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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 2001.
Commission File Number 0-24699
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BRIGHT HORIZONS FAMILY SOLUTIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 62-1742957
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
200 Talcott Avenue South
Watertown, Massachusetts 02472
(Address of principal executive offices)
(617) 673-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes [X] No [ ].
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: 12,213,994 shares of common
stock, $.01 par value, at August 7, 2001.
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FORM 10-Q
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
A. Consolidated Condensed Balance Sheets at June 30,
2001(unaudited) and December 31, 2000 3
B. Consolidated Statements of Operations for the Three
and Six Months ended June 30, 2001 and 2000 (unaudited) 4
C. Consolidated Statements of Cash Flows for the Six
Months ended June 30, 2001 and 2000 (unaudited) 5
D. Notes to Consolidated Financial Statements (unaudited) 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
ITEM 3. Quantitative and Qualitative Disclosure about Market Risk 13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 14
ITEM 2. Changes in Securities and Use of Proceeds 14
ITEM 3. Defaults Upon Senior Securities 14
ITEM 4. Submission of Matters to a Vote of Security Holders 14
ITEM 5. Other Information 15
ITEM 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
EXHIBITS 17
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Bright Horizons Family Solutions, Inc.
Consolidated Condensed Balance Sheets
(in thousands except share data)
June 30, December 31,
2001 2000
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 8,088 $ 8,599
Accounts receivable, net 23,334 23,945
Prepaid expenses and other current assets 2,550 3,508
Prepaid income taxes 1,173 --
Current deferred tax asset 5,297 5,297
--------- ---------
Total current assets 40,442 41,349
Fixed assets, net 70,147 64,433
Goodwill and other intangible assets, net 24,312 24,256
Non-current deferred tax asset 6,151 6,151
Other assets 765 706
--------- ---------
Total assets $ 141,817 $ 136,895
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit and short term debt $ 68 $ 6,319
Current portion of long-term debt and
obligations under capital leases 115 156
Accounts payable and accrued expenses 29,674 28,007
Deferred revenue 14,593 10,720
Income tax payable 32 540
Other current liabilities 1,291 1,872
--------- ---------
Total current liabilities 45,773 47,614
Long-term debt and obligations under
capital leases, net of current portion 374 425
Accrued rent 1,863 1,744
Other long-term liabilities 3,164 3,358
Deferred revenue, net of current portion 8,580 8,471
--------- ---------
Total liabilities 59,754 61,612
--------- ---------
Stockholders' equity:
Common Stock $.01 par value
Authorized: 30,000,000 shares
Issued: 12,701,000 and 12,564,000 shares June 30, 2001 and
December 31, 2000, respectively
Outstanding: 12,206,000 and 12,069,000 at June 30, 2001 and
December 31, 2000, respectively 127 126
Additional paid in capital 80,599 79,398
Treasury stock, 495,000 shares, at cost (7,081) (7,081)
Cumulative translation adjustment (150) 25
Retained earnings 8,568 2,815
--------- ---------
Total stockholders' equity 82,063 75,283
--------- ---------
Total liabilities and stockholders' equity $ 141,817 $ 136,895
========= =========
The accompanying notes are an integral part of the
consolidated financial statements
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Bright Horizons Family Solutions, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2001 2000 2001 2000
Revenues $85,756 $ 72,066 $ 167,492 $138,688
Cost of services 72,976 61,306 142,494 118,146
------- -------- --------- --------
Gross profit 12,780 10,760 24,998 20,542
Selling, general and administrative 7,149 6,046 13,915 11,589
Amortization 531 480 1,113 842
------- -------- --------- --------
Income from operations 5,100 4,234 9,970 8,111
Net interest income(expense) 9 49 (65) 124
------- -------- --------- --------
Income before tax 5,109 4,283 9,905 8,235
Income tax provision 2,145 1,784 4,152 3,424
------- -------- --------- --------
Net income $ 2,964 $ 2,499 $ 5,753 $ 4,811
======= ======== ========= ========
Earnings per share - basic $ 0.24 $ 0.21 $ 0.47 $ 0.41
======= ======== ========= ========
Weighted average shares - basic 12,177 11,836 12,130 11,828
======= ======== ========= ========
Earnings per share - diluted $ 0.23 $ 0.20 $ 0.45 $ 0.39
