KinderCare Learning Companies (KLC) Q1 2025 Earnings Call May 13, 2025 05:00 PM ET Company Participants Olivia Kirrer - VP - Growth Finance and M&APaul Thompson - Chief Executive OfficerTony Amandi - CFORonan Kennedy - Vice President Conference Call Participants Toni Kaplan - AnalystAndrew Steinerman - Equity Research Analyst - Business & Info ServicesJeffrey Meuler - AnalystGeorge Tong - AnalystJeff Silber - Senior AnalystJoshua Chan - Director, Equity Research Analyst Operator It is now my pleasure to int ...

KinderCare Learning Companies (KLC) Q1 2025 Earnings Call May 13, 2025 05:00 PM ET Speaker0 It is now my pleasure to introduce Olivia Keer, KinderCare's VP of Investor Relations. Ms. Keer, you may begin your conference. Speaker1 Thank you, and good evening, everyone. Welcome to KinderCare's first quarter earnings call. Joining me from the company are our Chief Executive Officer, Paul Thompson and Chief Financial Officer, Tony Amandy. Following Paul and Tony's comments today, we will have a question and answ ...

Early Childhood Education Centers - As of March 29, 2025, the company operated 1,582 early childhood education centers, an increase from 1,563 centers as of March 30, 2024, with a total capacity for 211,767 children[116] - Average weekly ECE full-time enrollment (FTEs) decreased by 1,104, or 0.8%, to 144,076 for the three months ended March 29, 2025, compared to 145,180 for the same period in 2024[120] - ECE same-center revenue increased by $8.6 million, or 1.4%, to $606.4 million for the three months ended March 29, 2025, compared to $597.7 million for the same period in 2024[124] - ECE same-center occupancy decreased by 50 basis points to 69.1% for the three months ended March 29, 2025, compared to 69.6% for the same period in 2024[122] - Revenue from early childhood education centers increased by $9.7 million, or 1.6%, primarily driven by $8.6 million higher same-center revenue[147] Financial Performance - Total revenue for the three months ended March 29, 2025, was $668.2 million, an increase of $13.6 million or 2.1% compared to $654.7 million for the same period in 2024[146] - Net income for the three months ended March 29, 2025, was $21.2 million, compared to a net loss of $1.8 million for the same period in 2024[145] - Adjusted net income for the three months ended March 29, 2025, was $27,030,000, compared to $10,292,000 for the same period in 2024, marking an increase of approximately 162.5%[166] - Adjusted EBITDA for the three months ended March 29, 2025, was $83,551,000, up from $74,440,000 in the prior year, indicating a year-over-year increase of approximately 12.5%[164] Government Subsidies and Revenue - Subsidy revenue from government agencies was $240.1 million for the three months ended March 29, 2025, up from $215.8 million for the same period in 2024[127] Expenses and Cost Management - Cost of services (excluding depreciation and impairment) increased by $18.5 million, or 3.7%, due to a $10.7 million decrease in government assistance reimbursements[150] - Selling, general, and administrative expenses decreased by $18.7 million, or 20.7%, primarily due to lower stock-based compensation and bonus expenses[152] - Interest expense decreased by $16.3 million, or 44.8%, due to lower outstanding principal and interest rates following the October 2024 repayment[154] - Impairment losses decreased by $2.9 million, or 65.4%, due to fewer centers triggering impairment assessments[153] Cash Flow and Liquidity - Cash provided by operating activities increased to $98,444,000 for the three months ended March 29, 2025, compared to $64,119,000 for the same period in 2024, reflecting a growth of approximately 53.4%[185] - Cash provided by operating activities increased by $34.3 million for the three months ended March 29, 2025, compared to the same period in 2024, primarily due to lower interest expense[186] - The company had cash, cash equivalents, and restricted cash of $131,389,000 at the end of the period, compared to $128,831,000 at the end of the same period in 2024, showing a slight increase[185] Debt and Financing - The net proceeds from the IPO were primarily utilized to repay $608.0 million of outstanding principal on the first lien term loan, allowing for reduced interest rates on senior secured credit facilities[138] - The company has a total borrowing capacity of $262.5 million under its First Lien Revolving Credit Facility as of March 29, 2025[171] - As of March 29, 2025, there were no outstanding borrowings under the First Lien Revolving Credit Facility, with $55.1 million of outstanding letters of credit[175] - Long-term debt obligations total $1.3 billion, with $77.4 million expected to be paid out for the remainder of fiscal 2025[193] - The company entered into interest rate swap contracts with a notional amount of $400.0 million at fixed rates of 3.85% and 3.89% to hedge interest rate risk[196] Future Outlook and Strategy - The company aims to improve occupancy rates across its centers, leveraging strategic investments in technology and talent[111] - The company plans to expand its footprint through greenfield development and strategic acquisitions, anticipating long-term revenue and profit growth[112] - The company expects to implement regular price increases to support center reinvestment and enhance operational performance[112] - The company expects to meet its liquidity requirements for at least the next 12 months under current operating conditions[170]

