View:
United States securities and exchange commission logo
December 29, 2020
Elizabeth Boland
Chief Financial Officer
Bright Horizons Family Solutions Inc.
200 Talcott Avenue
Watertown, Massachusetts 02472
Re: Bright Horizons
Family Solutions Inc.
Form 10-K for
Fiscal Year Ended December 31, 2019
Filed February 27,
2020
File No. 001-35780
Dear Ms. Boland:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2019
MD&A
Results of Operations, page 30
1. Please revise to
quantify factors to which changes are attributed. For example, you
disclose revenue growth
is primarily attributable to contributions from new and ramping
child care and early
education centers, expanded sales of your back-up care and
educational advisory
services, typical annual tuition increases of 3% to 4%, and
acquisitions, but do
not quantify these factors. Please consider providing such
quantification of
factors in tabular form with the remaining written narrative focused on
analyzing the reasons
for such changes. Please also tell us your consideration of
discussing and
analyzing results of operations for each of your reportable segments. Refer
to Item 303(a) of
Regulation S-K.
2. We note that under your
profit and loss models you retain the financial risk of operating
Elizabeth Boland
FirstName LastNameElizabeth Boland
Bright Horizons Family Solutions Inc.
Comapany29,
December NameBright
2020 Horizons Family Solutions Inc.
December
Page 2 29, 2020 Page 2
FirstName LastName
child care centers and that under your cost-plus model you receive a
fee from the
employer sponsor for managing/operating their center and may also
receive an operating
subsidy to supplement tuition paid by parents. Based on this, it
appears your revenue for
the full service center-based child care segment consists of tuition
from parents,
management/operating fees from employer sponsors, and operating
subsidies from
employer sponsors. We note from your Form 10-Q for the fiscal quarter
ended September
30, 2020 that you have experienced the impact of the COVID-19 pandemic
on your
business, which has substantially disrupted your global operations and
resulted in a 46%
decrease in full service center-based child care segment revenue.
The extent to which your revenue for this segment changed, or is at
risk of fluctuation,
due to changes in enrollment (i.e., tuition) is not clear. Please
expand MD&A to present a
separate table quantifying the amounts of each significant component
of revenues for this
segment and to discuss and analyze the reasons for material changes in
each component.
Refer to the requirements of Item 303(a)(3) of Regulation S-K.
Notes to Consolidated Financial Statements
Note 1. Organization and Significant Accounting Policies
Revenue Recognition and Deferred Revenue, page 52
3. Your disclosure here primarily explains the general accounting model
for revenue
recognition under ASC 606. Your disclosure in Note 2 - Revenue
Recognition
primarily explains the nature of your service offerings. Please
consider combining
these revenue policy disclosures and refocusing them to explain how
you measure and
recognize revenue for your various types of contracts with customers
so that the disclosure
is specific to you.
For example, in your disclosure on page 55 on full service
center-based child care, you
state revenue from fixed and variable fees for full service
center-based child care is
recognized over time as services are rendered. However, it is not
clear from
this disclosure to what fixed and variable fees you refer and what
specifically you mean
by over time (e.g., each month). Please also consider similar changes
to your critical
accounting estimates disclosure on page 38 and also include there the
significant
judgments and estimates involved in your accounting for contracts with
customers, if any.
4. We note from your disclosure on page 28 that under both the sponsor
and cost-plus
business models, the sponsor or employer funds development of the
facility, pre-
opening/start-up capital equipment, and ongoing maintenance and repair
costs. Please tell
us the accounting consequence to you from these transactions, if any.
5. We note from your disclosure on page 28 that under the cost-plus
business model,
you receive a fee from the employer sponsor for managing and operating
their center and
may also receive an operating subsidy to supplement tuition paid by
parents. We also
note that these contracts have a typical term of three to five years.
Please tell us how you
account for the management/operating fee and the potential operating
subsidy. In your
Elizabeth Boland
Bright Horizons Family Solutions Inc.
December 29, 2020
Page 3
response, please address whether the contractual rates for any of
these amounts vary over
time under the term of the contracts. Please also tell us what
generally causes operating
subsidies to be due to you, how such amounts are generally determined,
and how you
determine the amount and timing of recognition of such amounts.
General
6. We note that your certificate of incorporation provides that the Court
of Chancery of the
State of Delaware is the sole and exclusive forum for any
derivative action or proceeding
brought on behalf of the Corporation. Please tell us, and disclose
in future filings,
whether this provision applies to actions arising under the Exchange
Act and/or the
Securities Act. In this regard, we note that Section 27 of the
Exchange Act creates
exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created
by the Exchange Act or the rules and regulations thereunder. We also
note that Section 22
of the Securities Act creates concurrent jurisdiction for federal and
state courts over all
suits brought to enforce any duty or liability created by the
Securities Act or the rules and
regulations thereunder. If the provision applies to federal securities
law claims, please also
disclose in future filings that that investors cannot waive compliance
with the federal
securities laws and the rules and regulations thereunder.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Stephen Kim at 202-551-3291 or Lyn Shenk at 202-551-3380
if you
have questions regarding comments on the financial statements and related
matters. Please
contact Daniel Morris at 202-551-3314 or Erin Jaskot at 202-551-3442 with any
other questions.
FirstName LastNameElizabeth Boland Sincerely,
Comapany NameBright Horizons Family Solutions Inc.
Division of
Corporation Finance
December 29, 2020 Page 3 Office of Trade
& Services
FirstName LastName