Bright Horizons Family Solutions Inc (BFAM) 2004 Q3 法說會逐字稿

Ladies and gentlemen, welcome to Bright Horizons' third-quarter conference call. Your host for today is Mr. David Lissy. Mr. Lissy, you may begin.

Greetings to everybody's from Red Sox nation and welcome to our call today. Joining me here in Watertown is Elizabeth Boland, our Chief Financial Officer. And we will begin today's call, as usual, with Elizabeth taking us through the Safe Harbor statement.

Thanks David. Hi to everyone.

Our earnings release went out over the wire after the close of market today, and is also available at our website, BrightHorizons.com.

This call is being recorded and simultaneously webcast and a complete replay of the call is also available by either medium. Those wishing to access the replay via telephone can dial 973-341-3080 with PIN code 5270306, while the webcast will be available at our website under the investor relations section.

In accordance with Regulation FD we use these types of conference calls and other similar public forums to provide the public and investing community with timely information about our business operations and financial performance, along with our current expectations for the future. We adhere to restrictions on selective disclosure and limit our comments to items previously discussed in these forums.

Certain non-GAAP financial measures may also be discussed during the call, and detailed disclosures relative to these measures are included in our press release, as well as in the investor relations section of our website.

The risks and uncertainties that may cause future operating results to vary from those we describe in our forward-looking statements include our ability to execute contracts for new center commitments, to enroll children, to retain client contracts and to operate profitably abroad; also, the effect of governmental tax and fiscal policies on employers considering worksite child care; and thirdly, the capital investment decisions and employee benefit decisions that such employers are making.

Lastly, as investors in the Company you should know that the new Sarbanes-Oxley regulations have involved a substantial investment in time and overhead resources over the last 12 to 18 months at all levels in the Company. We're working hard to complete all the required work in time to make meet the deadline set out by Section 404 of the Sarb-Oxley regulations, but much of the interpretive guidance is still being developed, adding to the challenges involved in completing the work.

The specific risk factors associated with our business are detailed in our SEC filings, including our Form 10-K filed in March of 2004.

Now, back to Dave.

Thanks, Elizabeth, and welcome again to everybody on the call. I will begin today with a review of the numbers, followed by some operating highlights of the recent quarter. I will then talk a bit about the key factors driving our performance before I turn it back over to Elizabeth for a detailed look at the third quarter's numbers, as well as a preliminary look at how we see 2005 shaping up.

Here's a quick recap of the numbers. Revenues of 139 million was up 18 percent over last year, while net income rose 34 percent to 6.8 million, resulting in earnings per share of 49 cents, up 32 percent over last year.

As you can see, this was another strong quarter for us. We added 31 new centers during the quarter and closed 1 for a net of 30. These centers span a range of industries -- education, manufacturing, health care, financial services and technology -- and are geographically spread throughout our network in the US and the UK.

Included in this mix of new centers this past quarter was the addition of the network of the UAW-Ford family centers across 11 states that we announced during our second quarter call. You may recall that on July 1st we assumed management of a total of 26 new programs, 8 of which are co-located in sites where we had already operated a child care center for the UAW-Ford Ford client. The remaining 18 sites are new to our network and are counted as new center additions this quarter.

This quarter we also welcomed our sixth center for USAA in Phoenix, our second center for the Cambridge University in England and centers for new clients, including Symbol Technologies on Long Island and the Virginia Mason Medical Center in Seattle, just to name a few. In addition we opened 2 new office park consortium models this quarter, 1 here in the Boston area and another 1 in Northern New Jersey.

As you know, the third quarter normally reflects a dip in earnings performance due to the modest seasonality in our business. Our overall enrollment declines in the summer months as our older preschoolers enter elementary school. We rebuild our enrollment over the fall. While this remains a normal cycle in our business, it was somewhat more muted this year by the positive enrollment trends that we continue to see in both our mature class of centers and in the immature centers ramping up during their second and third years of operation.

In addition, our strong operating performance this past quarter mirrors the same factors that have contributed to our out-performance all year. These include a combination of a slightly heavier new center mix of acquisitions and transitions of management, our ability to increase tuitions slightly ahead of average annual wage increases, and an overall disciplined cost management.

Looking ahead I want to outline 2 major drivers impacting our business -- first, the operational and financial performance of our base business; and second, the pace of our new center growth.

