-----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, GhbK9MpTDsjsCLecTMU1hZpAGHIFQz9xPPbVMRnkBKTjHcgTGji4t+pnzTDdTxq+ a5k+T44iJ9TKW4FDJyceVA== 0000911916-98-000036.txt : 19980420 0000911916-98-000036.hdr.sgml : 19980420 ACCESSION NUMBER: 0000911916-98-000036 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980416 ITEM INFORMATION: FILED AS OF DATE: 19980417 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITT EDUCATIONAL SERVICES INC CENTRAL INDEX KEY: 0000922475 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 362061311 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-13144 FILM NUMBER: 98596511 BUSINESS ADDRESS: STREET 1: 5975 CASTLE CREEK PKWY N DR STREET 2: PO BOX 50466 CITY: INDIANAPOLIS STATE: IN ZIP: 46250 BUSINESS PHONE: 3175949499 MAIL ADDRESS: STREET 1: 5975 CASTLE CREEK PKWY N DR STREET 2: P O BOX 50466 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-0466 8-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT AMENDMENT NO. 1 PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported): APRIL 16, 1998 ITT EDUCATIONAL SERVICES, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-13144 36-2061311 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 5975 CASTLE CREEK PARKWAY N. DRIVE P.O. BOX 50466 INDIANAPOLIS, INDIANA 46250-0466 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (317) 594-9499 The Registrant's Current Report on Form 8-K, dated April 16, 1998, is being amended to correct the Statements of Income included in Exhibit 99.1. Specifically, the column headings on the Statements of Income should read Three Months Ended March 31, 1998 and 1997. No other parts of the Current Report are being amended. ITEM 5. OTHER EVENTS The Press Release issued by the Company dated April 16, 1998, reporting the Company's financial results for the quarter ended March 31, 1998, is incorporated herein by reference and filed with this report as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. The list of exhibits set forth in the Index to Exhibits on page S-2 is incorporated herein by reference. -2- 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. ITT Educational Services, Inc. Date: April 17, 1998 By: /S/ CLARK D. ELWOOD Clark D. Elwood, Senior Vice President, General Counsel & Secretary S-1 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION 99.1 Text of Press Release issued by the Company dated April 16, 1998. S-2 EX-99 2 EXHIBIT 99.1 FOR FURTHER INFORMATION CONTACT: AT THE COMPANY: Edward Hartigan Senior Vice President (317) 594-9499 x207 AT THE FINANCIAL RELATIONS BOARD: George Zagoudis Janine Warell Darcy Bretz General Information Analyst Contact Media Contact (312) 640-6663 (312) 640-6775 (312) 640-6756 FOR IMMEDIATE RELEASE THURSDAY, APRIL 16, 1998 ITT EDUCATIONAL SERVICES, INC. REPORTS RECORD FIRST QUARTER RESULTS INDIANAPOLIS, IN, APRIL 16, 1998 - ITT EDUCATIONAL SERVICES, INC. (NYSE:ESI), a leading proprietary provider of technology-oriented postsecondary degree programs, today reported record first quarter operating income of $11.0 million, a gain of 22 percent over the $9.0 million for the first quarter of 1997. Operating margins for the quarter increased to 15.2 percent compared with 13.9 percent a year ago. The Company attributed its strong results to continued gains in total student enrollment over its increasing college base. Net income in the first quarter increased to $7.3 million, a gain of 18 percent over the $6.2 million for the first quarter of 1997. Fully diluted earnings per share for the quarter rose to 27 cents compared with 23 cents in the prior year period. Revenues increased 12 percent to $72.3 million from $64.5 million in the first quarter of 1997. "We are pleased that our strong momentum has continued in 1998 despite incurring pre-tax expenses of approximately $550,000 in the first quarter relating to our change in control caused by the merger of Starwood Hotels & Resorts with ITT Corporation," said Rene R. Champagne, chairman, president and chief executive officer. "These expenses represent approximately $0.01 per share after tax," said Champagne. "Excluding these expenses, operating income for the quarter would have increased 27.4%." According to Champagne, "ESI has obtained all required prior approvals of the proposed underwritten public offering of 11,000,000 shares together with a potential over-allotment of 1,650,000 shares of ESI common stock held by ITT Corporation (the "Offering") from the Company's education regulators before the offering occurs." "We see significant long-term opportunities to further capitalize on the rising demand for technology-oriented programs of study," said Champagne. "Our 63rd college opened in the first quarter in Burr Ridge (Chicago), Illinois. We intend to open five additional colleges in 1998 in Albany and Liverpool (Syracuse), New York, Richmond, Virginia, Richardson, Texas, and St. Rose (New Orleans), Louisiana. In addition, we continue to plan the introduction of additional curricula in our colleges this year, including the rescheduled September introduction of our new curriculum in Computer Network Systems Technology." ESI has filed a registration statement with the Securities and Exchange Commission, which is not yet effective, relating to the proposed Offering. