$KLC

KinderCare Learning Companies, Inc.

CIK:0001873529|SEC Filings

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2026	Jun. 28, 2025	Jul. 04, 2026	Jun. 28, 2025
Income Statement [Abstract]
Revenue	$ 697,522	$ 700,110	$ 1,370,044	$ 1,368,354
Costs and expenses:
Cost of services (excluding depreciation and impairment)	567,434	519,477	1,118,357	1,035,665
Depreciation and amortization	31,699	31,074	62,776	61,051
Selling, general, and administrative expenses	73,068	78,648	144,197	150,375
Impairment losses	22,923	2,235	314,398	3,745
Total costs and expenses	695,124	631,434	1,639,728	1,250,836
Income (loss) from operations	2,398	68,676	(269,684)	117,518
Interest expense	18,255	20,073	36,475	40,181
Interest income	(970)	(1,424)	(1,812)	(2,083)
Other income, net	(4,342)	(3,049)	(3,435)	(2,651)
(Loss) income before income taxes	(10,545)	53,076	(300,912)	82,071
Income tax (benefit) expense	(1,775)	14,488	(2,310)	22,326
Net (loss) income	(8,770)	38,588	(298,602)	59,745
Other comprehensive income (loss), net of tax:
Change in net gains (losses) on cash flow hedges	2,242	(2,091)	5,494	(6,498)
Total comprehensive (loss) income	$ (6,528)	$ 36,497	$ (293,108)	$ 53,247
Net (loss) income per common share:
Basic	$ (0.07)	$ 0.33	$ (2.52)	$ 0.51
Diluted	$ (0.07)	$ 0.33	$ (2.52)	$ 0.5
Weighted average number of common shares
Basic	118,798	118,309	118,648	118,274
Diluted	118,798	118,371	118,648	118,346

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2026	Jun. 28, 2025
Operating activities:
Net Income (Loss)	$ (298,602)	$ 59,745
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization	62,776	61,051
Impairment losses	314,398	3,745
Change in deferred taxes	(2,781)	(1,963)
Amortization of debt issuance costs	2,982	3,189
Stock-based compensation	4,171	7,309
Realized and unrealized gains from investments held in deferred compensation asset trusts	(2,354)	(1,978)
Gain on disposal of property and equipment	0	(97)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	4,211	(8,397)
Prepaid expenses and other current assets	52,997	2,203
Other assets	1,365	7,797
Accounts payable and accrued liabilities	12,583	15,217
Leases	368	4,622
Deferred revenue	5,298	8,929
Other current liabilities	(55,432)	(27,001)
Other long-term liabilities	2,502	(762)
Related party payables	0	(119)
Cash provided by operating activities	104,482	133,490
Investing activities:
Purchases of property and equipment	(58,005)	(57,735)
Payments for acquisitions, net of cash acquired	(995)	(14,560)
Proceeds from the disposal of property and equipment	0	169
Investments in deferred compensation asset trusts	(3,537)	(3,667)
Proceeds from deferred compensation asset trust redemptions	4,070	3,603
Cash used in investing activities	(58,467)	(72,190)
Financing activities:
Payments of deferred offering costs	0	(275)
Principal payments of long-term debt	(4,810)	(2,417)
Payments of debt issuance costs	0	(269)
Repayments of promissory notes	(149)	(165)
Payments of financing lease obligations	(511)	(689)
Tax payments related to net settlement of restricted stock units	(138)	(786)
Cash used in financing activities	(5,608)	(4,601)
Net change in cash, cash equivalents, and restricted cash	40,407	56,699
Cash, cash equivalents, and restricted cash at beginning of period	133,299	62,430
Cash, cash equivalents, and restricted cash at end of period	173,706	119,129
Reconciliation of cash, cash equivalents, and restricted cash to the unaudited condensed consolidated balance sheets:
Cash and cash equivalents	173,706	119,034
Restricted cash included within other assets	0	95
Total cash, cash equivalents, and restricted cash at end of period	173,706	119,129
Supplemental cash flow information:
Cash paid for interest, net	33,989	31,169
Cash paid for income taxes, net of refunds	879	15,046
Cash paid for amounts included in the measurement of operating lease liabilities	159,670	146,754
Non-cash operating activities:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities, net	77,184	160,213
Deferred cloud computing implementation costs included in accounts payable	183	300
Non-cash investing and financing activities:
Property and equipment additions included in accounts payable and accrued liabilities	10,458	11,009
Finance lease right-of-use assets obtained in exchange for finance lease liabilities, net	83	115
Reductions to finance lease right-of-use assets resulting from reductions to finance lease liabilities	0	1,261
Contingent consideration and holdbacks payable for acquisitions	$ 110	$ 1,534

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jul. 04, 2026	Jan. 03, 2026
Current assets:
Cash and cash equivalents	$ 173,706	$ 133,205
Accounts receivable, net	114,312	118,523
Prepaid expenses and other current assets	54,038	106,291
Total current assets	342,056	358,019
Property and equipment, net of accumulated depreciation of 608,539 and 582,808	391,559	417,789
Goodwill	692,405	964,829
Intangible assets, net of accumulated amortization of 161,585 and 157,437	416,774	420,922
Operating lease right-of-use assets	1,474,434	1,500,786
Other assets	86,339	85,545
Total assets	3,403,567	3,747,890
Current liabilities:
Accounts payable and accrued liabilities	174,793	163,312
Current portion of long-term debt	9,620	9,620
Operating lease liabilities-current	162,938	146,594
Deferred revenue	54,875	49,577
Other current liabilities	56,893	115,762
Total current liabilities	459,119	484,865
Long-term debt, net	916,097	917,925
Operating lease liabilities-long-term	1,421,301	1,447,524
Deferred income taxes, net	34,585	35,454
Other long-term liabilities	106,278	106,860
Total liabilities	2,937,380	2,992,628
Commitments and contingencies (Note 15)
Shareholders' equity:
Preferred stock, par value $0.01; 25,000 shares authorized; no shares issued and outstanding as of July 4, 2026 and January 3, 2026	0	0
Common stock, par value $0.01; 750,000 shares authorized; 118,517 shares issued and outstanding as of July 4, 2026 and 118,340 shares issued and outstanding as of January 3, 2026	1,185	1,183
Additional paid-in capital	845,332	841,301
Retained deficit	(381,221)	(82,619)
Accumulated other comprehensive income (loss)	891	(4,603)
Total shareholders' equity	466,187	755,262
Total liabilities and shareholders' equity	$ 3,403,567	$ 3,747,890