======= ======== ========= ========
Weighted average shares - diluted 12,826 12,345 12,783 12,334
======= ======== ========= ========
The accompanying notes are an integral part of the
consolidated financial statements
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Bright Horizons Family Solutions, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six months ended June 30,
2001 2000
Net income $ 5,753 $ 4,811
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 4,711 3,348
Loss on disposal of fixed assets -- 14
Changes in assets and liabilities:
Accounts receivable 596 (728)
Prepaid income taxes (1,173) --
Prepaid expenses and other current assets 944 82
Accounts payable and accrued expenses 1,745 1,981
Income taxes payable (507) (758)
Deferred revenue 4,001 3,625
Accrued rent 169 (45)
Other long-term assets (65) (133)
Other current and long-term liabilities (717) (183)
-------- --------
Net cash provided by operating activities 15,457 12,014
-------- --------
Cash flows from investing activities:
Additions to fixed assets, net of acquired amounts (9,629) (9,256)
Proceeds from disposal of fixed assets -- 19
Increase in other assets -- (503)
Cash payments for acquisitions (1,193) (7,690)
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Net cash used in investing activities (10,822) (17,430)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock from exercise
of options 1,202 112
Principal payments of long term debt and
obligations under capital leases (83) (19)
Payment of short term debt (1,115) --
Borrowing through line of credit 1,500 --
Repayments under line of credit (6,624) --
-------- --------
Net cash (used) provided by financing activities (5,120) 93
-------- --------
Effect of exchange rate changes on cash and cash equivalents (26) --
-------- --------
Net decrease in cash and cash equivalents (511) (5,323)
Cash and cash equivalents, beginning of period 8,599 12,752
-------- --------
Cash and cash equivalents, end of period $ 8,088 $ 7,429
======== ========
Supplemental cash flow information:
Cash payments for interest $ 40 $ 87
======== ========
Cash payments for income taxes $ 5,860 $ 4,190
======== ========
The accompanying notes are an integral part of the
consolidated financial statements
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ITEM 1.D. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The Company and Basis of Presentation
ORGANIZATION - Bright Horizons Family Solutions, Inc. (the "Company") was
incorporated under the laws of the state of Delaware on April 27, 1998 and
commenced substantive operations upon the completion of the merger by and
between Bright Horizons, Inc. ("BRHZ") and CorporateFamily Solutions, Inc.
("CFAM") on July 24, 1998 (the "Merger"). The Company provides workplace
services for employers and families including childcare, early education and
strategic work/life consulting throughout the United States, Guam, the United
Kingdom, and Ireland.
The Company operates its family centers under various types of arrangements,
which generally can be classified in two forms: (i) the sponsor model, where the
Company operates a family center on the premises of a sponsor and gives priority
enrollment to the sponsor's employees or affiliates and (ii) the management
model, where the Company manages a work-site family center under a cost-plus
arrangement, typically for a single employer.
BASIS OF PRESENTATION -- The accompanying financial statements have been
prepared by the Company in accordance with the accounting policies described in
the Company's audited financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, and should be read in
conjunction with the notes thereto.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all adjustments which are necessary to
present fairly its financial position as of June 30, 2001 and the results of its
operations for the three and six month periods ended June 30, 2001 and 2000, and
its cash flows for the six month periods ended June 30, 2001 and 2000, and are
of a normal and recurring nature. The results of operations for interim periods
are not necessarily indicative of the operating results to be expected for the
full year.
SEGMENT INFORMATION - In June 1997, the Financial Accounting Standards Board
(FASB) issued SFAS No. 131, Disclosures About Segments of an Enterprise and
Related Information (SFAS No. 131). As of June 30, 2001, the Company operates
solely in one segment, providing workplace services to employers and families
including childcare, early education and work/life consulting and generates in
excess of 90% of revenue and operating profit domestically.
