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Nord Anglia Education Reports First Quarter FY2017 Financial Results

January 24, 2017 6:00 AM EST

HONG KONG, Jan. 24, 2017 /PRNewswire/ -- Nord Anglia Education, Inc. (NYSE: NORD), the world's leading premium schools organization, today announced financial results for the first quarter of fiscal 2017, the three month period ended November 30, 2016.

First quarter FY2017 highlights (compared to first quarter FY2016)

  • Average full time equivalent students (FTEs) increased 7.8% to 36,934
  • Revenue increased 6.9% on a reported basis and 8.5% on a constant currency basis to $261.0 million
  • Adjusted EBITDA decreased 1.4% on a reported basis and increased 0.4% on a constant currency basis to $63.3 million
  • Adjusted Net Income increased 0.4% to $26.0 million
  • Adjusted EPS was unchanged at $0.25

Andrew Fitzmaurice, CEO of Nord Anglia Education stated, "First quarter results were in line with our expectations and we are pleased with the positive trends and full-year outlook for the business. Our collaborations with The Julliard School and Massachusetts Institute of Technology (MIT) help our students develop the 21st century skills they need to thrive in a rapidly changing world and the expansion of these programs is an important initiative. Nord Anglia Education is also collaborating with UNICEF this year to raise awareness of the Global Goals for Sustainable Development to further benefit our students. In fiscal 2017, we are making a number of strategic investments that will further establish Nord Anglia Education as the leader in the global premium schools market and drive long-term shareholder value."

First quarter FY2017 results

Average FTEs increased 7.8% to 36,934 in the three months ended November 30, 2016 ("Q1 FY2017") from 34,255 in the three months ended November, 2015 ("Q1 FY2016").  Average capacity and utilization were 54,813 seats and 67%, respectively, in Q1 FY2017 compared to 48,998 seats and 70%, respectively, in Q1 FY2016.

Revenue increased 6.9%, or $16.8 million, to $261.0 million in Q1 FY2017 from $244.2 million in Q1 FY2016.  This increase was due primarily to higher revenues from premium schools, partly offset by the impact of the strengthening US dollar on our premium schools revenue and a decrease in other revenue. On a constant currency basis, revenue increased 8.5% in Q1 FY2017 from Q1 FY2016. Revenue per FTE decreased 0.7% to $7.0k in Q1 FY2017 from $7.1k in Q1 FY2016.

Gross profit increased 1.0%, or $1.0 million, to $97.1 million in Q1 FY2017 from $96.1 million in Q1 FY2016. Gross profit margin was 37.2% for Q1 FY2017 compared to 39.4% for Q1 FY2016. The reduction in gross profit margin for the three months ended November 30, 2016 was primarily due to the additional rent from the new campus opened in September 2016 for the British School of Houston, the new bilingual school opened in September 2016 in Shanghai and the impact of the sale and leaseback of three schools in North America, partially offset by increased FTEs across our schools and tuition fee increases in excess of inflation.  As expected, additional rent and property tax for the new Houston campus and the sale and leaseback were $4.9 million in Q1 FY2017.

Selling, general and administrative (SG&A) expenses increased 12.6% to $51.7 million in Q1 FY2017 from $45.9 million in Q1 FY2016. The increase in SG&A expenses was primarily due to the new schools opened in September 2016, greenfield school pre-opening costs in Abu Dhabi, Bangkok and Hong Kong, Global Campus development costs, Sarbanes-Oxley project costs and non-cash share based payments to members of management in the three months ended November 30, 2016.

Other gains increased by $20.9 million from a loss of $0.1 million for the three months ended November 30, 2015 to a gain of $20.8 million for the three months ended November 30, 2016.  In the three months ended November 30, 2016, other gains included $14.2 million of non-cash foreign exchange gains on intercompany balances and $6.6 million non-cash gains on financial assets including an $8.2 million gain on the cross currency swaps offset by a $1.6 million loss on embedded lease derivatives. In the three months ended November 30, 2015, other gains included $0.9 million of non-cash foreign exchange gains on intercompany balances and a $1.0 million loss on embedded lease derivatives and other options.

Adjusted EBITDA decreased 1.4%, or $0.9 million, to $63.3 million (24.3% Adjusted EBITDA margin) in Q1 FY2017 from $64.2 million (26.3% Adjusted EBITDA margin) in Q1 FY2016. On a constant currency basis, Adjusted EBITDA increased 0.4% in Q1FY 2017 from Q1 FY2016. As expected, Adjusted EBITDA includes $4.9 million of additional property expenses for the new Houston campus and as a result of the sale and leaseback. These higher costs offset the impact of growth in FTEs and tuition fee increases.

