-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S1SrTJuR2sVbpSnkRVkCo3xAx4gOVF7PIo4p88RikSQCamoAnh+kPMO7rHjYCUj1 EIDYdielVZrUo5jj5wiguA== 0000730464-97-000008.txt : 19971111 0000730464-97-000008.hdr.sgml : 19971111 ACCESSION NUMBER: 0000730464-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEVRY INC CENTRAL INDEX KEY: 0000730464 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 363150143 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13988 FILM NUMBER: 97711029 BUSINESS ADDRESS: STREET 1: ONE TOWER LN STREET 2: SUITE 1000 CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 BUSINESS PHONE: 7085717700 MAIL ADDRESS: STREET 1: ONE TOWER LANE CITY: OAKBROOK STATE: IL ZIP: 60181 10-Q 1 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 Commission file number 0-12751 DEVRY INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 36-3150143 ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Tower Lane, Oakbrook Terrace, Illinois 60181 ------------------------------------------ ---------- (Address of principal executive offices) (Zip Code) (630) 571-7700 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X --- Number of shares of Common Stock, $0.01 par value, outstanding at October 30, 1997: 34,514,382 Total number of pages: 11 2 DEVRY INC. FORM 10-Q INDEX For the Quarter ended September 30, 1997 Page No. -------- PART I. Financial Information Item 1. Financial Statements: Consolidated Balance Sheets at September 30, 1997, June 30, 1997, and September 30, 1996 3-4 Consolidated Statements of Income for the quarter ended September 30, 1997 and 1996 5 Consolidated Statements of Cash Flows for the three months ended September 30, 1997 and 1996 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8-9 Part II. Other Information Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11 3 PART I - Financial Information Item 1 - Financial Statements DEVRY INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
September 30, June 30, September 30, 1997 1997 1996 ------------ -------- ------------ (Unaudited) (Unaudited) ASSETS Current Assets Cash and Cash Equivalents $ 28,605 $ 38,865 $ 18,184 Restricted Cash 20,332 12,104 22,096 Accounts Receivable, Net 23,279 12,322 31,372 Inventories 2,981 4,549 1,757 Prepaid Expenses and Other 1,261 2,676 2,564 -------- -------- -------- Total Current Assets 76,458 70,516 75,973 -------- -------- -------- Land, Buildings and Equipment Land 35,159 34,348 19,031 Buildings 51,329 50,906 49,859 Equipment 67,080 63,609 56,388 Construction In Progress 541 91 342 -------- -------- -------- 154,109 148,954 125,620 Accumulated Depreciation (60,784) (58,266) (51,873) -------- -------- -------- Land, Buildings and Equipment, Net 93,325 90,688 73,747 -------- -------- -------- Other Assets Intangible Assets, Net 37,382 37,770 37,815 Perkins Program Fund, Net 6,176 6,075 5,516 Other Assets 1,613 1,654 1,806 -------- -------- -------- Total Other Assets 45,171 45,499 45,137 -------- -------- -------- TOTAL ASSETS $214,954 $206,703 $194,857 ======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 4 DEVRY INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
September 30, June 30, September 30, 1997 1997 1996 ------------ -------- ------------ (Unaudited) (Unaudited) LIABILITIES Current Liabilities Accounts Payable $ 15,767 $ 22,301 $ 14,192 Accrued Salaries, Wages & Benefits 15,863 16,077 13,538 Accrued Expenses 9,771 7,620 9,180 Advance Tuition Payments 5,442 6,594 11,929 Deferred Tuition Revenue 32,305 5,701 29,793 -------- -------- -------- Total Current Liabilities 79,148 58,293 78,632 -------- -------- -------- Other Liabilities Revolving Loan 14,000 33,000 47,000 Deferred Income Tax Liability 3,038 3,060 2,184 Deferred Rent and Other 7,172 7,080 4,764 -------- -------- -------- Total Other Liabilities 24,210 43,140 53,948 -------- -------- -------- TOTAL LIABILITIES 103,358 101,433 132,580 -------- -------- -------- SHAREHOLDERS' EQUITY Common Stock, $0.01 par value, 75,000,000 Shares Authorized, 34,511,214, 34,504,214 and 33,256,374, Shares Issued and Outstanding at September 30, 1997, June 30, 1997 and September 30, 1996, Respectively 345 345 333 Additional Paid-in Capital 60,522 60,482 36,725 Retained Earnings 50,285 44,006 24,780 Cumulative Translation Adjustment 444 437 439 -------- -------- -------- TOTAL SHAREHOLDERS' EQUITY 111,596 105,270 62,277 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $214,954 $206,703 $194,857 ======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 5 DEVRY INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands Except for Per Share Amounts) (Unaudited)
For The Quarter Ended September 30, --------------------- 1997 1996 -------- -------- REVENUES: Tuition $72,973 $62,478 Other Educational 7,102 6,604 Interest 346 167 ------- ------- Total Revenues 80,421 69,249 ------- ------- COSTS AND EXPENSES: Cost of Educational Services 48,710 42,819 Student Services and Administrative Expense 21,015 17,396 Interest Expense 400 886 ------- ------- Total Costs and Expenses 70,125 61,101 ------- ------- Income Before Income Taxes 10,296 8,148 Income Tax Provision 4,017 3,188 ------- ------- NET INCOME $ 6,279 $ 4,960 ======= ======= EARNINGS PER COMMON SHARE $0.18 $0.15 ======= =======
