Nord Anglia Education Reports Third Quarter FY2014 Financial Results
HONG KONG, July 16, 2014 /PRNewswire/ -- Nord Anglia Education, Inc. (NYSE: NORD), the world's leading premium schools organization, today announced financial results for the three months ended May 31, 2014, the third quarter of fiscal 2014.
Third quarter FY2014 highlights (compared to third quarter FY2013):
- Revenue increased 54.9% from $89.4 million to $138.5 million
- Revenue from premium schools increased 61.1% from $83.0 million to $133.7 million
- Adjusted EBITDA increased 60.6% from $28.0 million to $45.0 million
- Adjusted Net Income increased from $2.9 million to $14.7 million
Nine months ended May 31, 2014 highlights (compared to nine months ended May 31, 2013):
- Revenue increased 53.2% from $268.0 million to $410.5 million
- Revenue from premium schools increased 60.4% from $247.5 million to $397.0 million
- Adjusted EBITDA increased 57.4% from $80.4 million to $126.5 million
- Adjusted Net Income increased from $18.2 million to $38.3 million
"We are pleased to report strong operating and financial results for the third quarter of fiscal 2014, which demonstrate the continuing success of our organization," said Andrew Fitzmaurice, Nord Anglia Education CEO. "Our focus on delivering outstanding educational quality enables students to achieve academic, social and personal success and our students' standardized examination results continue to exceed UK and global averages. We have recently received our students' International Baccalaureate Diploma results for 2014 and our average diploma score has risen again, to 33.7 points from 33.0 points in 2013, which is significantly ahead of the global average of 29.8 points."
"We continue to strengthen our market leading position as we execute our growth strategy, and the acquisition of Northbridge International School Cambodia on July 10, 2014 is the most recent example of this. In June, we also celebrated the ground breaking of the British School of Chicago's second campus, which is scheduled to open in September 2015 with 1,100 seats of capacity. We are now looking forward to the start of the new school year in September 2014 and are particularly excited about the opening of our two new greenfield schools in Hong Kong and Dubai," Fitzmaurice continued.
Third quarter FY2014 results
Revenue increased by $49.1 million to $138.5 million in the third quarter of fiscal 2014 from $89.4 million in the same period in fiscal 2013. This increase was due to increases in full time equivalent students (FTEs) and tuition fees at our existing schools and the impact of our acquisitions in China, Europe, the Middle East, South East Asia and North America.
Our gross profit margin increased to 55.9% in the third quarter of fiscal 2014 from 54.1% in same period of fiscal 2013, largely due to the impact of tuition fee increases in excess of cost inflation and increased FTEs within our schools.
Adjusted EBITDA increased by $17.0 million to $45.0 million in the third quarter of fiscal 2014 from $28.0 million in the same period in fiscal 2013. Adjusted net income increased by $11.8 million to $14.7 million in the third quarter of fiscal 2014 from $2.9 million in the same period in fiscal 2013.
The average FTEs in the three months ended May 31, 2014 were 17,653, a 78.0% increase over the average FTEs in the three months ended May 31, 2013 of 9,920. Average capacity and utilization was 22,237 seats and 79% in the three months ended May 31, 2014 compared to 12,503 seats and 79% in the three months ended May 31, 2013.
Balance Sheet and Cash Flow
During the nine months ended May 31, 2014, net cash used in operating activities was $74.7 million compared to $45.5 million for the same period in fiscal 2013, with the larger outflow primarily being due to an increase in interest paid (up $31.8 million). Cash used in investing activities decreased from $105.6 million for the nine months ended May 31, 2013 to $40.2 million for the same period in fiscal 2014. During the nine months ended May 31, 2014, we invested $15.5 million (net of cash acquired) for the acquisition of subsidiaries and $25.0 million in capital expenditure, including on the refurbishment of our new school in Hong Kong and maintenance capital expenditure at our other schools. Net cash provided by financing activities was $81.0 million in the nine months ended May 31, 2014. Cash and cash equivalents as at May 31, 2014, was $138.2 million compared to $124.0 million as at May 31, 2013.