Net financing expense increased to $8.9 million in Q1 FY2017 from $2.2 million in Q1 FY2016. The increase was primarily due to an unrealized gain of $7.0 million for the three months ended November 30, 2016 compared to an unrealized gain of $14.0 million for the three months ended November 30, 2015 on the revaluation of the CHF 200.0 million bonds.

Adjusted Net Income increased to $26.0 million in Q1 FY2017 from $25.9 million in Q1 FY2016.

Balance Sheet and Cash Flow

During the three months ended November 30, 2016, cash used in operating activities was $71.1 million compared to $61.8 million for the three months ended November 30, 2015.  Cash used in operations increased by $13.3 million from $41.2 million for the three months ended November 30, 2015 to $54.5 million for the three months ended November 30, 2016. Interest paid decreased from $13.1 million to $11.7 million and tax paid increased from $3.6 million to $4.9 million for the three months ended November 30, 2015 and November 30, 2016, respectively. The reduction in interest paid for the three months ended November 30, 2016 was primarily from our revolving credit facility remaining undrawn compared to a drawn balance of $71.0 million in the three months ended November 30, 2015.

Cash used in investing activities was $46.8 million for the three months ended November 30, 2016 compared to $56.0 million for the three months ended November 30, 2015. The outflow for the three months ended November 30, 2016 includes $13.5 million deferred consideration for our schools in Vietnam and Cambodia and $24.1 million of capital expenditure in relation to the new Houston campus, the new China bilingual school in Shanghai and general maintenance capital expenditure. The outflow for the three months ended November 30, 2015 was due primarily to the $27.9 million final deferred payment for the Meritas acquisition and $28.7 million of capital expenditure.

Cash used in financing activities was $3.6 million for the three months ended November 30, 2016 comprised of $2.3 million in debt repayments and $1.3 million in dividend payments to non-controlling interests.  This compared to $66.6 million generated from financing activities in the same period in 2015 primarily from drawings on our revolving credit facility.  Cash and cash equivalents (excluding the bank overdraft on our notional pooling accounts) as of November 30, 2016 were $287.1 million, compared to $246.8 million as of November 30, 2015.

Repricing of Term Loan and Revolving Credit Facilities 

In December 2016, the Company successfully repriced our secured term loan facility and revolving credit facility. The term loans under the amended senior secured credit facilities bear interest based on LIBOR (subject to a 1.00% interest rate floor) plus a margin of 3.50% per annum, reduced from a margin of 3.75% or 4.00% per annum if the total net leverage ratio is greater than 4.0x.  The revolving loans under the amended senior secured credit facilities bear interest at LIBOR plus a margin ranging from 2.25% to 3.25% per annum (currently 3.00%) depending on the total net leverage ratio, reduced from a margin of 2.75% to 3.75%.

Fiscal 2017 Outlook

Nord Anglia Education is reiterating its previous outlook for fiscal 2017 revenue and Adjusted EBITDA and raising its outlook for fiscal 2017 Adjusted Net Income and Adjusted EPS to reflect the interest savings from the repricing of the term loan and revolving credit facilities. The Company now expects fiscal year 2017 Adjusted Net Income to range between $69-$74 million and Adjusted EPS to range between $0.66-$0.71 per share.

Nord Anglia Education's prior and revised outlook for fiscal 2017 are set out in the table below:

FY2017 Outlook

as of Nov. 29, 2016

FY2017 Outlook

as of Jan. 24, 2017

Revenue

$910 - $930 million

$910 - $930 million

Adjusted EBITDA*

$207 - $217 million

$207 - $217 million

Adjusted Net Income*

$67 - $72 million

$69 - $74 million

Adjusted Diluted EPS*

$0.64 - $0.69

$0.66 - $0.71

* See "Non-GAAP Supplemental Financial Measures" below for additional information.

 

For fiscal 2017, the Company expects diluted weighted average shares of approximately 104.5 million.

In March 2016, the Company put in place a series of cross currency swaps as a hedge against volatility in foreign exchange rates, in particular the RMB and the Euro. Based on current foreign exchange rates, the Company anticipates a cross currency swap receivable of approximately $3.0 million in Q4 FY2017. 

Including the impact from the cross currency swaps, the Company expects Q4 FY2017 Adjusted EBITDA to be in the range of $10-$15 million.

