Edleun Reports 2012 Fourth Quarter and Year End Results

CALGARY, April 4, 2013 /CNW/ - Edleun Group, Inc. ("Edleun" or the "Company") (TSX-V: EDU), the leading provider of quality early childhood education and care in Canada, announced today its operational and financial results for the three and 12 months ended December 31, 2012.

The Company's Annual Financial Statements and Management's Discussion and Analysis are available at www.edleungroup.com and on SEDAR at www.sedar.com.

Child care centre portfolio highlights for the 2012 fiscal year include:

• Increasing licensed capacity by 35%; acquisitions added 643 spaces and increased licensed capacity from development and redevelopment activities added 709 spaces;
  
  
• Acquiring two "turn around" operating child care centres in Oakville and Burlington, Ontario in two separate transactions for total consideration of $1.26 million. These facilities are situated in leased premises and added 248 licensed child care spaces to the Company's portfolio, representing an opportunistic purchase to reposition and expand enrollment at these centres;
  
  
• Completing redevelopment of the Highland Park Learning Centre in Calgary and commencing operations adding 75 licensed child care spaces to the Company's portfolio;
  
  
• Acquiring two Montessori child care centres in the Greater Toronto Area of Ontario and one operating child care centre in Airdrie, Alberta in two separate transactions for total consideration of $1.1 million. These facilities are situated in leased premises and added 245 licensed child care spaces to the Company's portfolio;
  
  
• Completing redevelopment of the Lawrence Learning Centre in Kelowna, British Columbia with 140 licensed spaces and acquiring a child care centre that relocated into this premise in July 2012;
  
  
• Completing development of the Company's first greenfield development project, the Chestermere Learning Centre near Calgary, adding 247 licensed spaces with operations commencing in July 2012;
  
  
• Appointing Ms. Mary Ann Curran as Chief Executive Officer;
  
  
• Appointing Mr. Dean Michaels as Senior Vice President Acquisitions and Development;
  
  
• Acquiring three operating Montessori child care centres in Ottawa, Ontario. These facilities are situated in leased premises and added 150 licensed child care spaces to the Company's portfolio. A fourth centre acquired as part of the same agreement closed in February 2013 and added a further 47 licensed spaces. Total consideration for the four centres was $2.3 million; and
  
  
• Completion and opening of the McKenzie Towne Learning Centre, the Company's second new greenfield development providing 247 licensed child care spaces in the south Calgary community.

Key Business Metrics

Stabilized Portfolio performance highlights

• Stabilized centres (see below for non-IFRS definitions) improved their occupancy level from 86.8% to 90.1%  during 2012;
• Year over year revenue growth in stabilized centres was 9.2% from $15 million to $16.3 million; and
• Stabilized centre margin as a percentage of revenue for the twelve months ended December 31, 2012 was 32.2%  compared to 28% for centres acquired in 2011 and 9.8% for centres acquired or opened in 2012; a strong indicator of centre performance trends under the Company's ownership.

New centre developments:

			Highland Park			Chestermere			Lawrence Avenue			McKenzie Towne			Total
Capital invested ($ millions)			1.6			6.1			3.1			6.1			16.9
Spaces #			75			247			140			247			709
Average occupancy % in Q4 2012			91.3			62.0			72.9			73.3			71.2
Current occupancy % at date of this MD&A			94.7			72.0			80.0			96.5			84.5

Financial results for the 2012 fiscal year reflect:

A net loss of $4.5 million ($0.037 per share), up from $2.6 million in 2011 ($0.024 per share).  The increased loss included, in part, the effects of:

• Revenue of $36.4 million; an increase of 101% from 2011;
  
  
• Centre margin of $10.0 million compared with $5.7 million a year earlier, with centre margin as a percentage of revenue declining from 32% to 28% due to the early stage financial performance from spaces added in 2012 through acquisition and development, which were in the process of increasing enrollment;
  
  
• Increase in depreciation expense of $1.1 million; and
  
  
• Expenses that included one-time costs related to:
• Implementation of ERP system, legal amalgamations, severance and recruiting, $1,644; and
• Provision for terminated projects expense, $540.

Adjusted EBITDA of $1.8 million; an increase of $1.6 million from 2011.

Funds from Operations (FFO) of $864,000 compared with negative $146,000 in the prior year reflecting early stage financial performance from spaces added in 2012 through acquisition and development. These acquisitions and developments were primarily funded by debt; the interest related to this debt substantially reduces FFO during the enrollment ramp up period at these centres.