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. When it becomes available, a copy of the written prospectus relating to the Offering may be obtained from the Prospectus Department -- Credit Suisse First Boston, 11 Madison Avenue, New York, NY 10010. ITT Educational Services, Inc. operates 63 ITT Technical Institutes in 27 states which provide career-focused postsecondary programs of study in fields of technology to approximately 24,000 students. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN THIS PRESS RELEASE ARE FORWARD LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE THE FOLLOWING: BUSINESS CONDITIONS AND GROWTH IN THE POSTSECONDARY EDUCATION INDUSTRY AND IN THE GENERAL ECONOMY; CHANGES IN FEDERAL AND STATE GOVERNMENTAL REGULATIONS WITH RESPECT TO EDUCATION AND ACCREDITATION STANDARDS, OR THE INTERPRETATION OR ENFORCEMENT THEREOF, INCLUDING, BUT NOT LIMITED TO, THE LEVEL OF GOVERNMENT FUNDING FOR, AND THE COMPANY'S ELIGIBILITY TO PARTICIPATE IN, STUDENT FINANCIAL AID PROGRAMS UTILIZED BY THE COMPANY'S STUDENTS; THE RESULTS OF THE COMPANY'S APPEAL IN ELDREDGE, ET AL, V. ITT EDUCATIONAL SERVICES, INC., ET AL. AND THE RESULTS OF ANY RELATED LITIGATION; EFFECTS OF ANY CHANGE IN OWNERSHIP OF THE COMPANY RESULTING IN A CHANGE IN CONTROL OF THE COMPANY, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES OF SUCH CHANGES ON THE ACCREDITATION AND FEDERAL AND STATE REGULATION OF THE INSTITUTES; RECEPTIVITY OF STUDENTS AND EMPLOYERS TO THE COMPANY'S EXISTING PROGRAM OFFERINGS AND NEW CURRICULA; LOSS OF LENDER ACCESS TO THE COMPANY'S STUDENTS FOR STUDENT LOANS; A SUBSTANTIAL INCREASE IN THE SHARES OF COMMON STOCK AVAILABLE FOR SALE IN THE MARKET IF SOME OR ALL OF ITT CORPORATION'S COMMON STOCK HOLDINGS ARE DIVESTED; AND OTHER RISKS AND UNCERTAINTIES DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ITT EDUCATIONAL SERVICES, INC. STATEMENTS OF INCOME (IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1998 1997 REVENUES Tuition $62,587 $55,746 Other educational 9,700 8,730 Total revenue 72,287 64,476 COSTS AND EXPENSES Cost of educational services 41,438 37,984 Student services and 19,436 17,536 administrative expenses Change of control expenses 443 --- Total costs and 61,317 55,520 expenses Operating income 10,970 8,956 Interest income, net 1,244 1,380 Income before income taxes 12,214 10,336 Income taxes 4,886 4,134 Net Income $7,328 $6,202 Earnings per common share (basic $0.27 $0.23 and diluted) SUPPLEMENTAL DATA: Cost of educational services 57.3% 58.9% Student services and 26.9% 27.2% administrative expenses Change of control expenses 0.6% --- Operating margin 15.2% 13.9% Operating losses from new $636 $578 institutes (after-tax) Student enrollment at end of 23,879 22,172 period Technical institutes at end of 63 59 period ITT EDUCATIONAL SERVICES, INC. BALANCE SHEETS (IN THOUSANDS EXCEPT PER SHARE DATA) March 31, December 31, March 31, 1998 1997 1997 (unaudited) (unaudited) ASSETS Current assets Cash and cash equivalents $90,217 $29 $62 Restricted cash 6,689 3,860 844 Cash invested with --- 94,800 85,936 ITT Corporation Accounts receivable, net 12,770 9,680 9,797 Deferred income tax 1,843 2,019 1,217 Prepaids and other 3,939 2,570 4,248 current assets Total current assets $115,458 $112,958 $102,104 Property and equipment, 22,937 22,886 21,429 net Direct marketing costs 7,054 6,882 5,969 Other assets 3,338 3,188 1,946 Total assets 148,787 145,914 131,448 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $11,639 $14,974 $14,039 Accrued compensation and 5,054 3,245 3,481 benefits Other accrued liabilities 11,729 6,877 6,617 Deferred tuition revenue 23,041 30,850 30,800 Total current 51,463 55,946 54,937 liabilities Other liabilities 2,181 2,153 1,617 Total liabilities 53,644 58,099 56,554 Shareholders' equity Preferred stock, $.01 par --- --- --- value, 5,000,000 shares authorized, none issued or outstanding Common stock, $0.1 par 270 270 270 value, 50,000,000 shares authorized, 26,999,952 issued and outstanding Capital surplus 32,513 32,513 32,513 Retained earnings 62,360 55,032 42,111 Total shareholders' 95,143 87,815 74,894 equity Total liabilities and $148,787 $145,914 $131,448 shareholders' equity For more information on ITT Educational Services, Inc. via facsimile at no cost, simply dial 1-800-PRO-INFO and enter the company code ESI. -----END PRIVACY-ENHANCED MESSAGE-----