COMPREHENSIVE INCOME - The Company applies the provisions of SFAS No. 130,
"Reporting Comprehensive Income", which establishes standards for reporting and
displaying comprehensive income and its components in the consolidated financial
statements. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from
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non-owner sources. The only components of comprehensive income reported by the
Company are net income and foreign currency translation adjustments.
For the Six Months
Ended June 30,
2001 2000
------- ------
Net income $ 5,753 $4,811
Foreign currency translation adjustments (175) --
------- ------
Comprehensive income $ 5,578 $4,811
======= ======
NEW ACCOUNTING PRONOUNCEMENTS -In July 2001, the Financial Accounting Standards
Board issued Statement No. 141, "Accounting for Business Combinations", and
Statement No. 142, "Goodwill and Other Intangible Assets." These statements
modify accounting for business combinations after June 30, 2001 and will affect
the Company's treatment of goodwill and other intangible assets at the start of
the fiscal year 2002, and for acquisitions consummated after June 30, 2001. The
statements require that goodwill existing at the date of adoption be reviewed
for possible impairment and that impairment tests be periodically repeated, with
impaired assets written down to fair value. Additionally, existing goodwill and
intangible assets must be assessed and classified with the Statement's criteria.
Intangible assets with estimated useful lives will continue to be amortized over
those periods. Amortization of goodwill and intangible assets with
indeterminable lives will cease. Although the Company has not yet determined the
full impact of these statements on reported results, amortization of goodwill
and other intangible assets for the six months ended June 30, 2001 totaled $1.1
million.
3. Earnings Per Share
Earnings per share has been calculated in accordance with Statement of Financial
Accounting Standards No. 128 "Earnings per Share" ("SFAS 128"), which
established standards for computing and presenting earnings per share. The
computation of net earnings per share is based on the weighted average number of
common shares and common equivalent shares outstanding during the period. For
the three and six month periods ended June 30, 2001 and 2000, the Company had no
warrants or preferred stock outstanding.
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The following tables present information necessary to calculate earnings per
share:
Three months Ended June 30, 2001
-----------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic earnings per share:
Income available to common stockholders $ 2,964,000 12,177,000 $ 0.24
======
Effect of dilutive securities:
Stock options -- 649,000
----------- ----------
Diluted earnings per share $ 2,964,000 12,826,000 $ 0.23
=========== ========== ======
Three months Ended June 30, 2000
-----------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic earnings per share:
Income available to common stockholders $ 2,499,000 11,836,000 $ 0.21
======
Effect of dilutive securities:
Stock options -- 509,000
----------- ----------
Diluted earnings per share $ 2,499,000 12,345,000 $ 0.20
=========== ========== ======
Six months Ended June 30, 2001
-----------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic earnings per share:
Income available to common stockholders $ 5,753,000 12,130,000 $ 0.47
======
Effect of dilutive securities:
Stock options -- 653,000
----------- ----------
Diluted earnings per share $ 5,753,000 12,783,000 $ 0.45
=========== ========== ======
Six months Ended June 30, 2000
-----------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic earnings per share:
Income available to common stockholders $ 4,811,000 11,828,000 $ 0.41
======
Effect of dilutive securities:
Stock options -- 506,000
----------- ----------
Diluted earnings per share $ 4,811,000 12,334,000 $ 0.39
=========== ========== ======
The weighted average number of shares excluded from the above calculations for
the three and six months ended June 30, 2001 were 15,682 and 10,918,
respectively, and 546,917 and 547,228 for the three and six months ended June
30, 2000, respectively, as their effect would be anti-dilutive.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Form 10-Q contains certain forward-looking statements regarding, among
other things, the anticipated financial and operating results of the Company.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release any modifications or revisions to these
forward-looking statements to reflect events or circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. In
connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company cautions investors that future
financial and operating results may differ materially from those projected in
forward-looking statements made by, or on behalf of, the Company. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance, or achievements of
the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. See "Risk
Factors" included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 and incorporated herein by reference for a description of a
number of risks and uncertainties which could affect actual results.