On March 31, 2014, we used the proceeds from our initial public offering and the issuance of a new $515.0 million senior secured term loan to discharge all obligations under the indentures governing our 10.25% senior secured notes and our 8.50%/9.50% PIK toggle notes, both of which were fully repaid as of April 14, 2014. Going forward, the refinancing will contribute to significant interest savings of approximately $41.0 million per year.
FY2014 Business Outlook
We are reiterating certain targets regarding our fiscal 2014 expectations, which reflect our results through May 31, 2014:
- Overall revenue in fiscal 2014 in the range of $468-$472 million
- Adjusted EBITDA in fiscal 2014 in the range of $125-$127 million
In addition, for the full fiscal year 2014, we estimate that our pro forma diluted weighted average shares will be approximately 97.9 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 dialling in using the following numbers:
United States/Canada Toll Free: 877 407 0784
International: +1 201 689 8560
An audio replay of the conference call will be available through July 30, 2014 by dialling the following:
United States/Canada Toll Free: 877 870 5176
International: +1 858 384 5517
Replay Conference ID: 13585711
A live webcast of the conference call will be available via the investor relations section of www.nordanglia.com and will be archived on the website for a limited time immediately following the call. A copy of this press release is also available on the web site.
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 statements regarding our intentions, beliefs or current expectations concerning among other things, our results of operations, financial condition, liquidity, prospects, growth, 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 registration statement on Form F-1 filed with the SEC. These statements include, among other things, statements relating to: our future market opportunities; our goals and strategies; our competitive strengths; our future results of operations and financial condition; our future business developments; and our acquisition and expansion strategy.
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 and liquidity, 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 and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this report, 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 and Adjusted Net Income 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 plus any loss/(gain) on disposal of PP&E, management fees paid to our sponsor, foreign exchange (gains)/losses, the EBITDA losses attributable to our loss-making start-up schools and share based payments. Adjusted EBITDA excludes EBITDA losses attributable to loss-making start-up schools that have been open less than three years. We consider this a more directly comparable supplemental financial measure for evaluating the performance of our business. We define Adjusted Net Income as Adjusted EBITDA less depreciation, net financing expense, income tax expense and tax adjustments for the impact of the exclusion of exceptional items and amortization in calculating Adjusted Net Income. Please refer to "Nord Anglia Education, Inc. Supplemental Financial Information" below for further detail.
EBITDA, Adjusted EBITDA and Adjusted Net Income are not standard measures under IFRS. EBITDA, Adjusted EBITDA and Adjusted Net Income should not be considered in isolation or construed as alternatives to cash flows, net income 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. EBITDA, Adjusted EBITDA and Adjusted Net Income presented herein may not be comparable to similarly titled measures presented by other companies.
About Nord Anglia Education, Inc.
Nord Anglia Education is the world's leading international operator of premium schools, serving students from kindergarten through the end of secondary school (K-12). We teach over 18,500 FTEs at our 29 premium schools in China, Europe, the Middle East and Southeast Asia and North America. 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.nordanglia.com.