Adjusted Funds From Operations ("AFFO") of $1,213 compared with $118 in the prior year.

"During 2012 Edleun reached a milestone with 50 centres in its portfolio, including two state of the art facilities in Calgary equipped with the latest resources for child care and early learning. The basic premise for child care in Canada remains unchanged: there are many underserved markets that offer the opportunity to provide quality child care.  We are exceptionally pleased with the results of our first two greenfield developments.  These projects are three times the scale of our typical acquisition.  While somewhat delayed in completion of construction, the projects were developed at a cost of $750,000 less than budgeted.  In total we invested $17 million in creating 709 new child care spaces and based on their rapid pace of enrollment will begin to fully contribute to our net income and cash flow in 2013", said Mary Ann Curran, Chief Executive Officer.

"During 2013 growth will be augmented by the newly opened Alberta and British Columbia centres; and  execution of the turnaround of the Oakville and Burlington centres acquired through distressed sales.  In 2012 our centres in Alberta continued to perform well and improve over 2011. Following the initial year of operations in Ontario, we are effecting a select repositioning in response to a somewhat faster than anticipated pace of implementation of full day kindergarten.  We believe that organic growth will continue to improve.  Completion of the implementation of the Enterprise Resource Planning system ("ERP") will enable the Company to contemplate greater efficiencies in managing its corporate and labour costs. The objective is clear: to maximize return on the capital invested that underpins our child care centre portfolio," said Dale Kearns, President and Chief Financial Officer.

Financial Review

($000's except where otherwise noted and per share amounts)

Selected Quarterly Information (1)

			Q4 2012			Q3 2012			Q2 2012			Q1 2012			Q4 2011			Q3 2011			Q2 2011			Q1 2011
Revenue			$	10,594		$	8,818		$	8,984		$	8,030		$	5,840		$	4,877		$	3,958		$	3,502
Centre margin^1			2,731		2,108			2,709			2,475			1,841			1,406			1,286			1,194
Centre margin %			26		24			30			31			31			29			32			34
Adjusted EBITDA^2			590		(74)			616			673			192			(294)			137			144
FFO^1			228		(285)			379			542			119			(314)			(22)			71
AFFO^1			320		(400)			566			727			211			(329)			100			136
Net loss^1,2			(1,587)		(1,543)			(539)			(793)			(810)			(957)			(541)			(249)
Per share amounts:
	Net loss		(0.013)		(0.013)			(0.005)			(0.007)			(0.007)			(0.008)			(0.006)			(0.003)
	FFO		0.002		(0.002)			0.003			0.005			0.001			(0.003)			(0.002)			0.001
	AFFO		0.003		(0.003)			0.005			0.006			0.002			(0.003)			0.001			0.001
# of centres in operation			50		46			45			40			38			29			22			20
Licensed spaces in operation			4,943		4,615			4,368			3,908			3,660			2,539			2,038			1,833

Notes:
1.		During the fourth quarter of 2012, management identified an error in the previously reported results for the first, second and third quarters of 2012. This error resulted in Salaries, Wages and Benefits under Centre Expenses for those quarters being understated by $62, $184 and $14, respectively. All amounts reported in this press release and the Company's MD&A have been amended to correct the error - see Adjusted EBITDA, FFO and AFFO table in the MD&A for further details. This error has no impact on the annual financial statements at December 31, 2012.
2.		2010 amounts have been restated from Canadian GAAP to IFRS.

Results of Operations for the three months ended December 31, 2012

For the three months ended December 31, 2012, the Company reported revenue of $10,594 (December 31, 2011 - $5,840) and centre margin of $2,731 (December 31, 2011 - $1,841). Year over year revenue increase was due primarily to a higher number of spaces available for enrollment.

Centre margin as a percentage of revenue declined from 31% to 26% due to certain centres acquired or opened in 2012 operating at lower than average levels of enrollment, resulting in financial performance at or near breakeven levels. Stabilized centre margin was 32.2% compared with 34.2% a year earlier, the slight decline due primarily to higher labour costs in the tight Alberta market. As noted above, ramp up in enrollment for spaces in the newly opened facilities in the Calgary area was substantially delayed; and centres acquired in Ontario under distressed sale proceedings remain in the early stages of repositioning and stabilization.  The impact of sooner than expected implementation of full day kindergarten in Ontario was experienced beginning in the third quarter of 2012.