General
The Company provides workplace services for employers and families, including
child care, early education and strategic work/life consulting, operating 366
child development centers at June 30, 2001. During the three month period ending
June 30, 2001 the Company opened 17 new family centers, and closed 3 family
centers which were not meeting operating objectives and/or were transitioned to
other providers. The Company has the capacity to serve approximately 45,000
children in 35 states, the District of Columbia, Guam, the United Kingdom, and
Ireland and has partnerships with many of the nation's leading employers,
including 81 Fortune 500 companies. Working Mother's 2000 list of the "100 Best
Companies for Working Mothers" includes 44 clients of the Company. Historical
revenue growth has primarily resulted from the addition of new family centers as
well as increased enrollment at existing family centers. The Company reports its
operating results on a calendar year basis.
The Company's business is subject to seasonal and quarterly fluctuations. Demand
for child care and early education services has historically decreased during
the summer months. During this season, families are often on vacation or have
alternative child care arrangements. Demand for the Company's services generally
increases in September upon the beginning of the new school year and remains
relatively stable throughout the remainder of the school year. Results of
operations may also fluctuate from quarter to quarter as a result of, among
other things, the performance of existing centers including enrollment and
staffing fluctuations, the number and timing of new center openings and/or
acquisitions, the length of time required for new centers to achieve
profitability, center closings, refurbishment or relocation, the model mix
(sponsor vs. management) of new and existing centers, competitive factors and
general economic conditions.
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RESULTS OF OPERATIONS
The following table sets forth certain statement of operations data as a
percentage of revenue for the three and six month periods ended June 30, 2001
and 2000:
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Net revenues 100.0% 100.0% 100.0% 100.0%
Cost of services 85.1 85.1 85.1 85.2
------ ------ ------ ------
Gross profit 14.9 14.9 14.9 14.8
Selling, general & administrative 8.3 8.4 8.3 8.4
Amortization 0.6 0.6 0.7 0.6
------ ------ ------ ------
Income from operations 6.0 5.9 5.9 5.8
Interest income 0.0 0.1 0.0 0.1
------ ------ ------ ------
Income before income taxes 6.0 6.0 5.9 5.9
Income tax provisions 2.5 2.5 2.5 2.4
------ ------ ------ ------
Net income 3.5% 3.5% 3.4% 3.5%
====== ====== ====== ======
Three and Six Months Ended June 30, 2001 Compared to the Three and Six Months
Ended June 30, 2000
Revenue. Revenue increased $13.7 million, or 19.0%, to $85.8 million for the
three months ended June 30, 2001 from $72.1 million for the three months ended
June 30, 2000. Revenue increased $28.8 million, or 20.8%, to $167.5 million for
the six months ended June 30, 2001 from $138.7 million for the six months ended
June 30, 2000. The growth in revenues is primarily attributable to the net
addition of 41 family centers since June 30, 2000, modest growth in the existing
base of family centers and tuition increases at existing centers of
approximately 4% to 6%.
Gross Profit. Cost of services consists of center operating expenses, including
payroll and benefits for center personnel, facilities costs which includes
depreciation, supplies and other expenses incurred at the family center level.
Gross profit increased $2.0 million, or 18.8%, to $12.8 million for the three
month period ended June 30, 2001 from $10.8 million for the three months ended
June 30, 2000. As a percentage of revenue, gross profit remained steady at 14.9%
for the three months ended June 30, 2001 and 2000. Gross profit increased $4.5
million, or 21.7%, to $25.0 million for the six months ended June 30, 2001 from
$20.5 million for the six months ended June 30, 2000. As a percentage of net
revenues, gross profit increased to 14.9% for the six months ended June 30,
2001, compared to 14.8% for the same period in 2000.