The accompanying notes are an integral part of these consolidated financial statements. 6 DEVRY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
For The Quarter Ended September 30, 1997 1996 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 6,279 $ 4,960 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 2,516 1,858 Amortization 395 386 Provision for Refunds and Uncollectible Accounts 4,582 4,394 Deferred Income Taxes (22) 177 Loss on Disposals and Adjustments to Land, Buildings and Equipment 1 13 Changes in Assets and Liabilities: Restricted Cash (8,228) (5,506) Accounts Receivable (15,500) (26,073) Inventories 1,568 1,533 Prepaid Expenses And Other (125) (989) Perkins Program Fund Contribution and Other (140) (42) Accounts Payable (6,534) (4,667) Accrued Salaries, Wages, Expenses and Benefits 3,603 343 Advance Tuition Payments (1,152) 4,312 Deferred Tuition Revenue 26,604 26,184 ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 13,847 6,883 ------- ------- CASH FLOWS USED IN INVESTING ACTIVITIES: Capital Expenditures (5,154) (4,177) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds From Exercise of Stock Options 40 31 Repayments Under Revolving Credit Facility (19,000) (14,500) ------- ------- NET CASH USED IN FINANCING ACTIVITIES (18,960) (14,469) Effects of Exchange Rate Differences 7 (1) ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (10,260) (11,764) Cash and Cash Equivalents at Beginning of Period 38,865 29,948 ------- ------- Cash and Cash Equivalents at End of Period $28,605 $18,184 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Paid During the Year $413 $896 Income Taxes Paid During the Year 51 1,454
The accompanying notes are an integral part of these consolidated financial statements. 7 DEVRY INC. Notes to Consolidated Financial Statements For the Quarter Ended September 30, 1997 ---------- 1. The interim consolidated financial statements include the accounts of DeVry Inc. (the Company) and its wholly-owned subsidiaries. These financial statements are unaudited but, in the opinion of management, contain all adjustments, consisting only of normal, recurring adjustments, necessary to present fairly the financial condition and results of operations of the Company. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission for the fiscal year ended June 30, 1997. The results of operations for the three months ended September 30, 1997, are not necessarily indicative of results to be expected for the entire fiscal year. 2. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share." This new statement, which will be adopted during the second quarter of the Company's 1998 fiscal year, redefines earnings per share under generally accepted accounting principles. Under the new standard, primary earnings per share is replaced by basic earnings per share and fully diluted earnings per share is replaced by diluted earnings per share. For the three months ended September 30, 1997, unaudited pro forma basic and diluted earnings per share do not differ from earnings per share as reported. 3. In July and August 1997, the Company granted options to purchase up to 129,800 shares of the Company's common stock under the Amended and Restated Stock Incentive Plan, the 1991 Stock Incentive Plan and the 1994 Stock Incentive Plan. 8 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition - ----------------------------------------------------------------------- The following discussion of the Company's results of operations and financial condition should be read in conjunction with the consolidated financial statements of the Company and the notes thereto. All references to per share amounts have been restated to reflect the December 18, 1996, two-for-one stock split. Because of the somewhat seasonal pattern of the Companys enrollments and its term starting dates, which affect the results of operations and the timing of cash inflows, the Company believes that comparisons of its results of operations should be made to the corresponding period in the preceding year. Comparisons of financial position should be made to both the end of the previous fiscal year and to the end of the corresponding period in the preceding year. Typically, due to the seasonality of student enrollments, the Companys second and third quarters have historically represented the periods of highest revenues and net income within a fiscal year. Results of Operations - --------------------- Tuition revenue for the first quarter increased by $10.5 million, or 16.8%, compared to the first quarter of last year. The increase in tuition revenues was produced by several positive factors. Enrollment at the DeVry Institutes for the summer term, which began in July, increased by 6.9% from last summer. The increased DeVry Institute student enrollment in the summer term represented the twentieth consecutive term of increased total student enrollment as compared to the corresponding prior year period. Enrollment at Keller Graduate School for the term which began in June increased by over 20%. In addition, tuition increases of approximating 5% were implemented at DeVry and KGSM and a somewhat smaller increase was implemented at Becker CPA. Other educational revenues, composed primarily of sales of books and supplies, increased