General and administrative expense represents the cost of corporate level activities and includes executive salaries, accounting, finance and costs necessary to operate a public Company.  General and administrative costs for the fourth quarter of 2012 were $1,466 compared to $1,501 in the third quarter of 2012 and $1,212 in the fourth quarter of 2011.  Fourth quarter expenditures included one-time costs of approximately $273 primarily related to the Company's ongoing implementation of its ERP and the simplification of its corporate structure through a series of amalgamations to better enable tax planning and reduce the significant administrative costs. The remaining costs related to these undertakings and commitments are expected to be largely completed by the end of the second quarter of 2013.

In accordance with IFRS 3 Business Combinations, the Company expenses all business acquisition costs in the period they are incurred. Acquisition and development costs include costs associated with the acquisition of existing child care centres and the development of real estate for new child care centres. Such costs include advisory, legal, appraisal, due diligence and other professional fees, and direct expenses of the Company's internal acquisitions and development group. Acquisition costs for the fourth quarter of 2012 were $430 compared to $497 in the third quarter of 2012 and $605 during the fourth quarter of 2011.

Terminated projects expense of $540 was recorded in the fourth quarter of 2012 compared to nil in the third quarter of 2011 and nil in the fourth quarter of 2011. Terminated project expense includes costs incurred to pursue the development of two greenfield sites which were initiated by the Company's prior senior management team  and for which the Company has chosen to not proceed. Matters related to restrictions on future subdivision of a land parcel, among other things, and the size and nature of a proposed child care centre on the perimeter of an Alberta Census Metropolitan Area gave rise to the decision to terminate these projects. In the case of one location, the Company continues to deal with the developer in seeking alternative opportunities.  While the Company will continue to incur costs in advance of proceeding with development projects, current management controls and processes will minimize the potential for future losses of this nature.

Adjusted EBITDA for the fourth quarter of 2012 was $590 compared to $(74) in the third quarter of 2012 and $192 in the fourth quarter of 2011. Adjusted EBITDA improved by $664 on a sequential quarterly basis due to summer seasonality factors in the third quarter and the addition of three acquired centres and one development centre in the fourth quarter of 2012. Adjusted EBITDA for the fourth quarter of 2012 increased by $398 compared to the fourth quarter of 2011 due to the addition of 1,283 licensed spaces to the Company's portfolio during 2012, as well realizing a full quarter's impact of the 263 and 858 licensed spaces added in November 2011 and December 2011, respectively, offset by some of the one time costs outlined herein.

AFFO for the fourth quarter of 2012 was $320 compared to $(400) in the third quarter of 2012 and $211 for the fourth quarter of 2011.  Early stage centre margin levels from spaces added in 2012 through acquisition and development activities, several of which were yet to achieve breakeven, did not cover borrowing costs under interest bearing indebtedness. Enrollment levels in two greenfield development projects have since increased to 97% and 72% as at the date of this release and have positive centre margin. AFFO increased by $720 on a sequential quarterly basis for reasons consistent with those described above coupled with a reduction in maintenance capital expenditure of $203, partially offset by higher interest expense. AFFO increased by $109 compared to the fourth quarter of 2011 with the increase due to capacity, largely offset by an increase in interest expense, maintenance capex and income tax expense.

FFO for the fourth quarter of 2012 was $228 compared to $(285) for the third quarter of 2012 and $119 for the fourth quarter of 2011, the trends for which were substantially the same as AFFO.

Net loss for the fourth quarter of 2012 was $1,587 compared to a loss of $1,543 in the third quarter of 2012 and a net loss of $810 in the fourth quarter of 2011.

Results of Operations for the year ended December 31, 2012

For the year ended December 31, 2012 the Company reported revenues of $36,426 (December 31, 2011 - $18,177, a twofold increase year over year.  The increases in revenue compared with results for the same period of 2011 are due primarily to a larger portfolio of centres and organic growth therein.

Centre margin as a percentage of revenue was 28% for the year ended December 31, 2012 compared to 32% for the year ended December 31, 2011.  This decrease in centre margin as a percentage of revenue is primarily attributable to centres acquired or opened during the year with low initial occupancy levels and relatively higher labour costs.