The modest increase in gross profit margins for the six-month period ended June
30, 2001 compared to the same period in 2000 resulted from a greater proportion
of centers achieving mature operating levels. In addition, the Company opened a
greater proportion of management model centers during the 12 month period ended
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June 30, 2001, which do not incur operating losses during the enrollment ramp up
phase.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses consist of regional and district management personnel,
corporate management and administrative functions, and development expenses for
new and existing centers. Selling, general and administrative expenses increased
$1.1 million, or 18.2%, to $7.1 million for the three months ended June 30, 2001
from $6.0 million for the three months ended June 30, 2000. As a percentage of
revenue, selling, general and administrative expenses decreased to 8.3% for the
three months ended June 30, 2001 from 8.4% for the same period in 2000. Selling,
general and administrative expenses increased $2.3 million, or 20.1%, to $13.9
million for the six months ended June 30, 2001 from $11.6 million for the six
months ended June 30, 2000. As a percentage of net revenues, selling, general
and administrative expenses decreased to 8.3% for the six months ended June 30,
2001 from 8.4% for the six months ended June 30, 2000.
The dollar increase in selling, general, and administrative expenses is
primarily attributable to investments in regional and divisional management,
sales personnel, and general corporate and administrative personnel necessary to
support long-term growth as well as selling, general and administrative expenses
associated with expansion in the United Kingdom and Ireland. Selling, general
and administrative expenses, as a percentage of revenue, decreased during the
three months ended June 30, 2001 as compared to the three months ended June 30,
2000 as a result of a larger revenue base.
Income from Operations. Income from operations totaled $5.1 million for the
three months ended June 30, 2001, an increase of $866,000, or 20.5%, from $4.2
million in the same period for 2000. For the six months ended June 30, 2001,
income from operations increased $1.9 million, or 22.9%, to $10.0 million from
$8.1 million in the same period for 2000.
Net Interest Income (Expense). Net interest income was approximately $9,000 for
the three months ended June 30, 2001 as compared with $49,000 of net interest
income for the three months ended June 30, 2000. For the six months ended June
30, 2001 the Company had net interest expense of $65,000 as compared to net
interest income of $124,000 for the six months ended June 30, 2000. The decrease
in net interest income in 2001 from 2000 is primarily attributable to borrowings
under the Company's line of credit as well as lower levels of invested cash.
Income Tax Provision. The Company's effective income tax rate was approximately
42.0% for the three and six month periods ended June 30, 2001 and 41.6% for the
three and six month periods ended June 30, 2000. Management expects the tax rate
to remain steady throughout 2001.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are the ongoing operations of its
existing centers and the addition of new centers through development or
acquisition. The Company's primary sources of liquidity have been existing cash
balances and cash
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flow from operations, supplemented by borrowing capacity under the Company's
revolving line of credit. The Company had a working capital deficit of $5.3
million and $6.3 million as of June 30, 2001 and December 31, 2000,
respectively.
Cash provided from operations increased to $15.5 million for the six months
ended June 30, 2001, from $12.0 million for the six months ended June 30, 2000.
The increase in cash provided by operations is primarily the result of an
increase in net income before depreciation and amortization of $2.3 million
compared to the six months ended June 30, 2000. The increase in cash provided by
operating activities is also attributable to net decreases in accounts
receivable and prepaid expenses, which were offset by increases in prepaid
income taxes.
Cash used in investing activities decreased $10.8 million for the six months
ended June 30, 2001 from $17.4 million for the six months ended June 30, 2000,
which was primarily the result of payments for acquisitions totaling $7.7
million in 2000 compared to $1.1 million in 2001. Of the $9.6 million of fixed
asset additions for the six months ended June 30, 2001, approximately $7.8
million relates to new family centers, with the remaining balance being
primarily utilized for the refurbishment and expansion of existing family
centers. Management expects the current level of center related fixed asset
spending to remain the same for the remainder of 2001.
Cash used in financing activities totaled $5.1 million for the six months ended
June 30, 2001. The increase in cash used for financing activities is primarily
attributable to the net repayment of $5.1 million on the Company's line of
credit as well as payments of $1.1 million on other short-term debt. During the
six months ended June 30, 2001, the Company received $1.2 million in net
proceeds from the issuance of Common Stock associated with the exercise of stock
options, as compared to $112,000 in the same period in 2000.