Conference Call Details

Nord Anglia Education will host an investor conference call today at 8:00 am ET.  Interested parties are invited to listen to the conference call by dialing the following numbers:

United States Toll Free:                             877.407.0784   International:                                             201.689.8560                                     

An audio replay of the conference call will be available through January 31, 2017 via the investor relations section of nordangliaeducation.com or by dialing the following numbers:

United States Toll Free:                             877.870.5176    International:                                             858.384.5517     Replay Conference ID:                               13639469

A live webcast of the conference call will be available via the investor relations section of nordangliaeducation.com and will be archived on the website.

Forward-Looking Statements

This press release includes statements that express our current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward looking statements".  These forward looking statements can generally be identified by the use of forward-looking terminology, including the terms "believe," "expect," "may," "will," "should," "seek," "project," "approximately," "intend," "plan," "estimate" or "anticipate," or, in each case, their negatives or other variations or comparable terminology.  These forward-looking statements include all matters that are not historical facts.  They appear in a number of places throughout this press release and include our fiscal 2017 guidance and statements regarding our intentions, beliefs or current expectations concerning among other things, anticipated school openings, our results of operations, financial condition, liquidity, growth prospects, strategies and the industry in which we operate.

By their nature, forward-looking statements relate to events that involve risks and uncertainties or that depend on circumstances that may or may not occur in the future.  We believe that these risks and uncertainties include, but are not limited to, those under "Risk Factors" in our most recent Annual Report on Form 20-F filed with the SEC.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, liquidity, growth prospects, strategies and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this press release.  In addition, even if our results of operations, financial condition, liquidity, growth prospects, strategies and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.  Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.  Any forward-looking statement that we make in this press release speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

Non-GAAP Supplemental Financial Measures

We use EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share, as supplemental financial measures of our operating performance. We define EBITDA as (loss)/profit for the period plus income tax expense, net financing (expense)/income, exceptional items, impairment of goodwill, amortization and depreciation, and we define Adjusted EBITDA as EBITDA adjusted for loss/(gain) on disposal of property, plant and equipment, share based payments, realised gains or losses on hedging agreements and other items. We define Adjusted Net Income as Adjusted EBITDA adjusted for depreciation, net financing expense, income tax expense, tax adjustments and non-controlling interests. We define Adjusted Earnings per Ordinary share as Adjusted Net Income divided by the weighted average ordinary shares outstanding for the period.  EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share are not standard measures under IFRS. These measures should not be considered in isolation or construed as alternatives to cash flows, net income, earnings per ordinary share or any other measure of financial performance or as indicators of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. We may incur expenses similar to the adjustments in this presentation in the future and certain of these items could be recurring. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share as presented herein may not be comparable to similarly titled measures presented by other companies. 

Nord Anglia Education is not able to provide a reconciliation of projected non-GAAP financial measures to expected reported results without unreasonable effort because of the inherent uncertainty in forecasting and quantifying some of the amounts necessary for a reconciliation, such as exceptional items (which include transaction and integration costs related to school acquisitions), other (gains)/losses (which include the fair value gains and losses on our various put/call options, embedded lease derivatives and unrealized foreign exchange movements on our intercompany loans) and finance expense adjustments (which include adjustments for unrealized foreign exchange gain/(loss) arising from the revaluation of our CHF200.0 million senior secured notes to US dollars).  

About Nord Anglia Education, Inc.

Nord Anglia Education (NYSE: NORD) is the world's leading premium schools organization. Our 43 international schools are located in China, Europe, the Middle East, Southeast Asia and North America. Together, they educate more than 37,000 students from kindergarten through to the end of secondary education.  We are driven by one unifying philosophy – we are ambitious of our students, our people and our family of schools. Our schools deliver a high quality education through a personalized approach enhanced with unique global opportunities to enable every student to succeed. We primarily operate in geographic markets with high foreign direct investment, large expatriate populations and rising disposable income. We believe that these factors contribute to high demand for premium schools and strong growth in our business.  Nord Anglia Education is headquartered in Hong Kong SAR, China. Our website is www.nordangliaeducation.com.