For further information, please contact:
Investors:
Vanessa Cardonnel
Corporate Finance and Investor Relations Director - Nord Anglia Education
Tel: +852 3977 0791
Email: [email protected]
Kevin Doherty
Director, Investor Relations - Solebury Communications Group LLC
Tel: +1 203 428 3233
Email: [email protected]
Media:
Sarah Doyle
Communications Manager – Nord Anglia Education
Tel: +852 3977 0798
Email: [email protected]
NORD ANGLIA EDUCATION, INC. |
|||||||||
Three Months Ended May 31, |
Nine Months Ended May 31, |
||||||||
2014 |
2013 |
2014 |
2013 |
||||||
Revenue |
138.5 |
89.4 |
410.5 |
268.0 |
|||||
Cost of sales |
(61.1) |
(41.0) |
(185.8) |
(123.5) |
|||||
Gross Profit |
77.4 |
48.4 |
224.7 |
144.5 |
|||||
Selling, general and administrative expenses |
(34.8) |
(22.8) |
(99.7) |
(68.9) |
|||||
Depreciation |
(6.9) |
(2.4) |
(17.6) |
(7.4) |
|||||
Amortisation |
(2.4) |
(0.9) |
(7.3) |
(2.8) |
|||||
Exceptional expenses |
(94.3) |
(2.9) |
(96.8) |
(5.6) |
|||||
Total expenses |
(138.4) |
(29.0) |
(221.4) |
(84.7) |
|||||
Operating profit |
(61.0) |
19.4 |
3.3 |
59.8 |
|||||
Finance income |
0.3 |
0.4 |
1.4 |
1.6 |
|||||
Finance expense |
(13.7) |
(16.5) |
(47.8) |
(37.1) |
|||||
Net finance expense |
(13.4) |
(16.1) |
(46.4) |
(35.5) |
|||||
Profit before income tax |
(74.4) |
3.3 |
(43.1) |
24.3 |
|||||
Income tax expense |
(9.5) |
(6.4) |
(22.7) |
(18.7) |
|||||
(Loss)/profit for the period |
(83.9) |
(3.1) |
(65.8) |
5.6 |
|||||
Earnings per ordinary share(1) (in dollars) |
|||||||||
Basic |
(0.76) |
(0.02) |
(0.50) |
0.04 |
|||||
Diluted |
(0.76) |
(0.02) |
(0.50) |
0.04 |
|||||
(1) Earnings per ordinary share is calculated by dividing (loss)/profit for the period by the weighted average ordinary shares outstanding for the period. For the three months and nine months ended May 31, 2014 the basic and diluted weighted average ordinary shares outstanding were 110.2 million and 130.9 million ordinary shares, respectively. For the three and nine months ended May 31, 2013 the basic and diluted weighted average ordinary shares outstanding was 141.2 million ordinary shares. On completion of our initial public offering on March 31, 2014, we issued 21.8 million ordinary shares and all previously existing preference shares and classes of ordinary shares were converted into 75.9 million ordinary shares of par value $0.01 per share. |
NORD ANGLIA EDUCATION, INC. |
||||
May 31, |
August 31, |
|||
Non-current assets |
||||
Property, plant and equipment |
115.7 |
90.5 |
||
Intangible assets |
778.9 |
753.7 |
||
Investments in jointly controlled entities |
0.5 |
0.5 |
||
Trade and other receivables |
10.1 |
12.4 |
||
Deferred tax assets |
10.2 |
13.6 |
||
915.4 |
870.7 |
|||
Current assets |
||||
Tax receivable |
- |
1.0 |
||
Trade and other receivables |
66.4 |
83.2 |
||
Cash and cash equivalents |
138.2 |
171.1 |
||
204.6 |
255.3 |
|||
Total assets |
1,120.0 |
1,126.0 |
||
Current liabilities |
||||
Other interest-bearing loans and borrowings |
(32.2) |
(30.6) |
||
Trade and other payables |
(245.7) |
(360.5) |
||
Provisions for other liabilities and charges |
(0.2) |
(3.4) |
||
Current tax liabilities |
(7.0) |
(4.2) |
||
(285.1) |
(398.7) |
|||
Non-current liabilities |
||||
Other interest-bearing loans and borrowings |
(500.1) |
(630.4) |
||
Other payables |
(49.9) |
(20.1) |
||
Retirement benefit obligations |
(22.2) |
(22.2) |
||
