NORD Nord Anglia Education Ordinary Shares (delisted)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of January 2017

Commission File Number: 001-36356

Nord Anglia Education, Inc.

(Exact name of registrant as specified in its charter)

N/A

(Translation of registrant’s name into English)

Level 12, St. George’s Building

2 Ice House Street

Central, Hong Kong

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.  Form 20-F  x Form 40-F   o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

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Special Note Regarding Forward Looking Statements

This report on Form 6-K 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” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”).  The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act.  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 report and include 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.  These statements include, among other things, statements relating to:

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 quarterly report.  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 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 report 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.

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(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.

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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:

(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.

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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.

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(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.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our unaudited consolidated financial statements as of and for the three months ended November 30, 2016 included elsewhere in this Form 6-K.  Our consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”).  Our historical operating results for the three months ended November 30, 2016 are not necessarily indicative of our results for the fiscal year ending August 31, 2017 or any future fiscal period. This discussion contains forward-looking statements relating to events that involve risks and uncertainties. Actual results could differ materially from those projected in forward-looking statements. See “Special Note Regarding Forward Looking Statements.”

Overview

We believe we are the world’s leading operator of premium international schools. We teach over 37,000 students, from kindergarten through the end of secondary school (“K-12”), at our 43 premium schools in China, Europe, the Middle East, South East Asia and North America. As of January 23, 2017, we had 37,202 FTEs and capacity of 54,813 seats, representing a utilization rate of 68%.

Recent Developments

In December 2016, we successfully repriced our term loan facility and revolving credit facility. The term loans under our 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 our 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 our total net leverage ratio, reduced from a margin of 2.75% to 3.75% per annum.

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Three months ended November 30, 2016 compared to three months ended November 30, 2015

Revenue

Revenue increased $16.8 million, or 6.9% (8.5% on a constant currency basis), from $244.2 million for the three months ended November 30, 2015 to $261.0 million for the three months ended November 30, 2016.  The increase was primarily due to higher revenues from our premium schools, partly offset by the impact of the strengthening US dollar on our premium schools revenue and a decrease in other revenue.

Revenue from our premium schools increased 7.0% (8.6% on a constant currency basis) from $243.1 million in the three months ended November 30, 2015 to $260.1 million in the three months ended November 30, 2016.  This increase was primarily due to increases in FTEs and tuition fees, including the impact of the new bilingual school we opened in Shanghai in September 2016.

Other revenue decreased from $1.1 million in the three months ended November 30, 2015 to $0.9 million in the three months ended November 30, 2016.

Cost of Sales

Cost of sales increased $15.8 million, or 10.7% (12.2% on a constant currency basis), from $148.1 million for the three months ended November 30, 2015 to $163.9 million for the three months ended November 30, 2016.  The increase was primarily due to direct costs associated with increased FTEs across our schools and 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 additional rent following the sale and leaseback of three schools in North America in the third quarter of fiscal 2016.

Gross Profit

Gross profit increased $1.0 million, or 1.0% (2.8% on a constant currency basis), from $96.1 million for the three months ended November 30, 2015 to $97.1 million for the three months ended November 30, 2016, resulting in a gross profit margin of 37.2% for the three months ended November 30, 2016 compared to 39.4% for the three months ended November 30, 2015.  The reduction in gross profit margin for the three months ended November 30, 2016 was primarily due to the additional rent included in cost of sales from the sale and leaseback and the new school openings in September 2016, partially offset by tuition fee increases in excess of cost inflation and increased FTEs within our schools.

Selling, General and Administrative Expenses (“SGA”)

SGA expenses increased $5.8 million, or 12.6%, from $45.9 million for the three months ended November 30, 2015 to $51.7 million for the three months ended November 30, 2016.  SGA expenses as a percentage of revenue increased from 18.8% for the three months ended November 30, 2015 to 19.8% for the three months ended November 30, 2016, mainly due to the new schools opened in September 2016, greenfield school pre-opening costs in Abu Dhabi, Bangkok and Hong Kong, Global Campus related costs, Sarbanes-Oxley project costs and non-cash charges associated with share based payments to members of management in the three months ended November 30, 2016.

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Depreciation & Amortization Expenses

Depreciation expense was $0.1 million for the three months ended November 30, 2016, a decrease of $0.1 million from $0.2 million for the three months ended November 30, 2015.