For further information, please contact:

Investors:    Vanessa Cardonnel    Corporate Finance and Investor Relations Director – Nord Anglia Education    Tel: +852 3951 1130    Email: [email protected]   

John Rouleau    Managing Director, Investor Relations – ICR     Tel: +1 203 682 8342    Email: [email protected]

Media:    Sarah Doyle    Head of Brand – Nord Anglia Education    Tel: +852 3951 1144     Email: [email protected]  

 

 

NORD ANGLIA EDUCATION, INC.CONDENSED CONSOLIDATED INCOME STATEMENT(Unaudited)(in $ millions, except share data)

Three Months Ended November 30,

2016

2015(1)

Revenue

261.0

244.2

Cost of sales

(163.9)

(148.1)

Gross profit

97.1

96.1

Selling, general and administrative expenses

(51.7)

(45.9)

Depreciation

(0.1)

(0.2)

Amortization

(4.6)

(4.6)

Other gains/(losses)

20.8

(0.1)

Exceptional expenses

(0.5)

(2.4)

Total expenses

(36.1)

(53.2)

Operating profit

61.0

42.9

Finance income

1.1

1.0

Finance expense

(10.0)

(3.2)

Net finance expense

(8.9)

(2.2)

Profit before income tax

52.1

40.7

Income tax expense

(12.1)

(8.4)

Profit for the period

40.0

32.3

Profit attributable to:

-       Owners of the parent

39.4

31.8

-       Non-controlling interest

0.6

0.5

Profit for the period

40.0

32.3

Earnings per ordinary share(2) (in dollars)

Basic

0.38

0.31

Diluted

0.38

0.31

(1) During the year ended August 31, 2016, we finalized the purchase price allocation accounting from the prior year, made voluntary presentation changes and made corrections of prior period errors, by adjusting the prior period information. The information included in this report on Form 6-K for the three months ended November 30, 2015 reflects these adjustments. For more information, see our annual report on Form 20-F filed with the SEC and our report on Form 6-K ("Prior Period Changes in Basis of Presentation and Correction of Errors") furnished to the SEC on November 29, 2016. 

(2) Earnings per ordinary share is calculated by dividing profit for the period attributable to owners of the parent by the weighted average ordinary shares outstanding for the period. For the three months ended November 30, 2016 the basic and diluted weighted average ordinary shares outstanding were 104.1 million ordinary shares and 104.3 million ordinary shares, respectively. For the three months ended November 30, 2015 the basic and diluted weighted average ordinary shares outstanding were 104.1 million ordinary shares. 

 

 

NORD ANGLIA EDUCATION, INC.CONDENSED CONSOLIDATED BALANCE SHEET(Unaudited)(in $ millions)

November 30,

August 31,

2016

2016

Non-current assets

Property, plant and equipment

325.6

328.5

Intangible assets

1,331.9

1,365.4

Investments in joint ventures and associates

0.4

0.5

Derivative financial instruments

3.8

-

Trade and other receivables

42.7

42.0

Deferred lease expense

30.2

30.6

Deferred tax assets

77.9

79.0

1,812.5

1,846.0

Current assets

Current tax assets

3.7

3.4

Inventories

3.4

4.3

Derivative financial instruments

2.7

-

Trade and other receivables

153.1

132.5

Deferred lease expense

1.6

1.7

Cash and cash equivalents (excluding bank overdrafts)

287.1

371.9

Assets held for sale

8.2

8.3

459.8

522.1

Total assets

2,272.3

2,368.1

Current liabilities

Trade and other payables

(124.0)

(140.3)

Interest-bearing loans and borrowings

(54.5)

(5.0)

Finance lease liabilities

(1.2)

(1.2)

Deferred revenue

(436.8)

(550.0)

Deferred gain

(0.2)

(0.2)

Provisions for other liabilities and charges

-

(0.0)

Current tax liabilities

(13.8)

(4.5)

(630.5)

(701.2)

Non-current liabilities

Interest-bearing loans and borrowings

(1,050.3)

(1,058.2)

Derivative financial instruments

(25.2)

(25.2)

Finance lease liabilities

(60.8)

(63.3)

Other payables

(49.0)

(49.1)

Deferred revenue

(7.8)

(8.0)

Deferred gain

(11.7)

(12.1)

Retirement benefit obligations

(41.2)

(48.9)

Deferred tax liabilities

(108.3)

(110.2)

(1,354.3)

(1,375.0)

Total liabilities

(1,984.8)

(2,076.2)

Net assets

287.5

291.9

Equity attributable to equity holders of the parent

Share capital

1.0

1.0

Share premium

736.0

736.0

Other reserves

6.9

6.9

Currency translation reserve

(139.3)

(91.7)

Shareholders' deficit

(321.8)

(365.7)

282.8

286.5

Non-controlling interest

4.7

5.4

Total shareholders' funds

287.5

291.9

 

