Nord Anglia Education Reports First Quarter FY2015 Financial Results

HONG KONG, Jan. 14, 2015 /PRNewswire/ -- Nord Anglia Education, Inc. (NYSE: NORD), the world's leading premium schools organization, today announced financial results for the first quarter of fiscal 2015, the three month period ended November 30, 2014.

First quarter FY2015 highlights (compared to first quarter FY2014):

• Full time equivalent students (FTEs) increased 17.5% from 16,936 to 19,899
• Revenue increased 14.1% (17.1% on a constant currency basis) from $135.1 million to $154.2 million
• Revenue from premium schools increased 15.4% (18.5% on a constant currency basis) from $130.4 million to $150.6 million
• Adjusted EBITDA increased 12.3% (14.7% on a constant currency basis) from $38.7 million to $43.5 million
• Adjusted Net Income increased from $10.7 million to $21.0 million
• Adjusted EPS increased from $0.14 to $0.22

"We are pleased to report our first quarter for fiscal 2015, with robust financial and operating results," said Andrew Fitzmaurice, Nord Anglia Education CEO. "We have achieved strong in-year enrollment growth to 20,247 full time equivalent students (FTEs) as at January 11, 2015. This means we have added over 500 FTEs since September 2014, which is more than double the number of students added in the same period last year. Our in-year enrollment growth is supported by continued positive trends in enquiries and visits which are our key lead indicators for organic growth.  Having delivered another strong quarter, we are well positioned to continue to execute our growth strategy of same school expansion, greenfield developments and acquisitions for the rest of fiscal 2015 and into fiscal 2016"

"Being part of Nord Anglia Education enables our schools, and their students, staff and parents, to achieve more than if each school was on its own. For this year's annual teacher recruitment event we have received on average over 30 applications for every vacant role, clearly demonstrating the power of the Nord Anglia Education brand," Fitzmaurice continued. 

First quarter FY2015 results

Revenue increased by $19.1 million to $154.2 million in the first quarter of fiscal 2015 from $135.1 million in the same period of fiscal 2014.  This increase was due to growth in FTEs and tuition fee increases at our schools and the impact of our acquisitions in Singapore and Cambodia.  

Our gross profit margin decreased to 52.8% in the first quarter of fiscal 2015 from 54.2% in the same period of fiscal 2014, largely due to the impact of the loss making start-up schools opened in Dubai and Aubonne, as well as stronger growth in the lower margin Middle East/South East Asia region, partly offset by price increases in excess of our cost inflation.

Adjusted EBITDA increased by $4.8 million to $43.5 million (28.2% Adjusted EBITDA margin) in the first quarter of fiscal 2015 from $38.7 million (28.6% Adjusted EBITDA margin) in the same period in fiscal 2014.  This is the first quarter that our adjusted numbers include the results of our loss making start-up schools.  Excluding loss making start-up schools, our Adjusted EBITDA margin would have been approximately 30%.

Adjusted net income increased to $21.0 million in the first quarter of fiscal 2015 from $10.7 million in the first quarter of fiscal 2014. 

Our average FTEs in the three months ended November 30, 2014 were 19,899, a 17.5% increase over the average FTEs in the three months ended November 30, 2013 of 16,936.  Average capacity and utilization were 26,587 seats and 75%, respectively, in the three months ended November 30, 2014 compared to 21,737 seats and 78%, respectively, in the three months ended November 30, 2013.

Balance Sheet and Cash Flow

During the three months ended November 30, 2014, net cash used in operating activities was $28.2 million compared to $41.1 million for the same period in fiscal 2014. Cash used in investing activities increased from $9.6 million for the three months ended November 30, 2013 to $16.7 million for the same period in fiscal 2015.  During the three months ended November 30, 2014, we invested $17.4 million in capital expenditure, including on the refurbishment of our new school in Hong Kong, the cost of our new schools in Aubonne and Dubai and maintenance capital expenditure at our other schools. Net cash provided by financing activities was $14.4 million in the three months ended November 30, 2014 compared to $7.3 million in the same period in 2013. Cash and cash equivalents as of November 30, 2014 were $131.7 million, compared to $131.4 million as of November 30, 2013.

Updated Fiscal 2015 Outlook

Nord Anglia Education is updating its previously issued 2015 guidance to reflect the impact of the recent strengthening of the US dollar.

Nord Anglia Education's prior and revised full year fiscal 2015 guidance for Revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS is set out in the table below:  

The Company continues to expect diluted weighted average shares of approximately 98 million shares. 

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 January 21, 2015 by dialling the following:

United States/Canada Toll Free: 877 870 5176
International: +1 858 384 5517
Replay Conference ID: 13597883

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 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, prospects, growth, 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, prospects, growth strategies 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, 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 plus any loss/(gain) on disposal of PP&E, management fees paid to our sponsor, foreign exchange (gains)/losses and share based payments.  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. We define Adjusted Earnings per Ordinary Share as Adjusted Net Income for the period divided by the weighted average ordinary shares outstanding for the period. Please refer to "Nord Anglia Education, Inc. Supplemental Financial Information" below for further detail. 

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share are not standard measures under IFRS.  EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Ordinary Share should not be considered in isolation or construed as alternatives to cash flows, net income, earnings per 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. 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. 

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 20,240 FTEs at our 31 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 3951 1130
Email: [email protected]

Kevin Doherty
Managing 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 3951 1144
Email: [email protected]

⁽¹⁾ Earnings per ordinary share is calculated by dividing profit for the period by the weighted average ordinary shares outstanding for the period. For the three months ended November 30, 2014 the basic and diluted weighted average ordinary shares outstanding were 97.7 million and 97.8 million ordinary shares, respectively. For the three months ended November 30, 2013 the basic and diluted weighted average ordinary shares outstanding were 75.9 million and 77.3 million ordinary shares, respectively.

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

     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. We define Adjusted Earnings per Ordinary Share as Adjusted Net Income for the period 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. EBITDA, Adjusted EBITDA and Adjusted Net Income and Adjusted Earnings per Ordinary Share 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, Adjusted Net Income and Adjusted Earnings per Ordinary Share presented herein may not be comparable to similarly titled measures presented by other companies.

⁽¹⁾  Exceptional expenses primarily related to the acquisition of schools, including associated transaction and integration costs.
⁽²⁾  Represents foreign currency translational losses primarily associated with our inter-company balances.
⁽³⁾  Represents non-cash charges associated with equity investments in our company by members of management.
⁽⁴⁾  Represents management fees paid to Premier Education Holdings Ltd.
⁽⁵⁾  Represents the tax impact associated with the exclusion of certain costs including exceptional items and amortization in calculating Adjusted Net Income.
⁽⁶⁾  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 November 30, 2014 the basic and diluted weighted average ordinary shares outstanding were 97.7 million and 97.8 million ordinary shares, respectively. For the three months ended November 30, 2013 the basic and diluted weighted average ordinary shares outstanding were 75.9 million and 77.3 million ordinary shares, respectively.

SOURCE Nord Anglia Education, Inc.

Related Links

http://www.nordangliaeducation.com