Currently we're seeing encouraging signs with respect to our existing base of centers that gives us confidence in our ability to maintain our growth trends while modestly improving our margins over time. These indicators of operating strength include solid incremental enrollment at the margin; competitive pricing with a 4 to 5 percent tuition increase this year and expected to continue into 2005, slightly ahead of our expected annual average wage increases; costs management as we continue to provide high-quality care and early education and make needed investments in programs, training and infrastructure, but careful as always to manage our overall expenses in tandem with the growth of the business; and lastly, our ability to continue to successfully integrate high-quality and financially strong transitions of management and acquisitions into our network in addition to our consistent organic new center growth.

Speaking of growth, I want to reiterate what I have said to you now for the past few quarters. We continue to see an up-tick in our overall prospecting and sales activity with employers. Specifically I'm encouraged to see more activity with cyclical industries as compared with this time last year. It's important for me to continue to point out that while this is encouraging, given the length of our sales cycle any resulting effects of this activity will not have much of an impact on us until 2006 and beyond.

We're also seeing more activity with our existing clients. We now have 40 clients for whom we manage more than 1 center location. In total they now represent 220 or 40 percent of our total center base. This has doubled over the last 5 years. If you look at our overall client base that have 1 or more sites with us, we estimate that there are more than 3000 locations with the potential to be future child care sites. We've recently dedicated several new sales and account management resources specifically focused on working with our growing, existing client base.

On the new business front, the up-tick in activity with more cyclical prospects is complemented by ongoing strength in the health care and hospital sector driven by the nursing crisis, as well as in higher education. We also remain focused on outsourcing or transitioning worksite child care centers that are either self-managed or managed by another provider. There are roughly 1000 to 1500 of these opportunities across the country, and they will continue to be a strong part of our growth mix in 2005 and beyond.

Our pipeline of committed projects remains steady in the 50s, even as we continue to open new centers. The pipeline is diverse both in the makeup of industries and in the geographic spread of center locations.

As we look ahead into 2005 and beyond, we also see a continued opportunity to execute on acquisitions that meet our stringent criteria for quality and financial performance. We have proven our ability to successfully integrate new acquisition partners both here in the US and in Europe over the years. Acquisitions have served us well as entry points into new markets and have added strength in places where we already operate. Over the course of our history, Bright Horizons has grown approximately 70 percent organically and 30 percent through acquisitions. I would expect that our future growth over time will approximate this same mix.

Now let me update you on the top-and-bottom-line guidance for the rest of this year and give you an early look at 2005.

Given our performance to date and our outlook for the fourth quarter, we're projecting revenue growth for 2004 of 16 to 17 percent and are raising our earnings per share projections for the full year to a range of $1.91 to $1.93. As we look ahead to 2005, we expect revenue growth to continue in the mid-teens. And we expect to continue to improve our operating margins once again next year, however believe that an improvement of 20 to 40 basis points will be more indicative of what our year-over-year performance will be in 2005 and beyond. Therefore, we expect to achieve 2005 earnings per share growth approximating 20 percent. Elizabeth will add more color to this guidance in a few minutes.

Finally, before I turn it over let me share with you some perspective on the underlying factors that continue to drive our success.

2 weeks ago I attended the reception in New York City for this year's 100 best companies for working mothers, as recognized by "Working Mother Magazine", once again this year, over half the list of Bright Horizons' clients, including 9 of the top 10. This list serves as a benchmark for employers for best practices around attracting, promoting, retaining, and maximizing the productivity of working mothers. As a class, women with children under the age of 6 have been the single fastest-growing segment of the American workforce since 1980.

Now some will point out that with more than 70 percent working today, the year-over-year growth numbers have slowed down somewhat over time. While this is true, the fact remains that we now have an economy that's dependent on the contribution of working mothers in order to continue to grow and thrive.

When you couple this reality with the sheer lack of quality childcare and early education that's been designed to meet the needs of working families across all the states and countries where we operate, you have the key underlying factors that have and will continue to drive our success going forward. As we emerge from the soft economic climate of the past few years, we do so with greater confidence in long-term viability of our business model and with greater strength as an organization, having continued to consistently invest in the people, systems, curriculum, and training to better secure our future.

Now let me turn it over to Elizabeth to give you more insight into the numbers before we get ready for questions and answers.

Again, to set the stage for the financial discussion, revenue of 139 million was up 21 million or 18 percent for the third quarter over that of 2003. Operating income in the quarter increased 33 percent to 11.6 million, while net income rose nearly 2 million to 6.8 million. Earnings per share of 49 cents a share is up 32 percent from the 37 cents we reported for the third quarter of '03 on a 3 percent increase in weighted average shares outstanding.