Management believes that funds provided by operations and the Company's existing
cash and cash equivalent balances and borrowings available under the line of
credit will be adequate to meet planned operating and capital expenditure needs
for at least the next 18 months. However, if the Company were to make any
significant acquisitions or make significant investments in the purchase of
facilities for new or existing centers for corporate sponsors, it may be
necessary for the Company to obtain additional debt or equity financing. There
can be no assurance that the Company would be able to obtain such financing on
reasonable terms, if at all.
New Accounting Pronouncement Disclosures
In July 2001, the Financial Accounting Standards Board issued Statement No. 141,
"Accounting for Business Combinations", and Statement No. 142, "Goodwill and
Other Intangible Assets." These statements modify accounting for business
combinations after June 30, 2001 and will affect the Company's treatment of
goodwill and other intangible assets at the start of the fiscal year 2002, and
for acquisitions consummated after June 30, 2001. The statements require that
goodwill existing at the date of adoption be reviewed for possible impairment
and that impairment tests be periodically repeated, with impaired assets written
down to fair value. Additionally, existing goodwill and intangible assets must
be assessed and classified with the Statement's criteria. Intangible assets with
estimated useful lives will continue to be amortized over those periods.
Amortization of goodwill and intangible assets with indeterminable lives will
cease. Although the Company has not yet determined the full impact of these
statements on reported results, amortization expense for the six months ended
June 30, 2001 totaled $1.1 million.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
There have been no material changes in the Company's investment strategies,
types of financial instruments held or the risks associated with such
instruments which would materially alter the market risk disclosures made in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.
Foreign Currency Exchange Rate Risk
The Company's exposure to fluctuations in foreign currency exchange rates is
primarily the result of foreign subsidiaries domiciled in the United Kingdom and
Ireland. The Company does not currently use financial derivative instruments to
hedge foreign currency exchange rate risks associated with its foreign
subsidiaries.
The assets and liabilities of the Company's United Kingdom and Ireland
subsidiaries are translated into U.S. dollars at exchange rates in effect at the
balance sheet date. Income and expense items are translated at the average
exchange rates prevailing during the period. The cumulative translation effects
for the subsidiaries are included in cumulative translation adjustment in
stockholders' equity.
There have been no changes in the Company's foreign operations that would
materially alter the disclosures on foreign currency exchange risk made in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.
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PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings:
Not Applicable
ITEM 2. Changes in Securities and Use of Proceeds:
Not applicable
ITEM 3. Defaults Upon Senior Securities:
None
ITEM 4. Submission of Matters to a Vote of Security Holders:
The Company held its annual meeting of stockholders on May 23, 2001. At the
annual meeting, the stockholders of the Company voted to elect four Class III
directors for a term of three years and until their successors are duly elected
and qualified. The following table sets forth the number of votes cast for and
against/withheld with respect to each of the director nominees:
Nominee For Against/Withheld
William H. Donaldson 9,000,257 236
Fred K. Foulkes 9,000,257 236
Linda A. Mason 9,000,473 20
Ian M. Rolland 9,000,257 236
In addition to the foregoing directors, the following table sets forth the other
members of the Board of Directors whose term of office continued after the
meeting and the year in which his or her term expires:
Name Term Expires
JoAnne Brandes 2002
Joshua Bekenstein 2002
Roger H. Brown 2002
Robert D. Lurie 2002
E. Townes Duncan 2003
Sara Lawrence-Lightfoot 2003
Marguerite W. Sallee 2003
In addition, the stockholders approved an amendment to the Company's 1998 Stock
Incentive Plan, authorizing an increase in the aggregate number of shares of
common stock reserved for issuance thereunder from 1,500,000 to 2,250,000
shares.
For: 5,033,752 Against/Withheld: 2,626,075
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ITEM 5. Other information:
Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit 10.1 -- Third Amendment to the 1998 Stock Incentive Plan
(b) Reports on Form 8-K
Not Applicable
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized:
Date: August 10, 2001
BRIGHT HORIZONS FAMILY SOLUTIONS, INC.
By: /s/ Elizabeth J. Boland
----------------------------------------
Elizabeth J. Boland
Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit 10.1 -- Third Amendment to the 1998 Stock Incentive Plan
17