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Exhibit 99.1 KinderCare Reports First Quarter 2025 Financial Results First Quarter Highlighted by Increased Revenue, Net Income Growth, Portfolio Expansion, and Continued Strong Adjusted EBITDA Generation. Reiterates 2025 Guidance. Lake Oswego, Ore. (May 13, 2025) – KinderCare Learning Companies, Inc. (NYSE: KLC) ("KinderCare," the "Company," and "we"), a leading provider of high-quality early childhood education ("ECE"), today announced financial results for the first quarter ended March 29, 2025. First Qu ...

KinderCare Learning Companies, Inc. KLC will release earnings results for the first quarter, after the closing bell on Tuesday, May 13.Analysts expect the Lake Oswego, Oregon-based company to report quarterly earnings at 17 cents per share. KinderCare Learning projects to report quarterly revenue at $680.94 million, according to data from Benzinga Pro.On April 3, The Bear Cave released a short report on KinderCare, alleging the company is plagued by operational failures that could threaten its stock perform ...

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving KinderCare Learning Companies, Inc. and its officers or directors [1] Group 1: IPO and Financial Performance - KinderCare conducted its initial public offering on October 9, 2024, selling 24 million shares at $24.00 per share [3] - For the fourth quarter of 2024, KinderCare reported an operational loss of $89.3 million, a significant decline from an operational income of $48.7 million in the previous year, attributed to increased equity-based compensation expenses and lower COVID-19 stimulus reimbursements [4] - The company's full-year guidance for 2025 fell short of consensus estimates [4] Group 2: Stock Price Reaction - Following the announcement of the financial results, KinderCare's stock price dropped by $3.92 per share, or 22.17%, closing at $13.76 per share on March 21, 2025 [5]

Core Viewpoint - KinderCare Learning Companies, Inc. is under investigation for potential violations of federal securities laws following disappointing financial results and a significant stock price drop after its IPO [1][2][3] Financial Performance - KinderCare conducted its IPO on October 9, 2024, selling 24 million shares at $24.00 each [2] - For the fourth quarter of fiscal year 2024, KinderCare reported an operational loss of $89.3 million, a stark contrast to an operational income of $48.7 million in the same quarter of the previous year [2] - The loss was attributed to increased equity-based compensation expenses and lower COVID-19 stimulus reimbursements [2] - Full-year guidance provided by KinderCare fell short of consensus estimates [2] Stock Market Reaction - Following the announcement of its financial results, KinderCare's stock price fell by $3.92, or 22.17%, closing at $13.76 per share on March 21, 2025 [3]

LOS ANGELES, April 15, 2025 /PRNewswire/ -- The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of KinderCare Learning Companies, Inc. ("KinderCare" or "the Company") (NYSE: KLC) for violations of the securities laws.The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. KinderCare announced its Q4 and full year 2024 financial resu ...

Group 1 - The law firm Kessler Topaz Meltzer & Check, LLP is investigating potential violations of federal securities laws on behalf of investors of KinderCare Learning Companies, Inc. [1] - KinderCare conducted its IPO on October 9, 2024, selling 24 million shares at $24.00 per share [2]. - For the fourth quarter of 2024, KinderCare reported an operational loss of $89.3 million, a significant decline from an operational income of $48.7 million in the previous year, attributed to increased equity-based compensation expenses and lower COVID-19 stimulus reimbursements [2]. - KinderCare's full-year guidance for 2025 fell short of consensus estimates [2]. Group 2 - Following the announcement of its financial results, KinderCare's stock price dropped by $3.92 per share, or 22.17%, closing at $13.76 per share on March 21, 2025 [3].