The 18 percent revenue growth was driven by 3 main components -- growth in the number of centers we manage, additional enrollment in ramping as well as mature centers, and price increases. These increases were offset by the ongoing effect of our cost plus contracts, where revenue growth has been impacted over time by client decisions to operate with a more efficient cost structure. In these situations the portion of our revenues that is derived from operating subsidies decreases, although we earn the same fixed return for our management services.

Growth from new centers includes the effects of centers added since this time last September, including the year-over-year impact of our Marin Day Schools management contract added in October of '03, as well as the 15 centers we have added in the UK, including the 9 center acquisition of Child & Co. in June 2004, as well as the family centers for the UAW-Ford previously mentioned in Dave's remarks. We would expect our revenue growth in the fourth quarter of 2004 to return to the mid-teens level as the MDS centers contributed to the first time in the fourth quarter of '03.

We've talked with you over the last couple of quarters about enrollment strength in 2004, and this quarter is performing consistently with earlier in the year. We continue to see good enrollment ramp in our maturing class of centers, as well as modest growth of 1 to 2 percent in our mature center base.

Average tuition, the final component of top-line growth, are up 4 to 5 percent over last year.

The results of all these factors is that center margins for the quarter increased 130 basis points over last year, although due to the effects of our summer seasonality Dave referenced, center margins are lower sequentially than the second quarter of this year.

As we have said over the last several quarters, slightly stronger enrollment helps drive operating efficiencies at the center level. Contributions from new centers and acquisitions also contribute to margin improvement.

We've done well to keep tuition increases at or ahead of wage increases. Being able to carefully manage tuition rate increases, which typically happen once a year, and wage increases, which occur throughout the year, is at the heart of our operating success. As you all know, labor pressures are likely to escalate as the economy rebounds, and we are therefore watching these metrics closely. That said, we have not yet seen unusual increases in these costs at this stage.

Overhead for the quarter as a percentage of revenue was up slightly in the third quarter of '04, 7.9 percent versus 7.7 percent in '03 as incremental spending for Sarbanes-Oxley compliance has and will continue to offset the modest overhead leverage we would have otherwise seen this year.

As we look ahead, we believe we can appropriately invest in our operations growth and systems infrastructure, and also leverage overall spending across our growing base of operations. We would, therefore, expect that overhead as a percentage of revenue would again begin to trail down in future years.

Amortization of identifiable intangible assets increased nearly 300,000 from last year, reflecting the run rate of acquisitions made since September of '03. We now expect amortization to approximate 1.2 million for the year as the effect of 2003 and 2004 acquisitions come into the mix.

Our strong financial performance so far this year has driven a 29 percent increase in EBITDA, or earnings before interest, taxes, depreciation and amortization, to approximately 43 million for the 9 months, while capital spending totals 8 million through September. At this point we're now projecting capital spending for the year to total 14 to 16 million.

Lastly, we ended the quarter with approximately 42 million in cash.

As usual, I will end my quarter review with a few operating statistics. At September 30th, we operated 555 centers with the capacity to serve 61,500, having added 30 net new centers during the quarter. This capacity statistic does not include any amounts for the 18 new UAW-Ford family center program. Although they contribute at levels similar to a small backup center, they have no comparable capacity measure due to their operating characteristics.

The center mix remains at 60 percent profit and loss and 40 percent cost plus contracts.

Excluding these 18 UAW Ford family center programs the average per center capacity now approximates 115, with US centers averaging 128 capacity per location and European centers averaging 52 capacity per location.

Let me now expand on the guidance that David previewed for you. We expect to end the year reporting revenues of approximately 550 million, reflecting top-line growth for 2004 of 16 to 17 percent, consistent with our previous guidance. We project we will be operating approximately 560 centers at year end. We are looking for operating margin expansion in the range of 90 to 100 basis points for the full year, and as a result have moved EPS projections up to $1.91 to $1.93 for the full year, with the last quarter guidance at 49 cents to 51 cents.