Provisions for other liabilities and charges |
(5.3) |
(1.7) |
||
Deferred tax liabilities |
(33.1) |
(32.9) |
||
(610.6) |
(707.3) |
|||
Total liabilities |
(895.7) |
(1,106.0) |
||
Net assets |
224.3 |
20.0 |
||
Equity attributable to equity holders of the parent |
||||
Share capital |
1.0 |
67.5 |
||
Share premium |
597.9 |
256.5 |
||
Other reserves |
8.9 |
6.9 |
||
Currency translation reserve |
1.3 |
9.8 |
||
Shareholders' deficit |
(384.8) |
(320.7) |
||
Total shareholders' funds |
224.3 |
20.0 |
NORD ANGLIA EDUCATION, INC. |
|||||||
Three Months Ended May 31, |
Nine Months Ended May 31, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
Cash generated from operations |
31.4 |
29.5 |
10.3 |
7.0 |
|||
Interest paid |
(33.1) |
(17.2) |
(66.9) |
(35.1) |
|||
Tax paid |
(5.0) |
(6.8) |
(18.1) |
(17.4) |
|||
Net cash (used in)/from operating activities |
(6.7) |
5.5 |
(74.7) |
(45.5) |
|||
Net cash used in investing activities |
(25.9) |
(99.9) |
(40.2) |
(105.6) |
|||
Net cash from financing activities |
70.2 |
150.7 |
81.0 |
162.6 |
|||
Net increase/(decrease) in cash and cash equivalents |
37.6 |
56.3 |
(33.9) |
11.5 |
|||
Cash and cash equivalents at beginning of the period |
102.9 |
68.2 |
171.1 |
108.5 |
|||
Exchange (losses)/gains on cash and cash equivalent |
(2.3) |
(0.5) |
1.0 |
4.0 |
|||
Cash and cash equivalents at end of the period |
138.2 |
124.0 |
138.2 |
124.0 |
NORD ANGLIA EDUCATION INC. |
|||||||||||||||||||||||
Key Operating Data |
|||||||||||||||||||||||
Three Months Ended May 31, |
Nine Months Ended May 31, |
||||||||||||||||||||||
2014 |
2013 |
2013 |
2014 |
2013 |
2013 |
||||||||||||||||||
Actual |
Actual |
Pro forma |
Actual |
Actual |
Pro forma |
||||||||||||||||||
Full-time equivalent students |
|||||||||||||||||||||||
China |
4,859 |
4,121 |
4,121 |
4,828 |
4,067 |
4,067 |
|||||||||||||||||
Europe |
4,532 |
3,779 |
4,455 |
4,512 |
3,769 |
4,447 |
|||||||||||||||||
Middle East/South East Asia |
5,495 |
992 |
2,423 |
5,141 |
960 |
2,351 |
|||||||||||||||||
North America |
2,669 |
- |
2,469 |
2,642 |
- |
2,417 |
|||||||||||||||||
Sub-total |
17,555 |
8,892 |
13,468 |
17,123 |
8,796 |
13,282 |
|||||||||||||||||
Loss making start-up schools(2) |
98 |
1,028 |
1,099 |
97 |
1,001 |
1,070 |
|||||||||||||||||
Total |
17,653 |
9,920 |
14,567 |
17,220 |
9,797 |
14,352 |
|||||||||||||||||
Capacity (average for the period)(3) |
|||||||||||||||||||||||
China |
6,964 |
5,380 |
5,380 |
6,964 |
5,373 |
5,373 |
|||||||||||||||||
Europe |
5,322 |
4,423 |
5,175 |
5,322 |
4,419 |
5,156 |
|||||||||||||||||
Middle East/South East Asia |
6,191 |
1,200 |
3,291 |
5,858 |
1,200 |
3,291 |
|||||||||||||||||
North America |
3,280 |
- |
3,180 |
3,280 |
- |
3,180 |
|||||||||||||||||
Sub-total |
21,757 |
11,003 |
17,026 |
21,424 |
10,992 |
17,000 |
|||||||||||||||||
Loss making start-up schools(2) |
480 |
1,500 |
1,980 |
480 |
1,500 |
1,980 |
|||||||||||||||||
Total |
22,237 |
12,503 |
19,006 |
21,904 |
12,492 |
18,980 |
|||||||||||||||||
Utilization (average for the period)(4) |
|||||||||||||||||||||||
China |
70% |
77% |
77% |
69% |
76% |
76% |
|||||||||||||||||
Europe |
85% |
85% |
86% |
85% |
85% |
86% |
|||||||||||||||||
Middle East/South East Asia |
89% |
83% |
74% |
88% |
80% |
71% |
|||||||||||||||||
North America |
81% |
- |
78% |
81% |
- |
76% |
|||||||||||||||||
Sub-total |
81% |
81% |
79% |
80% |
80% |
78% |
|||||||||||||||||
Loss making start-up schools(2) |