because of sales to the increased number of students attending the Company's educational programs. Interest income on the Company's short-term investments doubled from last year as an increased pace of student receivable collections provided more investible cash earlier in the quarter. Cost of educational services increased by nearly $5.9 million, or 13.8%, from the first quarter of last year. The increase in cost of educational services reflects the additional facility, faculty and staff associated with new DeVry Institute, KGSM and Becker operating locations. Compared to the first quarter of last year, the DeVry Institutes are now conducting classes in a new facility in Alpharetta, Georgia, and Keller Graduate School has opened three additional teaching centers. In addition, there were higher wage, benefit, supply and service expenses associated with the growing student enrollments at the DeVry Institutes and Keller Graduate School. Depreciation expense in the quarter increased by over $600,000 as a result of the Company's record capital spending last year for expansion and improvement. Student services and administrative expense increased by $3.6 million, or 20.8%, from last year. The increase reflects the marketing costs associated with generating higher student enrollments for the coming terms, particularly at the newly opened facilities. Administrative expenses also increased in support of the larger scope of the Company's operations. 9 The Company's earnings from operations, before interest expense and taxes, were a record for the quarter. Operating margins, which have been increasing consistently each quarter over the comparable year-ago period, increased again to 13.3%, reflecting cost controls and operating leverage from expanding enrollments. Interest expense decreased by nearly $500,000, or 55%, as the net proceeds of a stock offering completed in the fourth quarter of last fiscal year and continued strong cash flow generation from operations provided cash for debt reduction. Compared to September 30th of last year, debt has been reduced by $33 million. Net income of $6.3 million was a record for any first quarter, increasing by 26.6% from the first quarter of fiscal 1997. Earnings per share, including the effect of a higher number of shares outstanding from the April 1997 stock offering, increased to $0.18 per share. Liquidity and Capital Resources - ------------------------------- Cash generated from operations in the first quarter more than doubled from last year to $13.8 million. The increase in cash generation results from higher net income, higher non-cash charges for depreciation included in net income and a quicker pace of accounts receivable collection. Operating cash balances during the quarter were higher than during the corresponding period a year ago and were sufficient to meet all of the Company's operating and capital investment needs while reducing debt. During the first quarter, the Company repaid $19 million of its revolving loan facility using existing cash balances and cash generated from operations, taking advantage of the seasonally strong cash flow in the quarter. Future borrowings and/or repayments will be based upon the Companys seasonal cash flow cycle and payment requirements for construction of new facilities and other capital spending. Capital expenditures of $5.2 million in the quarter increased by $1.0 million from the same quarter last year, reflecting the Companys continued investment in technology, productivity improvement and growth. Capital expenditures for fiscal 1998 are expected to equal or exceed the record level of fiscal 1997. Construction of a new DeVry Institute in Fremont, California, planned to open in July, 1998, and improvements to a facility expected to be leased in New York and planned to open in November, 1998, will both contribute to the continued high spending levels. The Company believes that current balances of unrestricted cash, cash generated from operations and, if needed, its revolving loan facility will be sufficient to fund its operating needs and capital spending plans for the foreseeable future. 10 PART II - Other information - --------------------------- Item 5 - Other Information - -------------------------- Effective October 1, 1997, the Companys bank borrowings were set at a floating rate of LIBOR plus 0.35% in accordance with the achievement of certain performance standards contained in the revolving loan facility agreement. Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (b) Reports on Form 8-K - ----------------------- There were no reports on Form 8-K filed by the Company during the quarter ended September 30, 1997. 11 Signatures - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: NOVEMBER 6, 1997 /s/ Ronald L. Taylor -------------------- Ronald L. Taylor President and Chief Operating Officer Date: NOVEMBER 6, 1997 /s/Norman M. Levine ------------------- Norman M. Levine Vice President Finance, Controller, Chief Financial and Accounting Officer EX-27 2
5 1000 3-MOS JUN-30-1998 SEP-30-1997 48937 0 29576 6297 2981 76458 154109 60784 214954 79148 14000 0 0 345 111251 214954 0 80421 0 48710 21015 4582 400 10296 4017 6279 0 0 0 6279 .18 .18
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