Looking beyond 2004, we would expect to sustain the operating fundamentals that have driven past financial results in our base business. And we see good visibility for our targeted growth in 2005 and beyond based on our pipeline of new centers scheduled to open in Q4 and next year. We have not yet completed our detailed budget process for '05, but currently project revenue growth for next year to continue in the mid-teens, in the 15 to 17 percent range. Given the level of margin expansion this year and last, we would expect further improvement in '05, but at a more modest level, with operating income expanding 20 to 40 basis points. With a consistent tax rate and outstanding shares moving up to 14.25 million, we are projecting earnings per share for the full year in '05 to increase approximately 18 to 22 percent to $2.25 to $2.33 for the full year. For the first quarter of '05 we're currently estimating EPS in the range of 52 to 54 cents a share.

With that we will open the call for questions. We're ready for the first caller.

(OPERATOR INSTRUCTIONS) Bob Craig, Legg Mason.

Congratulations on the quarter. Dave, you mentioned earlier what you have said in the past in terms of additional activity in the early-stage prospects. Can you quantify that on a year-to-year basis? Is that still around 10 percent up year-to-year?

Yes, the up-tick is about 10 percent, which is what I said last quarter.

Are there any other opportunities that are materializing in the K through 12 area? And could you update us on existing operations there?

I can. We are very encouraged by the performance of our existing 6 elementary schools. And now we have about a year under our belt with the latest group that we acquired in Michigan, and we feel really good about not only the outcomes that they're achieving with students, but sort of our ability to operate those schools well, make some improvements, and equally as important continue to have strong enrollment. So the fall enrollment is strong across our grouping of schools.

To the point now where we are actively evaluating -- I will call it 2 sets of opportunities, Bob. The first is expansion in existing markets where we operate schools today. We're in 3 places, as you know -- Michigan, greater Michigan or Oakland County Michigan, up in the northern part of Seattle and Bellevue and Redmond, and then in South Florida and West Palm Beach. So we are actively looking at expansion in existing markets. And then we're also looking at potential for movement into new places. But as I have said before in earlier calls, our approach to expansion of schools will be a careful 1. I fully expect to continue to add schools to the network, but I don't think it will be a rapid expansion.

Dave, is that likely to be mostly acquisition-driven or greenfields or both?

I think in existing markets it's more likely to be greenfield than it would be acquisition. And I think the converse would be true in new markets, although I would not count anything out.

Similar size to the units that you're now operating or larger?

I think the lesson that we've learned from our acquisition in Detroit -- or in Michigan is we feel like having them slightly larger than the 1 we opened in Seattle years ago is the better way to go, just from what you can achieve from economies of scale in terms of resources, the financial performance of school, the kind of enrichment programs that you can do, all those things that size affords you. So our school in Seattle has been chock full since we opened it with a waiting list. And I think the 250 or more student mark would be kind of where you would see us in the future.

You have indicated in the past I think a percentage capacity on wait list is around 15 percent. Has there been any trend change there at all?

There hasn't been a significant change in wait list. I think the comment that we've been putting out there for folks is that the base enrollment has been strong in the mature centers. And so how that plays into the wait list is essentially that we're able to draw off of the wait list in an effective way and enroll rather than have people waiting to get into centers. So no real movement there. But as we have said on past calls, we don't roll that up into a consolidated number because it's a very local measure.

Last question and then I will turn it over. Dave, I think I've asked you this question before, but I think decade-to-date your margins or operating margins will be up somewhere in the neighborhood of 300 basis points.

Decade-to-date?

Decade-to-date.

You have followed us for a while.

The question is where do you think those margins can ultimately trend given your current business model.

I think that the way -- obviously we've had to rethink this a little bit given the out-performance that we've seen in the past few years, which we've reached -- we're very proud of what we've been able to achieve. And we've achieved it sort of in step with maintaining and improving the quality of our services, which is what makes us even more proud of what we've accomplished.

I think what you have seen in the past few years in terms of the out-performance is more than what we expect there to be on an ongoing-basis going forward. And as we said earlier, we think the 20 to 40 basis points of margin improvements is in line with what you might expect for the next few years.

Great. Thanks a lot.

Derek Johnston, Banc of America Securities.

Good afternoon, Dave and Elizabeth. Congratulations on a great quarter. A couple questions here. The first -- it looks as though this is just the second time in history where you achieved gross margin improvement of 130 basis points or better, and they happen to be the past 2 quarters. You have talked a bit about where you have seen savings. But maybe specifically what began to manifest in the second quarter? And can we attribute some of that improvement to the acquisitions in the past 9 months?

I think you can -- there are a few factors that I think have contributed to the out-performance. Certainly in any given point in time when acquisitions hit us and force a more heavier weight in our overall growth mix in any given year or any given point in time, that's going to have an effect.

