123 Queen Street West, Conference
Rooms D&E, on Thursday, May 24, 2012 at 4:15 pm. Non IFRS
Performance Measures The Company's business, which is oriented
toward the acquisition and development of child care centres and
includes the ownership of a significant portfolio of real estate,
reports net income that includes deduction for acquisition costs
and non-cash charges such as depreciation and stock based
compensation expense. Reflecting these factors and consistent with
the practice of the Canadian real estate industry, the Company
focuses on FFO and AFFO as key financial metrics to measure and
compare operating performance. FFO and AFFO do not have
standardized meanings prescribed by IFRS. The Company's
method of calculating FFO and AFFO may be different from other
entities and, accordingly, may not be comparable to such other
entities. FFO and AFFO: (i) do not represent cash flow from
operating activities as defined by IFRS; (ii) are not indicative of
cash available to fund all liquidity requirements, including
capital for growth; and (iii) are not to be considered as
alternatives to IFRS based net income for the purpose of evaluating
operating performance. The Company uses "centre margin" as a
performance indicator of child care centre operating results.
Centre margin does not have a standardized meaning prescribed by
IFRS and therefore may not be comparable with the calculation of
similar measures by other entities. Centre margin is
determined by deducting centre expenses from revenue. Centre
expenses exclude net rents due under leases for leasehold
properties and mortgage interest, if any, on those properties owned
by the Company. Net income / loss is impacted by, among other
items, accounting standards that require child care centre
acquisition and transaction costs to be expensed as incurred.
As the Company executes its consolidation and development strategy
in the Canadian child care market, it will routinely incur such
expenses which will negatively impact the Company's reported net
income / loss, but not FFO and AFFO. Conference Call Edleun Group
Inc. will hold a conference call on Tuesday May 22 at 4:30 pm
Eastern Time, to discuss the results of the first quarter of fiscal
2012. The Company's full Financial Statements and Management's
Discussion and Analysis will be available on SEDAR at
www.sedar.com. To access the conference call by telephone, dial
(647) 427-7450 or 1-888-231-8191. Please connect approximately 10
minutes prior to the beginning of the call. The conference call
will be archived for replay until Tuesday, May 29, 2012, at
midnight. To access the archived conference call, dial (416)
849-0833 or 1-855-859-2056 and enter the reservation number
82117022 followed by the number sign. A live audio webcast of the
conference call will be available at:
http://www.newswire.ca/en/webcast/detail/974429/1047717. Please
connect at least 10 minutes prior to the conference call to ensure
adequate time for any software download that may be required to
join the webcast. The webcast will be archived at the above website
for 90 days. About Edleun Group Inc. Edleun is the leading provider
of high-quality, community-based Early Learning & Care child
care centres in Canada offering early education and child care
services to children ages six weeks to 13 years. Edleun is
committed to preparing children for the next step in their
education and life, offering families and employers access to and
choice of quality early childhood education programs, as well as
enhanced opportunities and career advancement for Early Childhood
Educators. Publicly traded on the Toronto Stock Exchange , the
Company's objectives include the acquisition and subsequent
improvement of existing child care centres and developing new
state-of-the-art Early Learning and Care Centres in underserved
Canadian communities. The Company currently has a total 46 centres
in its portfolio including: 41 centres in operation and five in
various stages of development or redevelopment representing 4,939
licensed child care spaces. Forward-Looking Statements Certain
statements in this Release which are not historical facts may
constitute forward-looking statements or forward-looking
information within the meaning of applicable securities laws
("forward-looking statements"). Any statements related to Edleun's
projected revenues, earnings, growth rates, revenue mix, staffing
and resources, and product plans are forward looking statements as
are any statements relating to future events, conditions or
circumstances. The use of terms such as "believes", "anticipated",
"expected", "projected", "targeting", "estimate", "intend" and
similar terms are intended to assist in identification of these