20% |
69% |
56% |
20% |
67% |
54% |
|||||||||||||||||
Total |
79% |
79% |
77% |
79% |
78% |
76% |
|||||||||||||||||
Revenue per FTE (in $ thousands) (5) |
|||||||||||||||||||||||
China |
9.9 |
10.0 |
10.0 |
30.0 |
29.4 |
29.4 |
|||||||||||||||||
Europe |
8.8 |
8.5 |
8.1 |
26.6 |
26.5 |
25.1 |
|||||||||||||||||
Middle East/South East Asia |
4.6 |
5.5 |
5.4 |
13.8 |
15.7 |
15.1 |
|||||||||||||||||
North America |
7.4 |
- |
7.6 |
22.2 |
- |
21.6 |
|||||||||||||||||
Sub-total |
7.6 |
8.9 |
8.1 |
23.0 |
26.6 |
24.0 |
|||||||||||||||||
Loss making start-up schools |
9.6 |
3.9 |
4.3 |
28.0 |
13.2 |
14.2 |
|||||||||||||||||
Total |
7.6 |
8.4 |
7.8 |
23.1 |
25.3 |
23.3 |
|||||||||||||||||
(1) We calculate average FTEs for a relevant 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) Loss making start-up schools are schools that have been open less than three years and incur an EBITDA loss. In the three and nine months ended May 31, 2014 loss-making start-up schools include our school in New York. In the three and nine months ended May 31, 2013 on an actual basis, our loss making start-up schools include The British School of Abu Dhabi. In the three and nine months ended May 31, 2013 on a pro forma basis, our loss making start-up schools include The British International School of Abu Dhabi in addition to our school in New York. (3) 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. (4) 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. (5) 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 |
|||||||||||
$ millions |
Three Months Ended May 31, |
Nine Months Ended May 31, |
|||||||||
2014 |
2013 |
2013 |
2014 |
2013 |
2013 |
||||||
Actual |
Actual |
Pro forma |
Actual |
Actual |
Pro forma |
||||||
Revenue (segment) |
|||||||||||
Premium Schools |
|||||||||||
China |
48.0 |
41.2 |
41.2 |
144.7 |
119.5 |
119.5 |
|||||
Europe |
40.0 |
32.3 |
36.0 |
120.0 |
99.7 |
111.6 |
|||||
ME/SEA |
25.1 |
5.5 |
13.2 |
71.1 |
15.1 |
35.4 |
|||||
North America |
19.7 |
- |
18.8 |
58.5 |
- |
52.3 |
|||||
Sub Total |
132.8 |
79.0 |
109.2 |
394.3 |
234.3 |
318.8 |
|||||
Loss making start-up |
0.9 |
4.0 |
4.7 |
2.7 |
13.2 |
15.2 |
|||||
Total Premium Schools |
133.7 |
83.0 |
113.9 |
397.0 |
247.5 |
334.0 |
|||||
Other |
4.8 |
6.4 |
8.9 |
13.5 |
20.5 |
25.3 |
|||||
Total Revenue |
138.5 |
89.4 |
122.8 |
410.5 |
268.0 |
359.3 |
|||||
Adjusted EBITDA (segment) |
|||||||||||
Premium Schools |
|||||||||||
China |
24.7 |
21.0 |
21.0 |
71.0 |
60.4 |
60.4 |
|||||
Europe |
9.1 |
7.8 |
8.5 |
27.7 |
23.5 |
26.3 |
|||||
ME/SEA |
7.5 |
2.0 |
5.3 |
19.9 |
4.8 |
12.3 |
|||||
North America |
8.0 |
- |
7.3 |
23.7 |
- |
18.6 |
|||||
Total Premium Schools |
49.3 |
30.8 |
42.1 |
142.3 |
88.7 |
117.6 |
|||||
Other |
1.7 |
1.4 |
2.5 |
2.7 |
5.1 |
6.1 |
|||||
Central and regional expenses |
(6.0) |
(4.2) |
(6.6) |
(18.5) |
(13.4) |
(19.3) |
|||||
Adjusted EBITDA |
45.0 |
28.0 |
38.0 |
126.5 |
80.4 |
104.4 |
|||||
Loss making start-up schools |
(0.2) |
(0.3) |
(0.6) |
(0.4) |
(1.2) |
(2.1) |
|||||
Adjusted EBITDA including loss making start-up schools |
44.8 |
27.7 |
37.4 |
126.1 |
79.2 |
102.3 |
|||||
Adjusted Net Income |
14.7 |
2.9 |
7.0 |
38.3 |
18.2 |
29.6 |
|||||