General and administrative expenses for the year ended December 31, 2012 were $5,805 (December 31, 2011 - $4,551).  The increase of $1,254 in general and administrative expenses was due in large part to $725 of non-recurring costs incurred to: review, select and implement new operational and financial information systems to support the Company in its growth objectives, $197; higher legal fees to cover the initial Annual Information Form regulatory filing and the deferred share unit plan, $84; legal and tax advisory costs to pursue a series of subsidiary amalgamations, $94; recruiting and relocation costs of $125; severance, $212 and other of $13. 

Acquisition and development costs incurred during the year ended December 31, 2012 were $2,243 (December 31, 2011 - $1,330). Increased costs for the year include severance and employment termination and recruiting costs of $919, as well as certain costs related to the opening of two new development centres and two redevelopment centres in the year. The increase also includes certain costs associated with future potential acquisitions and developments.

Terminated projects expense was $540 in 2012 compared to nil in 2011. Terminated project expense includes costs incurred to pursue the development of  two greenfield sites which were initiated by the Company's prior senior management team  and for which the Company has chosen to not proceed. Matters related to restrictions on future subdivision of a land parcel, among other things, and the size and nature of a proposed child care centre on the perimeter of an Alberta Census Metropolitan Area gave rise to the decision to terminate these projects.

Net loss for the 2012 fiscal year widened to $4.5 million ($0.037 per share) from $2.6 million in 2012 ($0.024 per share) due to a series of items:

• Expense items totalling $4.8 million:
• Non recurring project termination costs of $540;
• Increased borrowing costs of $457;
• Depreciation increase of $1.1 million;
• Acquisition and development costs (expensed as incurred vs. capitalized) increase of $913 including non-recurring amounts of $919 related to restructuring the internal group;
• Higher general and administrative expense of $1.3 million due largely to one-time investments in ERP systems, precedent securities filings (AIF and Deferred Share Unit Plan), amalgamations, recruiting and severances of $725; and
• Other net expense items, $445.
• Partially offset by:
• $2.9 million higher income from centre operations.

Adjusted EBITDA of $1,805; an increase of $1,626 from 2011.

FFO was $864 compared with negative $146 in the prior year; reflecting early stage financial performance from spaces added in 2012 through acquisition and development and funded primarily through interest bearing indebtedness.

AFFO of $1,213 compared with $118 in the prior year.

Basic and diluted net loss per share for the year ended December 31, 2012 was $(0.037) (December 31, 2011 - $(0.024).

Adjusted EBITDA	2012			2011			2010
Centre margin for the period		$	10,023		$	5,727		$	1,894
General and administrative expense	(5,805)			(4,551)			(2,867)
Taxes, other than income taxes	(164)			(91)			-
Operating lease expense	(2,249)			(906)			(297)
Adjusted EBITDA		$	1,805		$	179		$	(1,270)
FFO and AFFO
Net loss for the period		$	(4,462)		$	(2,557)		$	(3,348)
Depreciation and certain other non-cash items	2,543			1,081			306
Acquisition and development costs	2,243			1,330			790
Terminated project expense	540			-			-
FFO		$	864		$	(146)		$	(2,252)
Stock based compensation	777			434			940
Qualifying transaction amounts expensed	-			-			324
Accrued 2010 public company costs prior to Qualifying Transaction	-			-			240
Maintenance capital expenditure	(428)			(170)			-
AFFO		$	1,213		$	118		$	(748)

Adjusted EBITDA in 2012 was $1,805 compared to $179 in 2011. Adjusted EBITDA improved by $1,626 due largely to centres representing 1,737 spaces acquired in 2011 on line for a full year compared to a partial year in 2011.  Additionally, 2012 includes incremental Adjusted EBITDA from the 1,352 spaces of capacity associated with acquired and developed/redeveloped centres in the current year, partially offset by capacity reductions of 69 spaces in order to align supply with demand in certain locations.

AFFO for the year ended December 31, 2012 was $1,213 compared to $118 in the prior year.  AFFO increased by $1,095 on a year over year basis due to the increased capacity from acquisitions and the opening of development and redevelopment centres, partially offset by higher financing charges and maintenance capital also.

AFFO per share for the year ended December 31, 2012 was $0.010 compared to $0.001 for prior year.

FFO for the year ended December 31, 2012 was $864 compared to $(146) for prior year, the trends for which were substantially the same as AFFO.

FFO per share for the year ended December 31, 2012 was $0.007 compared to $(0.001) for the prior year.

