Foundational Education Group Inc. (d/b/a Teaching Strategies)

Overview Key strengths Key risks Recession resilient business supported by largely mission-critical offering. Expected softness in profitability metrics in 2022. Rising secular tailwinds in the early childhood education (ECE) market. Small scale in a relatively niche and fragmented market. Significant customer and geographic diversity Financial-sponsor ownership may preclude sustained deleveraging. The company's observed revenue for fiscal year 2021 and the first half of 2022 came in slightly below our expectations, predominantly due to disruptions in the education end market. Specifically, Teaching Strategies' performance in the second half of 2021 was hampered by the spread of the delta variant of the coronavirus, which led to a wave of facility closures and shifted school districts' attention away from curriculum spending. The company

...We project sales will increase by the mid-teens percent area for 2022, although this is somewhat weaker than our original expectations. The company's observed revenue for fiscal year 2021 and the first half of 2022 came in slightly below our expectations, predominantly due to disruptions in the education end market. Specifically, Teaching Strategies' performance in the second half of 2021 was hampered by the spread of the delta variant of the coronavirus, which led to a wave of facility closures and shifted school districts' attention away from curriculum spending. The company continued to face challenges related to the spread of the omicron...

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