 

NORD ANGLIA EDUCATION, INC.CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(Unaudited)(in $ millions)

Three Months EndedNovember 30,

2016

2015

Cash used in operations

(54.5)

(41.2)

Payment of loan/bond expenses

-

(3.9)

 Interest paid

(11.7)

(13.1)

 Tax paid

(4.9)

(3.6)

Net cash used in operating activities

(71.1)

(61.8)

Net cash used in investing activities

(46.8)

(56.0)

Net cash (used in) / generated from financing activities

 

(3.6)

 

66.6

Net decrease in cash and cash equivalents

(121.5)

(51.2)

Cash and cash equivalents at beginning of the period

 

371.9

 

225.9

Exchange losses on cash and cash equivalents

 

(10.1)

 

(4.3)

Cash and cash equivalents at the end of the period (including overdrafts)

240.3

170.4

Bank overdrafts

46.8

76.4

Cash and cash equivalents at the end of the period (excluding overdrafts)

287.1

246.8

 

 

KEY OPERATING DATA AND SUPPLEMENTARY FINANCIAL DATA

Key Operating Data

We use the following key operating metrics to manage our schools: full-time equivalent students ("FTEs"), capacity, utilization and revenue per FTE. We monitor FTEs on a weekly basis and the other operating metrics on a monthly, quarterly and annual basis, as we believe that they are the most reliable metrics for measuring the profitability of our schools. The table below sets out our key operating data for the periods indicated:

Three Months EndedNovember 30,

2016

2015

Full-time equivalent students (average for the period)(1)

China

5,888

5,744

China-Bilingual

446

-

China total

6,334

5,744

Europe

6,859

6,472

Middle East

5,620

5,282

Southeast Asia

8,219

7,321

North America

9,902

9,436

Total

36,934

34,255

Capacity (average for the period)(2)

China

9,242

8,926

China-Bilingual

2,250

-

China total

11,492

8,926

Europe

9,691

8,617

Middle East

6,187

5,851

Southeast Asia

12,561

12,097

North America

14,882

13,507

Total

54,813

48,998

Utilization (average for the period)(3)

China

64%

64%

China-Bilingual

20%

-

China total

55%

64%

Europe

71%

75%

Middle East

91%

90%

Southeast Asia

65%

61%

North America

67%

70%

Total

67%

70%

 

Revenue per FTE (in $ thousands)(4)

China

9.2

9.6

China-Bilingual

7.4

-

China total

9.1

9.6

Europe

9.2

9.5

Middle East

4.9

4.8

Southeast Asia

4.9

4.7

North America

7.2

7.0

Total

7.0

7.1

 (1)  We calculate average FTEs for a period by dividing the total number of FTEs at each calendar month end in the period by the number of calendar months in the period.

(2)  We calculate average capacity for a period as the total number of FTEs that can be accommodated in a school based on its existing classrooms at each academic calendar month divided by the number of months in such period.

(3)  We calculate utilization during a period as a percentage equal to the ratio of average FTEs for the period divided by average capacity for the period.

(4)  We calculate revenue per FTE by dividing our revenue from our schools for the period by the average FTEs for the period. 

 

 

Supplementary Financial Data

The following table sets forth certain supplementary financial data for the periods indicated.

$ millions

Three Months Ended

November 30,

% Variance

Reported

Constant

2016

2015

Currency

Revenue (segment)

Premium Schools

     China

54.2

55.3

(2.0%)

3.5%

     China-Bilingual

3.3

-

-

-

     China total

57.5

55.3

4.0%

9.8%

     Europe

63.0

61.8

1.9%

2.3%

     Middle East

27.5

25.2

9.1%

9.3%

     Southeast Asia

40.6

34.7

17.0%

15.5%

     North America

71.5

66.1

8.2%

9.4%

     Total Premium Schools

260.1

243.1

7.0%

8.6%

Other

0.9

1.1

(18.2%)

(8.0%)

Total Revenue

261.0

244.2

6.9%

8.5%

Adjusted EBITDA (segment)

Premium Schools

     China

22.9

23.3

(1.7%)

4.2%

     China-Bilingual

0.2

-

-

-

     China total

23.1

23.3

(0.9%)

5.2%

     Europe

14.9

14.5

2.8%

3.2%

     Middle East

6.7

5.5

21.8%

22.4%

     Southeast Asia

13.2

10.4

26.9%

25.7%

     North America

16.4

20.1

(18.4%)

(17.7%)