Outlook

As the Company looks forward to its third anniversary in May 2013, the success of the business model has been validated as evidenced by trends:

• Stabilized centres improved their occupancy level from 86.8% to 90.1%, contributing to a revenue increase of 9.2%; and
• New centre developments representing $17 million of investment brought 709 spaces to market with occupancy rates at opening dates of 47% increasing to 85% as at the present date.

The substantial $1.6 million non-recurring costs incurred made by the Company during the year in ERP systems, corporate legal structure, precedent securities filings, recruiting and reorganization of the internal acquisition group are anticipated to decline during 2013.  As a result of these investments, the Company will be in a better position to achieve reductions in overhead costs and more efficient and effective cost management at our centres.  We will also have the tools necessary to identify opportunities to leverage spending for increased enrolment and better utilization of our facilities.

In July, 2012 the board of directors of the Company engaged the services of a new Chief Executive Officer with a view to guiding the Company through its next phases of evolution.  Ms. Mary Ann Curran brings deep and varied experience together with a skill set that lends itself to product management delivered in multi-location operating environments, demographic-based analysis of site selection and centre location, quality of service offerings and the creation of a brand that stands for the Edleun commitment to raise the bar on child care quality in Canada and deliver rewarding value to its stakeholders who include families, shareholders and employees.

At 50 child care centres, of which 46 were purchased and four developed, the Company believes it has reached a milestone.  The critical mass is now in place to leverage the very best curriculum, complementary programming, nutritional counselling, technology and training methodologies.  These, together with our passionate, skillful staff, excellent facilities and state of the art equipment, underpin our brand and promise of excellence with respect to child care and development.

The basic premise of the Edleun value proposition and business model remains unchanged.  There are many underserved markets in Canada that offer the opportunity to provide quality child care services.  We continue to be excited about the potential for growth and believe there is an under-supply of high quality child care spaces.  However, we also believe there is less to acquire and a greater opportunity for development, so there is a shift in emphasis to these two pillars of our external growth strategy - build-outs, co-locations and greenfield developments - while continuing to pursue select acquisitions.  The acquisition pipeline of six months ago has been re-addressed and all suitable opportunities are being acted upon or have been dismissed.  We are now rebuilding the pipeline and negotiating new deals.

In closing, we are excited for what is in store for 2013.  Our financial position is strong, evidenced by the Company's lender having increased its credit facility by $2 million and amended covenants in a manner favourable to the Company.  More importantly, our parent feedback and increasing enrolments provide validation that we are satisfying the families we serve.  On that basis we anticipate our current model, enhanced by the initiatives discussed, will deliver attractive returns to our employees, customers and investors in 2013.

Non IFRS Performance Measures

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.

The Company uses "stabilized centre results" to measure the performance. Acquired centres in Alberta are deemed to be stabilized 12 months following their acquisition.  Acquired centres in Ontario and British Columbia and new development centres in all provinces are deemed to be stabilized after 24 months.

Adjusted EBITDA is calculated by deducting from centre margin general and administrative expenses, operating lease expense and taxes other than income taxes. FFO is calculated by adjusting the net loss to add back acquisition costs expensed as incurred, depreciation and certain other non-cash items.

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.

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 Thursday, April 4, 2013 at 10:00 am ET (8:00 am MT), to discuss the results of the fourth 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 [phone] 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 Thursday, April 11, 2013, at midnight. To access the archived conference call, dial [phone] or 1-855-859-2056 and enter the reservation number 29689319 followed by the number sign.

A live audio webcast of the conference call will be available at: http://www.newswire.ca/en/webcast/detail/1136253/1239689. 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 (TSX-V: EDU), 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 of 51 operating centres in its portfolio representing approximately 4,990 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.

Edleun Group, Inc.
Consolidated Statements of Financial Position
(CDN $000's)					December 31, 2012				December 31, 2011
Assets
Non-current assets
	Property and equipment			$	46,205			$	33,434
	Goodwill				27,802				22,940
	Definite life intangible assets				382				340
					74,389				56,714
Current assets
	Cash				5,800				1,911
	Accounts receivable				1,663				1,589
	Prepaid and other expenses				1,864				3,606
	Short term investments				259				39
					9,586				7,145
Total Assets				$	83,975			$	63,859
Liabilities
Non-current liabilities
	Long term debt and financing leases			$	11,828			$	2,151
	Deferred tax liability				-				42
	Convertible debentures - liability component				4,353				-
					16,181				2,193
Current liabilities
	Accounts payable and accrued liabilities				3,925				2,877
	Deferred revenue				867				399
	Current portion of debt and financing leases				5,488				109
					10,280				3,385
Total Liabilities					26,461				5,578
Shareholders' Equity
	Share capital				66,030				62,931
	Convertible debentures - equity component				342				-
	Equity settled share based compensation				1,584				1,330
	Accumulated deficit				(10,442)				(5,980)
Total Shareholders' Equity					57,514				58,281
Total Liabilities and Shareholders' Equity				$	83,975			$	63,859

