-----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, DglPj9m5R+/gK3UC4Qhn6wGIueYWLx73HP4iwSvu12pNhdjngWABFjhVgzfvfanr 0an/hCApQaG1tKFL7bchvw== 0000928385-98-000450.txt : 19980313 0000928385-98-000450.hdr.sgml : 19980313 ACCESSION NUMBER: 0000928385-98-000450 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980311 ITEM INFORMATION: FILED AS OF DATE: 19980312 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYLVAN LEARNING SYSTEMS INC CENTRAL INDEX KEY: 0000912766 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 521492296 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22844 FILM NUMBER: 98564327 BUSINESS ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 4108438000 MAIL ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 8-K 1 FORM 8K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 11, 1998 ---------------------------- SYLVAN LEARNING SYSTEMS, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Maryland 0-22844 52-1492296 - ------------------------ ------------------------ ---------------------- (State of Incorporation) (Commission File Number) (IRS Employer Identification Number) 1000 Lancaster Street Baltimore, Maryland 21202 ---------------------------------------------------- (Address of principal executive offices) (Zip Code) (410) 843-8000 -------------- (Registrant's telephone number) Item 5. Other Events. The selected consolidated financial data schedule of Sylvan Learning Systems, Inc. ("the Company") for each of the five years in the period ended December 31, 1996 and the Company's selected consolidated financial data schedule for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 attached hereto as Exhibits, have been restated to give retroactive effect to the Company's adoption of Statement of Financial Accounting Standards No. 128 Earnings Per Share, as of December 31, 1997. SELECTED CONSOLIDATED FINANCIAL DATA(1)
PARTNERSHIP AND SYLVAN PARTNERSHIP COMBINED SYLVAN ------------ ------------ ----------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------ ------------ ----------------------------------------- 1992 1993 1994 1995 1996 -------- ------- -------- --------- -------- ($ IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENTS OF OPERATIONS DATA: Revenues $ 33,821 $51,519 $68,748 $111,059 $181,936 Cost and expenses: Direct costs 28,840 44,056 60,388 96,708 150,449 General and administrative expense 5,433 6,255 4,998 6,206 8,755 Loss on impairment of assets -- -- -- 3,316 -- -------- ------- -------- --------- -------- Total expenses 34,273 50,311 65,386 106,230 159,204 -------- ------- -------- --------- -------- Operating income (loss) (452) 1,208 3,362 4,829 22,732 Non-operating income (expense) 1 (116) 224 391 363 Interest income (expense), net (594) (1,290) (62) (1,440) 551 -------- ------- -------- --------- -------- Income (loss) from continuing operations before income taxes and extraordinary items (1,045) (198) 3,524 3,780 23,646 Income taxes (16) (7) (76) (209) (8,850) -------- ------- -------- --------- -------- Income (loss) from continuing operations before extraordinary items (1,061) (205) 3,448 3,571 14,796 Discontinued operations(2): Loss from operations, net of tax (1,700) (375) -- -- -- Gain on disposal 427 580 -- -- -- -------- ------- -------- --------- -------- Income (loss) from discontinued operations (1,273) 205 -- -- -- -------- ------- -------- --------- -------- Net income (loss) before extraordinary items (2,334) -- 3,448 3,571 14,796 Extraordinary items(3) -- (177) -- -- -- -------- ------- -------- --------- -------- Net income (loss) (2,334) $ (177) $ 3,448 $ 3,571 $ 14,796 ======== ======= ======== ========= ======== Earnings (loss) per common share(4)(5): Income (loss) from continuing operations before extraordinary items $ (0.03) $ 0.24 $0.24 $ 0.64 Income from discontinued operations 0.03 -- -- -- Extraordinary items (0.03) -- -- -- ------- -------- --------- -------- Net income per common share $ (0.03) $ 0.24 $0.24 $ 0.64 ======= ======== ========= ======== Earnings (loss) per common share - assuming dilution(4)(5): Income (loss) from continuing operations before extraordinary items $ (0.03) $ 0.21 $0.21 $ 0.60 Income from discontinued operations 0.03 -- -- -- Extraordinary items (0.03) -- -- -- ------- -------- --------- -------- Net income per common share - assuming dilution $ (0.03) $ 0.21 $0.21 $ 0.60 ======= ======== ========= ======== Weighted average shares outstanding(4): Basic 6,448 14,522 15,132 23,029 ======= ======== ========= ======== Diluted 6,448 16,286 17,079 24,586 ======= ======== ========= ======== BALANCE SHEET DATA (AT PERIOD END): Cash and cash equivalents $ 673 $11,499 $ 4,366 $ 2,903 $ 11,198 Available-for-sale securities 127 1,248 2,537 30,735 16,449 Net working capital (deficit) (3,302) 12,665 13,166 39,407 29,603 Intangible assets and deferred contract costs 149 7,000 7,932 82,849 122,932 Total assets 18,446 42,003 50,046 174,070 259,590 Long-term debt and capital leases 5,578 6,640 9,814 9,854 32,228 Stockholders' or partners' equity 326 24,563 32,481 137,148 180,323
SELECTED CONSOLIDATED FINANCIAL DATA (1)