We use EBITDA, Adjusted EBITDA and Adjusted Net Income 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 the items set forth in the table below. We define Adjusted Net Income as Adjusted EBITDA adjusted for the items in the table below. EBITDA, Adjusted EBITDA and Adjusted Net Income are not standard measures under IFRS. EBITDA, Adjusted EBITDA and Adjusted Net Income should not be considered in isolation or construed as alternatives to cash flows, net income 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 and Adjusted Net Income presented herein may not be comparable to similarly titled measures presented by other companies. Adjusted EBITDA excludes EBITDA losses attributable to loss-making start-up schools that have been open less than three years. We consider this a more directly comparable supplemental financial measure for evaluating the performance of our schools.
NORD ANGLIA EDUCATION, INC. |
|||||||||||
(Unaudited) |
Three Months Ended May 31, |
Nine Months Ended May 31, |
|||||||||
$ millions |
2014 |
2013 |
2013 |
2014 |
2013 |
2013 |
|||||
Actual |
Actual |
Pro forma |
Actual |
Actual |
Pro forma |
||||||
(Loss)/profit for the period |
(83.9) |
(3.1) |
1.1 |
(65.8) |
5.6 |
13.0 |
|||||
Income tax expense |
9.5 |
6.4 |
7.9 |
22.7 |
18.7 |
18.0 |
|||||
Net financing expense(1) |
13.4 |
16.1 |
18.9 |
46.4 |
35.5 |
43.9 |
|||||
Exceptional items(2) |
94.3 |
2.9 |
(5.7) |
96.8 |
5.6 |
(3.0) |
|||||
Amortization |
2.4 |
0.9 |
2.0 |
7.3 |
2.8 |
5.9 |
|||||
Depreciation |
6.9 |
2.4 |
3.8 |
17.6 |
7.4 |
11.7 |
|||||
EBITDA |
42.6 |
25.6 |
28.0 |
125.0 |
75.6 |
89.5 |
|||||
Loss on disposal of property, plant and equipment(3) |
- |
- |
- |
- |
0.1 |
0.1 |
|||||
FX loss/(gain) (4) |
2.0 |
1.5 |
1.7 |
(2.7) |
0.6 |
2.8 |
|||||
Loss making start-up schools(5) |
0.2 |
0.3 |
0.6 |
0.4 |
1.2 |
2.1 |
|||||
Pre-acquisition and business integration costs(6) |
- |
- |
0.8 |
- |
- |
0.8 |
|||||
Share based payments(7) |
0.0 |
- |
6.3 |
2.5 |
- |
6.3 |
|||||
Management fees (8) |
0.2 |
0.6 |
0.6 |
1.2 |
2.9 |
2.9 |
|||||
Other |
(0.0) |
0.0 |
0.0 |
0.1 |
0.0 |
(0.1) |
|||||
Adjusted EBITDA |
45.0 |
28.0 |
38.0 |
126.5 |
80.4 |
104.4 |
|||||
Depreciation |
(6.9) |
(2.4) |
(3.8) |
(17.6) |
(7.4) |
(11.7) |
|||||
Net Financing Expense(1) |
(13.4) |
(16.1) |
(18.9) |
(46.4) |
(35.5) |
(43.9) |
|||||
Income Tax Expense |
(9.5) |
(6.4) |
(7.9) |
(22.7) |
(18.7) |
(18.0) |
|||||
Tax Adjustments(9) |
(0.5) |
(0.2) |
(0.4) |
(1.5) |
(0.6) |
(1.2) |
|||||
Adjusted Net Income |
14.7 |
2.9 |
7.0 |
38.3 |
18.2 |
29.6 |
|||||
Adjusted earnings per ordinary share(10) (in $) |
|||||||||||
Basic |
0.13 |
0.02 |
0.05 |
0.29 |
0.13 |
0.21 |
|||||
Diluted |
0.13 |
0.02 |
0.05 |
0.29 |
0.13 |
0.21 |
|||||
Pro forma adjusted earnings per ordinary share(11) (in $) |
|||||||||||
Basic |
0.15 |
0.03 |
0.07 |
0.39 |
0.19 |
0.30 |
|||||
Diluted |
0.15 |
0.03 |
0.07 |
0.39 |
0.19 |
0.30 |
|||||
1) As described under "Management's Discussion and Analysis of Financial Condition and Results of Operations – Debt", on March 31, 2014 we drew down in full on a new $515.0 million term loan facility and using proceeds from the loan and our initial public offering, we discharged our obligations under the indentures governing our $490.0 million 10.25% senior secured notes and $150.0 million 8.50%/9.50% PIK toggle notes, both of which were fully redeemed as of April 14, 2014. The new term loan facility bears interest based on applicable margin percentages of 2.50% per annum for base rate loans and 3.50% per annum for LIBOR rate loans, provided that the base rate for base rate loans may