But I think that the other things that we've talked about earlier have equal effects, which are our ability to now consistently have been able to price slightly ahead of what the average wage increases have been and to have that stick now for a while has caught up. I think our ability -- overall cost and management and management of the appropriate level of costs in each center and across the network I think has really made a difference. So I think it is really the sum total of all those factors, both in terms of the cost control side and the slightly heavier mix.

And then lastly, the addition -- what really helps too is the incremental enrollment that we've experienced now consistently on the margin. As you know, in our model a modest up-tick in that enrollment where it's gone, 1 to 2 percent, has a big effect on the bottom line, because once we get to a certain level of staffing in our centers, you don't need to add incremental staff to serve and incremental few children on the margin. So I think that that's been a big contributor as well.

And on that, on enrollment per center, have you noticed any -- have there been many changes at all in your international centers enrollment per center, excluding of course the Child & Co. which I know are double your UK size?

I think Child & Co. did 2 things. First, it obviously has a big effect on our capacity because in those 9 centers they were bigger centers. That's 1 of the things that attracted us; they had some good operating experience managing centers that were larger on average than what we see across the UK. And that's part of our plan. We've had good experience over many years here managing larger and larger centers and still managing to do that well. And so Child & Co. improved that.

And then what we're seeing happening in the UK, and in Ireland for that matter, is then when we sell new business, when we work with a client to develop new worksite child care center, in general it tends to be larger when it's developed today, obviously, than it would have been with some of the centers that we acquired that we developed 5 or 10 years ago. So the new business, the stuff that we're doing new, will hopefully continue to move the needle in terms of larger capacity on average per center in the UK.

Just 2 other quick ones. I may have missed it; did you mention the contribution from acquisitions to revenue in the quarter? I guess in the past there would have been an aid from Marin Day, Child & Co. and UAW-Ford.

Right. We have talked in the past about Marin Day as a contributor of about 1 million a month or so. It is 3 million a quarter. And the most recent acquisition of Child & Co. is a little bit shy of that, on a pace of slightly less than 1 million a month.

The last 1 would be you talked about I guess your center -- your pipeline shifting maybe to more cyclical industries. Can you give us that update on your -- I think it's the one -- you either provide the pipeline now or the centers by industry?

We actually had made a change in what we would provide in terms of pipeline guidance to do it once a year. And on actual side, I actually looked at that statistic and it hasn't moved measurably at all; 1 percentage point here and there between industries this quarter.

Qualitatively we can say year-over-year pipeline that we are seeing may be a little bit of a move towards cyclical industries?

Yes. I think what Dave was referencing is that the commensurate up-tick isn't at the expense of anything; it's just that we're seeing an up-tick in interest in the pipeline prospect list in more of the cyclicals.

Super. Thanks so much.

Bobby Fischer (ph), Harris Nesbitt.

Good quarter and congrats on games 1 and 2 also.

Thanks all the way around. We appreciate the support, particularly from New Yorkers.

On the pipeline, I know you're not going to -- not much has changed. But I was wondering is there a difference in margins depending on the industry or is it all the same margins across the board?

It's actually less driven by the industry than it is by the contract type.

Right, whether it is cost plus --

We've seen that it's more cost plus-driven versus bottom line than industry specific because the cost metrics are not different on the child care side depending on the industry.

So are any industries more prone to the cost plus or the profit loss -- P&L side or --?

I wouldn't characterize it as industry again. What I would say is that as we build out centers for our existing clients, the new centers tend to follow the same structure as the first 1 or the second 1. So that would be the only factor that would contribute to it.

Did you provide same center enrollment growth?

When we talk about 1 to 2 percent enrollment growth in our mature base, that's reflecting that on top of price increases of the 4 to 5 percent range.

Can you quantify your Sarbanes-Oxley costs at all?

It's probably contributing 20 basis points to our overhead rate.

Could you estimate how long you see that continuing?

Well, we would expect a little bit of tapering off next year because there are some onetime costs incurred as we work through the implementation this year. But in terms of our own planning, we're not really scaling that back too much in our overall model.

So you see some continuation of -- like most companies, some continuation of (multiple speakers)

Yes. It's moving more into the base than it is just a one-off, although it's not a one-for-one.

Do you know how much of the -- is it 50 percent, 60 percent moving into the base?

I would say that it's somewhere between 50 and 75 percent moving into the base.