SYLVAN --------------------------------------- THREE MONTHS ENDED --------------------------------------- March 31, June 30, September 30, 1997 1997 1997 ---- ---- ---- ($ IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENTS OF OPERATIONS DATA: Revenues $ 51,944 $ 57,596 $ 58,464 Cost and expenses: Direct costs 43,630 61,931 44,013 General and administrative expense 2,961 9,913 3,664 Loss on impairment of assets -- 4,000 -- --------- --------- --------- Total expenses 46,591 75,844 47,677 --------- --------- --------- Operating income (loss) 5,353 (18,248) 10,787 Non-operating income (expense) (128) 28,241 (461) Interest income (expense), net 480 658 1,254 --------- --------- --------- Income before income taxes 5,705 10,651 11,580 Income taxes (2,258) (3,957) (4,053) --------- --------- --------- Net income $ 3,447 $ 6,694 $ 7,527 ========= ========= ========= Net income per common share (4): Basic $ 0.14 $ 0.26 $ 0.27 ========= ========= ========= Diluted $ 0.13 $ 0.25 $ 0.26 ========= ========= ========= Weighted average shares outstanding (4): Basic 25,379 25,499 27,746 ========= ========= ========= Diluted 27,251 27,109 29,255 ========= ========= ========= BALANCE SHEET DATA (AT PERIOD END): Cash and cash equivalents $ 12,789 $ 29,883 $ 29,624 Available-for-sale securities 10,730 10,081 80,523 Net working capital 40,228 55,369 132,922 Intangible assets and deferred contract costs 120,948 119,031 116,652 Total assets 260,380 278,829 368,616 Long-term debt and capital leases 22,524 7,140 926 Stockholders' or partners' equity 201,880 233,250 326,582
- --------- (1) Prior to February 1, 1991, the Sylvan Learning Centers business was conducted by Sylvan Learning Corporation (the "Predecessor"). On February 1, 1991, the Predecessor contributed the Sylvan Learning Centers business to Sylvan KEE Systems, a Maryland general partnership (the "Partnership") in exchange for a 50% partnership interest, and Sylvan contributed its computer training software development business to the Partnership in exchange for the other 50% partnership interest. On January 26, 1993, Sylvan acquired the Predecessor and dissolved the Partnership. On September 3, 1993, Sylvan sold its computer training software development business. During 1994, Sylvan acquired by mergers all of the outstanding stock of Learning Services, Inc. ("LSI") and Loralex Corporation ("Loralex"). These companies owned and operated a total of nine Sylvan Learning Centers located in the Northeast United States and Florida. On February 17, 1995, Sylvan acquired by merger all of the outstanding stock of Remedial Education and Diagnostic Services, Inc. and READS, Inc. (collectively, "READS"), a Philadelphia-based provider of remedial, education and a variety of consulting services to school districts, county-wide educational agencies and municipalities in the Eastern United States. The READS, Loralex and LSI acquisitions have been accounted for by Sylvan as poolings-of-interests and, accordingly, Sylvan's financial statements have been restated for all periods presented to include the results of operations of READS, Loralex and LSI. Effective September 30, 1995 Sylvan acquired Drake Prometric, L.P. ("Drake"), a leading provider of computer-based certification, licensure and assessment testing. The transaction was accounted for using the purchase method of accounting, and Sylvan's results of operations from October 1, 1995 include the operations of Drake. Effective December 1, 1996, Sylvan acquired Wall Street Institute International, B.V., and its commonly controlled affiliates (collectively "Wall Street"), a European-based franchisor and operator of learning centers that teach the English language. This transaction was accounted for using the purchase method of accounting and Sylvan's results of operations from December 1, 1996 include the operations of Wall Street. Sylvan paid $4.9 million of the $20.1 million purchase price in cash and the remainder in 714,884 shares of Common Stock. On May 30, 1997, the Company consummated its acquisition by merger of all of the outstanding common stock of Educational Inroads. Educational Inroads provided contract educational services to school districts in New Jersey and several other states. The Educational Inroads acquisition has been accounted for by Sylvan as a pooling-of-interests and, accordingly, Sylvan's financial statements have been restated for all periods prior to the acquisition to include the results of operations of Educational Inroads. Educational Inroads generated revenues of $24.8 million in 1996. (2) Represents Sylvan's computer training software development business which was sold in September 1993 and a Canadian computer training business, 80.1% of which was sold in 1992. (3) Represents the $350,000 gain on extinguishment of a $3.5 million debt to Learning Centers, Inc., and a $527,000 loss on an extinguishment of $5.0 million of notes payable to stockholders, each recorded in 1993. (4) All share and per share data have been restated to retroactively reflect a 3-for-2 stock split of the Company's common stock for stockholders of record on November 7, 1996. (5) The following table sets forth the reconciliation of the numerators and denominators used in the computation of basic and diluted earnings per share for the financial statements presented for the most recent three years:
YEAR ENDED DECEMBER 31, ------------------------- 1994 1995 1996 ------- ------- ------- Numerator for basic and diluted earnings per share: Net Income $ 3,448 $ 3,571 $14,796 ======= ======= ======= Denominator: Denominator for basic earnings per share - weighted average shares 14,522 15,132 23,029 Effect of dilutive securities: Employee stock options 1,764 1,851 1,379 Common stock contingently issuable -- 96 178 ------- ------- ------- Total dilutive potential common shares 1,764 1,947 1,557 Denominator for diluted earnings per share - weighted average shares and assumed conversions 16,286 17,079 24,586 ======= ======= ======= Basic earnings per share $ 0.24 $ 0.24 $ 0.64 ======= ======= ======= Diluted earnings per share $ 0.21 $ 0.21 $ 0.60 ======= ======= =======
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: March 11, 1998 SYLVAN LEARNING SYSTEMS, INC. By: /s/ B. Lee McGee ------------------------------------------ B. Lee McGee, Executive Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----