     Total Premium Schools

74.3

73.8

0.7%

2.8%

Other

0.0

(0.2)

(100.0%)

(100.0%)

Central and regional expenses

(11.0)

(9.4)

17.0%

21.3%

Adjusted EBITDA

63.3

64.2

(1.4%)

0.4%

Adjusted Net Income

26.0

25.9

0.4%

 

 

We use EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share as supplemental financial measures of our operating performance. We define EBITDA as profit for the period plus income tax expense, net financing expense, exceptional items, other losses/(gains), impairment of goodwill, amortization and depreciation, and we define Adjusted EBITDA as EBITDA adjusted for the items set forth in the table below. We define Adjusted Net Income as Adjusted EBITDA adjusted for the items in the table below.  We define Adjusted Earnings per Ordinary share as Adjusted Net Income divided by the weighted average ordinary shares outstanding for the period. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share are not standard measures under IFRS. These measures should not be considered in isolation or construed as alternatives to cash flows, net income, earnings per ordinary share or any other measure of financial performance or as indicators of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. We may incur expenses similar to the adjustments in this presentation in the future and certain of these items could be recurring. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share presented herein may not be comparable to similarly titled measures presented by other companies.   

 

Reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS

(Unaudited)

Three Months EndedNovember 30,

$ millions

2016

2015

Profit for the period

40.0

32.3

Income tax expense

12.1

8.4

Net financing expense

8.9

2.2

Exceptional items(1)

0.5

2.4

Other (gains)/losses(2)

(20.8)

0.1

Amortization

4.6

4.6

Depreciation

0.1

0.2

Depreciation in Cost of Sales

11.8

11.8

EBITDA

57.2

62.0

Gain on disposal of property, plant and equipment

(0.0)

(0.0)

Share based payments(3)

2.2

1.6

Greenfield pre-opening costs(4)

1.5

0.3

China Bilingual team establishment

0.3

-

Rollout of Juilliard Program(5)

0.6

0.3

Rollout of MIT collaboration(6)

0.4

-

Global campus expedition facility(7)

0.4

-

SOX implementation

0.5

-

Other

0.2

-

Adjusted EBITDA

63.3

64.2

Depreciation

(11.9)

(12.0)

Net Financing Expense

(8.9)

(2.2)

Financing Expense Adjustments(8)

(7.0)

(14.0)

Income Tax Expense

(12.1)

(8.4)

Tax Adjustments(9)

3.2

(1.2)

Non-Controlling Interest

(0.6)

(0.5)

Adjusted Net Income

26.0

25.9

Adjusted earnings per ordinary share(10) (in $)

Basic

0.25

0.25

Diluted

0.25

0.25

(1)  Exceptional expenses primarily relate to the acquisition of schools, including associated transaction and integration costs.

(2) Represents the fair value gains and losses on our cross currency swaps, various put/call options, embedded lease derivatives at our Chicago South Loop school and the British International School of Houston and unrealized foreign exchange movements on our intercompany balances.

(3)  Represents non-cash charges associated with share based payments to members of management.

(4)  Includes the pre-opening costs associated with the opening of new campuses in Abu Dhabi, Hong Kong, Bangkok and China Bilingual.

(5) Represents the costs associated with the development of dance and drama curricula as part of The Juilliard-Nord Anglia Performing Arts Program.

(6) Represents the costs associated with the roll-out of the MIT collaboration, which we launched in 10 schools in September 2016.

(7) Represents the final costs associated with the establishment of a new leadership expedition facility in Switzerland as part of Global Campus.

(8) Adjustment for unrealized foreign exchange gain arising from the revaluation of the CHF200.0 million senior secured notes to US dollar.

(9)  Represents the tax impact associated with the exclusion of certain costs including exceptional items and amortization in calculating Adjusted Net Income. The effective tax rate for the year used in calculating the tax impact is 25.1%, which is the estimated effective tax rate for fiscal 2016 excluding unrealized FX gains.

(10)  Earnings per ordinary share is calculated by dividing profit for the period attributable to owners of the parent by the weighted average ordinary shares outstanding for the period. For the three months ended November 30, 2016 the basic and diluted weighted average ordinary shares outstanding were 104.1 million ordinary shares and 104.3 million ordinary shares, respectively. For the three months ended November 30, 2015 the basic and diluted weighted average ordinary shares outstanding were 104.1 million ordinary shares.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nord-anglia-education-reports-first-quarter-fy2017-financial-results-300395445.html

SOURCE Nord Anglia Education, Inc.



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