forward-looking statements. Readers are cautioned not to place
undue reliance upon any such forward-looking statements. Such
forward-looking statements are not promises or guarantees of future
performance and involve both known and unknown risks and
uncertainties that may cause the actual results, performance,
achievements or developments of Edleun to differ materially from
the results, performance, achievements or developments expressed or
implied by such forward-looking statements. Forward-looking
statements are based on management's current plans, estimates,
projections, beliefs and opinions. Except as required by law,
Edleun does not undertake any obligation to update forward-looking
statements should assumptions related to these plans, estimates,
projections, beliefs and opinions change. The Company undertakes no
obligation, except as required by law, to update publicly or
otherwise any forward-looking information, whether as a result of
new information, future events or otherwise, or the above list of
factors affecting this information. Many factors could cause the
actual results of Edleun to differ materially from the results,
performance, achievements or developments expressed or implied by
such forward-looking statements. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Condensed Consolidated
Statements of Financial Position (CDN $000's) March 31, 2012
December 31, 2011 Assets Non-current assets Property and equipment
$ 38,562 $ 33,434 Goodwill 23,439 22,940 Definite life intangible
assets 283 340 62,284 56,714 Current assets Cash and cash
equivalents 3,803 1,911 Accounts receivable 1,825 1,589 Prepaid and
other expenses 3,726 3,606 Short term investments 39 39 9,393 7,145
Total Assets $ 71,677 $ 63,859 Liabilities Non-current liabilities
Debt and financing leases $ 6,805 $ 2,260 Deferred tax liability 42
42 6,847 2,302 Current liabilities Accounts payable and accrued
4,022 2,877 liabilities Deferred revenue 592 399 Debt and financing
leases 220 - 4,834 3,276 Total Liabilities 11,681 5,578
Shareholders' Equity Share capital 65,593 62,931 Equity settled
share based 1,114 1,330 compensation Accumulated deficit (6,711)
(5,980) Total Shareholders' Equity 59,996 58,281 Total Liabilities
and $ 71,677 $ 63,859 Shareholders'Equity Condensed Consolidated
Statements of Operations and Comprehensive Loss March 31, March31,
(CDN $000's) 2012 2011 Revenue $ 8,030 $ 3,502 Centre expenses
Salaries, wages and benefits 4,018 1,709 Other operating expenses
1,475 599 2,537 1,194 Lease expense 444 130 Finance costs 46 -
General and administrative 1,358 934 Acquisition costs 876 115
Stock-based compensation 196 96 Depreciation and amortization 392
205 3,312 1,480 Loss before other income (775) (286) Other income
44 37 Net Loss and Total Comprehensive Loss $ (731) $ (249) Net
loss per share Basic and diluted $ (0.006) $ (0.003) Weighted
average number of common shares Basic and diluted 116,709,441
92,438,815 Condensed Consolidated Statements of Changes in
Shareholders' Equity Equity Settled Share Share Based Accumulated
Shareholders' (CDN 000's) Capital Compensation Deficit Equity
Balance at $ 38,463 $ 1,089 $ (3,424) $ 36,128 January 1, 2011
Stock-based - 96 - 96 compensation Warrants 232 (36) - 196
exercised Stock options 19 - - 19 exercised Net loss and - - (249)
(249) comprehensive loss Balance at March $ 38,714 $ 1, 149 $ (3,
673) $ 36,190 31, 2011 Balance at $ 62,931 $ 1,330 $ (5,980) $
58,281 January 1, 2012 Stock-based - 196 - 196 compensation
Warrants 2,662 (412) - 2,250 exercised Net loss and - - (731) (731)
comprehensive loss Balance at March $ 65,593 $ 1,114 $ (6,711) $
59,996 31, 2012 Condensed Consolidated Statements of Cash Flow
March 31, March 31, (CDN 000's) 2012 2011 Cash provided by (used
in): Operating Activities: Net loss $ (731) $ (249) Items not
affecting cash: Depreciation and amortization 392 205 Finance costs
46 13 Stock-based compensation 196 96 Change in non-cash working
capital 650 (796) 553 (731) Investing Activities Acquisitions
(1,225) - Property and equipment (3,633) (1,111) (4,858) (1,111)
Financing Activities Exercise of warrants 2,250 196 Exercise of
options - 19 Loan proceeds 3,996 - Loan repayments (49) - 6,197 215
Change in Cash and Cash Equivalents 1,892 (1,627) Cash and cash
equivalents, beginning of period 1,911 8,662 Cash and cash
equivalents, end of period $ 3,803 $ 7,035 Cash and cash
equivalents comprised of: Cash $ 3,803 $ 6,433 Cash equivalents -
602 $ 3,803 $ 7,035 Edleun Group, Inc.
CONTACT: Dale Kearns, President of Edleun Group, Inc. at (403)
705-0362ext.406, or Nick Hurst of the Equicom Group, Inc. at (403)
218-2835.
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