not be lower than 2.00% and LIBOR may not be lower than 1.00%. Based on these interest rates, assuming our new term loan had been fully drawn during the three and nine months ended May 31, 2014, and that none of our notes were outstanding during the three and nine months ended May 31, 2014, we estimate that our net interest expense, before tax, would have decreased by approximately $5.8 million and $25.0 million for the three and nine months ended May 31, 2014, respectively. (2) Exceptional expenses are primarily related to the costs associated with our IPO and refinancing and on the acquisition of schools, including associated transaction and integration costs. In the three months and nine months ended May 31, 2014, we incurred exceptional charges of $89.9 million related to the redemption of our outstanding notes, including the release of $12.9 million of prepaid costs. We also incurred an exceptional charge of $2.5 million in connection with the transfer of our transactional banking and revolving credit facility from Barclays Bank PLC to the Hong Kong and Shanghai Bank. (3) Includes loss on disposal of property, plant and equipment associated with the termination of learning services contracts in the UK. (4) Represents foreign currency translational gains primarily associated with our inter-company balances. (5) Represents the EBITDA losses attributable to our school in New York for the three and nine months ended May 31, 2014 and the three and nine months ended May 31, 2013 pro forma, and, for the three and nine months ended May 31, 2013 actual and pro forma, the EBITDA losses attributable to our school in Abu Dhabi. (6) Represents costs incurred by WCL Group in connection with our acquisition of WCL Group. (7) Represents non-cash charges associated with equity investments in our company by members of management. (8) Represents management fees paid to Premier Education Holdings Ltd. (9) Represents the tax impact associated with the exclusion of exceptional items and amortization in calculating Adjusted Net Income. (10) Adjusted earnings per ordinary share is calculated by dividing Adjusted Net Income for the period by the weighted average ordinary shares outstanding for the period. For the three months ended May 31, 2014 the basic and diluted weighted average ordinary shares outstanding were 110.0 million and 110.2 million ordinary shares, respectively. For the nine months ended May 31, 2014 the basic and diluted weighted average ordinary shares outstanding were 130.7 million and 130.9 million ordinary shares, respectively. For the three and nine months ended May 31, 2013 the basic and diluted weighted average ordinary shares outstanding were 141.2 million ordinary shares. . (11) Pro forma adjusted earnings per ordinary share is calculated by dividing Adjusted Net Income for the period by the number of ordinary shares outstanding following the completion of our initial public offering. On completion of our initial public offering, we issued 21.8 million ordinary shares and all previously existing preference shares and classes of ordinary shares were converted into 75.9 million ordinary shares. The basic and diluted weighted average ordinary shares outstanding for all periods would have been 97.7 million and 97.9 million ordinary shares, respectively. |
SOURCE Nord Anglia Education, Inc.
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