Edleun Group, Inc.
Consolidated Statements of Operations and Comprehensive Loss
Years ended December 31, 2012 and 2011
(CDN $000's)					2012				2011
Revenue				$	35,365			$	17,561
Government grants					1,061				616
Total revenue					36,426				18,177
Centre expenses
	Salaries, wages and benefits				19,172				9,107
	Other operating expenses				7,231				3,343
Centre margin					10,023				5,727
Operating leases					2,249				906
Finance					614				157
General and administrative					5,805				4,551
Taxes, other than income taxes					163				91
Acquisition and development costs					2,243				1,330
Terminated projects and other					540				-
Stock-based compensation					777				434
Depreciation and amortization					2,134				1,058
					14,525				8,527
Loss before other income					(4,502)				(2,800)
Other income					70				251
Loss before income taxes					(4,432)				(2,549)
Income tax expense					30				8
Net Loss and Total Comprehensive Loss				$	(4,462)				$ (2,557)
Net loss per share
	Basic and diluted			$	(0.037)			$	(0.024)
Weighted average number of common shares
	Basic and diluted				120,317,053				107,797,856

Edleun Group, Inc.
Consolidated Statements of Changes in Shareholders' Equity
Years ended December 31, 2012 and 2011
(CDN $000's)			Share Capital				Convertible Debentures - Equity Component					Equity Settled Share Based Compensation						Accumulated Deficit					Shareholders' Equity
Balance at January 1, 2011			$	38,463			$	-				$	1,089					$	(3,423)				$	36,129
Share issuance				25,003				-					-						-					25,003
Share issuance costs				(1,494)				-					-						-					(1,494)
Stock-based compensation				-				-					434						-					434
Warrants exercised				232				-					(36)						-					196
Stock options exercised				727				-					(157)						-					570
Net loss and comprehensive loss				-				-					-						(2,557)					(2,557)
Balance at  December 31, 2011			$	62,931			$	-				$	1,330					$	(5,980)				$	58,281
Balance at January 1, 2012			$	62,931			$	-				$	1,330					$	(5,980)				$	58,281
Stock-based compensation				17				-					760						-					777
Warrants exercised				2,662				-					(412)						-					2,250
Options exercised				420				-					(94)						-					326
Issue of convertible debentures				-				342					-						-					342
Net loss and comprehensive loss				-				-					-						(4,462)					(4,462)
Balance at  December 31, 2012			$	66,030			$	342				$	1,584					$	(10,442)				$	57,514

Edleun Group, Inc.
Consolidated Statements of Cash Flow
Years ended December 31, 2012 and 2011
(CDN $000's)					2012					2011
Cash provided by (used in):
Operating Activities:
Net loss				$	(4,462)				$	(2,557)
Items not affecting cash:
	Depreciation and amortization				2,218					1,058
	Finance costs				614					157
	Stock-based compensation				777					434
	Income tax expense				30					8
Change in non-cash working capital					2,020					(1,524)
Cash generated from operations					1,197					(2,424)
Finance costs paid					(502)					(98)
Net cash generated by operating activities					695					(2,522)
Investing Activities
Acquisitions					(4,598)					(20,812)
Property and equipment					(13,287)					(10,116)
Restricted cash					(220)					165
					(18,105)					(30,763)
Financing Activities
Proceeds of share issue					-					25,003
Share issuance costs					-					(1,494)
Exercise of warrants					2,250					196
Exercise of options					326					569
Loan proceeds					14,549					2,500
Financing costs					-					(240)
Loan repayments					(285)					-
Proceeds of convertible debentures issue					5,000					-
Convertible debenture issuance costs					(388)					-
Finance lease repayments					(153)					-
					21,299					26,534
Change in Cash					3,889					(6,751)
Cash at beginning of year					1,911					8,662
Cash at end of year				$	5,800				$	1,911

 

 

SOURCE: Edleun Group, Inc.

please contact Dale Kearns, President of Edleun Group, Inc. at [phone] ext. 406