I appreciate it. Thanks a lot.

Jack Sherk (ph), SunTrust Robinson Humphrey.

Good afternoon. I was just wondering in regards to the 30 net new centers added during the quarter, after you back out of 18 from the UAW, were those other 12 acquired or were they greenfield? Or what was the breakdown between those?

What we have in our mix of new center additions every quarter is components of small acquisitions, transitions, greenfield, new clients, old clients. And we've made a practice of describing sort of larger individual components of that. But it's some of all of those in the mix, other than the UAW-Ford. But we don't talk about individual center adds except for those that are cited in the release.

Thank you very much.

Brandon Dobell, Credit Suisse First Bank.

On the backup part of your business, I haven't heard you guys talk about that in a while actually. I was wondering if I could get an update in terms of numbers there, as well as opportunity. In particular I want to get your thoughts on what it might look like overseas for the backup opportunity, or if that is an indicator of how that market is progressing relative to the US market.

We have 37 dedicated backup centers now under our management with a few underdevelopment in the pipeline. And so we expect to continue that a few into 2005 and beyond. I would say that there's still a good activity, consistent with the rest of our business, in the backup area. And I think that both for dedicated backup centers, but also we find ourselves now with probably -- and I'm just ballparking the number -- probably 60 or 70 of our full-service centers also having dedicated backup room resident in the center. So it is both a full-service center backup center.

So as a need, I think it continues to grow, even beyond what the numbers of dedicated backup centers suggests. And that's because backup care tends to meet the needs of a wider -- an even wider range of any employer's workforce in that it serves children up to the age of 12 and serves people who are using all different types of child care, including people who have stay-at-home parents. So having that service, I think companies are finding to be an important thing.

And we opened what I believe to be the first dedicated client-sponsored backup center in London 3 years ago for a major investment bank. And it's gotten a lot of attention over there. We've sold a number of backup spaces into our existing consortium centers in the London area. And we do have some interest from other employers, both in England and in Dublin and Edinburgh and some other major cities in developing backup centers in the future.

I appreciate that. Do you think that the decision to do a backup center is impacted by the economy at all? Or was it really there is such a different approach that it doesn't matter if the economy is good, bad or indifferent?

I don't think the decision to do a backup center is any different than the decision to do a full-service center or any other program. I think if a company has economic factors that are weighing into their decision, that's going to impact backup, full-service, whatever. So I don't really see that backup being any different than the way I would answer that for any one of the services that we offer.

And switching gears a bit back to the elementary opportunity, at the schools that you have, do you offer after school programs, tutoring, things like that; programs that are more geared towards some of the "No Child Left Behind" activities? Or is it just a straight school day and that's it?

No. We offer before and after school. I should say we after school at every school, but -- for the majority of them, and then tutoring services at some of them, and obviously other enrichment programs as well in addition to just tutoring. So I think there's a small opportunity for some of the "No Child Left Behind" opportunity, but I would characterize it as modest at best in terms of our mix of schools.

So most of the -- if those after school programs are a separate fee, that would be just regular private pay versus any kind of state money?

The good majority of parents are paying us for after school care.

I appreciate it. Thanks a lot.

(OPERATOR INSTRUCTIONS) Bob Craig, Legg Mason.

Just a couple of follow-ups. Dave, what's the size of the sales force now? And what kind of expansion plans do you have there as you look out into '05?

We just added a few new resources. There are 24 direct kind of quota-driven salespeople now on our team. And we're still finalizing our budget for 2005, but I would expect that if we talk this time next year we may have made a couple of more investments.

What's the likelihood in '05 of adding a new geographic region to the mix?

When you say geographic region you're referring to country?

Country.

I would say the likelihood of adding a new country in 2005 is virtually 0. I think we have our hands full with trying to get ourselves properly integrated in the UK and Ireland, and kind of set ourselves up to be the same kind of -- to have the same kind of leadership position that we have here. And we're investing in that, as you know. And taking our eye off that at this point doesn't seem likely.

What's the timing of your next price increase?

We typically raise price -- it is center-driven. Most centers increase in September. The next round of centers that aren't in September typically increase in January, although there's a handful that do it in other months. So we have just had a price increase for probably just over the majority on our centers in September.

Great. Thanks.

There are no further questions at this time.

Thank you, and thank everybody on the call. And as usual, we're here to answer any questions and hope to see you all on the road at some point in the near future. Thanks again.