KinderCare Learning Companies (KLC) Registration Filing summary

Use of proceeds and capital allocation

• Net proceeds will be used to repay outstanding First Lien Term Loan Facility debt and pay offering fees; any remainder will be used for general corporate purposes.

• As of June 29, 2024, $1.58 billion was outstanding under the First Lien Term Loan Facility, maturing in June 2030 at SOFR + 4.50%.

• Affiliates of certain underwriters are lenders under the term loan and will receive 5% or more of the net proceeds due to debt repayment.

Company overview and business model

• Operates over 1,500 early childhood education centers and 900 before- and after-school sites in 40 states and D.C., serving children from six weeks to 12 years old.

• Largest private provider of high-quality early childhood education (ECE) in the U.S. by center capacity.

• Three main brands: KCLC (community-based), Crème School (premium), and Champions (before/after school).

• Employer-sponsored programs and public subsidy expertise expand access and diversify revenue.

Financial performance and metrics

• Fiscal 2023 revenue: $2.51 billion; net income: $102.6 million; Adjusted EBITDA: $266.4 million.

• Six months ended June 29, 2024: revenue $1.34 billion; net income $26.8 million; Adjusted EBITDA $160.8 million.

• ECE same-center occupancy for fiscal 2023 was 68.9%; average weekly ECE FTEs were 144,707.

• Cost of services increased 28.1% in fiscal 2023, driven by higher personnel costs, enrollment, and reduced COVID-19 stimulus.

• COVID-19 stimulus funding is sunsetting by end of 2024, impacting future comparability.