<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): February 26, 1998
EDUCATIONAL MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-21567 65-0038445
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1327 Northmeadow Parkway, Suite 132, Roswell, Georgia 30076
- ------------------------------------------------------------- ---------------
(Address, including zip code, of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code 770-475-9930
--------------
NOT APPLICABLE
(FORMER NAME)
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 5 OTHER EVENTS AND INFORMATION
The Financial Accounting Standards Board has issued Statement No. 128,
Earnings Per Share (the "New Standard"), which is effective for financial
statements for periods ending after December 15, 1997 and the Securities and
Exchange Commission has issued Staff Accounting Bulletin No. 98 ("SAB 98") which
is effective immediately. The New Standard and SAB 98 require the restatement of
prior period earnings per share and the disclosure of additional supplemental
information detailing the calculation of earnings per share. Educational
Medical, Inc. (the "Registrant") has provided, in an exhibit to this Form 8-K,
restated earnings per share for the Registrant's Annual Report on Form 10-K for
the year ended March 31, 1997 and the Registrant's Quarterly Reports on Form
10-Q for each of the first two quarters of fiscal 1998. Information regarding
the Registrant's third quarter of fiscal 1998 is included in its Quarterly
Report on Form 10-Q for the three months ended December 31, 1997.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99.1 Earnings per Share, Restated for
SFAS 128 and SAB 98
</TABLE>
<PAGE> 3
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.
Educational Medical, Inc.
Date: February 26, 1998 /s/ VINCE PISANO
-----------------------------------
(Signature)
Vince Pisano
Chief Financial Officer
Principal Financial Officer
and
Principal Accounting Officer
<PAGE> 1
EXHIBIT 99.1
THE TABLE BELOW CONTAINS THE RESTATED SELECTED FINANCIAL DATA RELATED TO NET
INCOME (LOSS) PER SHARE AND WEIGHTED AVERAGE SHARES OUTSTANDING FROM THE 1997
ANNUAL REPORT ON FORM 10-K OF EDUCATIONAL MEDICAL, INC. (THE "REGISTRANT"),
WHICH HAS BEEN RESTATED TO PRESENT THE EFFECTS OF FINANCIAL ACCOUNTING STANDARDS
BOARD STATEMENT NO. 128, EARNINGS PER SHARE (THE "NEW STANDARD"), AND STAFF
ACCOUNTING BULLETIN 98.
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------------------------------------
Pro Forma
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data (1)
Basic:
Net income (loss) before extraordinary item $0.58 $0.28 ($0.22) ($0.45) $0.70
Net income (loss) $0.51 $0.28 ($0.22) ($0.45) $0.70
Diluted:
Net income (loss) before extraordinary item $0.41 $0.13 ($0.22) ($0.45) $0.39
Net income (loss) $0.36 $0.13 ($0.22) ($0.45) $0.39
Weighted average number shares
outstanding (in thousands)
Basic 4,484 2,371 2,371 2,371 2,371
Diluted 6,447 5,182 2,371 2,371 4,331
</TABLE>
(1) The numerator amounts reflect the pro forma income tax provision recorded
due to the Nebraska Acquisition. Similarly, the basic and diluted per share
amounts are the pro forma earnings per share amounts. Historical earnings per
share is considered meaningless.
THE TABLE BELOW CONTAINS THE RESTATED FOOTNOTE 12. QUARTERLY FINANCIAL
INFORMATION (UNAUDITED) FROM THE 1997 ANNUAL REPORT ON FORM 10-K OF EDUCATIONAL
MEDICAL, INC.
The following is a summary of the unaudited quarterly financial information for
the years ended March 31, 1997 and 1996:
<TABLE>
<CAPTION>
Quarter
---------------------------------
First Second Third Fourth
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended March 31, 1997
Per Share Data
Basic:
Pro forma net income before extraordinary item $0.03 $0.31 $0.18 $0.10
Pro forma net income $0.03 $0.31 $0.13 $0.10
Diluted:
Pro forma net income before extraordinary item $0.01 $0.13 $0.15 $0.10
Pro forma net income $0.01 $0.13 $0.11 $0.10
Year ended March 31, 1996
Per Share Data
Basic:
Pro forma net income (loss) before extraordinary item ($0.03) $0.12 $0.04 $0.15
Pro forma net income (loss) ($0.03) $0.12 $0.04 $0.15
Diluted:
Pro forma net income (loss) before extraordinary item ($0.03) $0.06 $0.02 $0.07
Pro forma net income (loss) ($0.03) $0.06 $0.02 $0.07
</TABLE>
<PAGE> 2
THE TABLE BELOW PRESENTS THE REQUIRED DISCLOSURES UNDER FINANCIAL ACCOUNTING
STANDARDS BOARD STATEMENT NO. 128 FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND
1995.
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
1997 (1) 1996 (1) 1995 (1)
---------------------------------------------
<S> <C> <C> <C>
Numerator:
Income (loss) before extraordinary item $2,612,329 $ 672,488 $ (513,430)
Extraordinary item 308,683 -- --
---------- ---------- ----------
Net income (loss) $2,303,646 $ 672,488 $ (513,430)
---------- ---------- ----------
Denominator:
Denominator for basic earnings per share -
weighted-average shares 4,484,492 2,371,041 2,371,041
Effect of dilutive securities:
Convertible preferred stock 981,006 1,705,082 --
Options 301,222 222,936 --
Warrants 680,545 882,808 --
---------- ---------- ----------
Denominator for diluted earnings per share -
adjusted weighted-average shares 6,447,265 5,181,867 2,371,041
========== ========== ==========
Income (loss) per share - basic:
Income before extraordinary item $ 0.58 $ 0.28 $ (0.22)
Extraordinary item $ (0.07) -- --
---------- ---------- ----------
Net income (loss) $ 0.51 $ 0.28 $ (0.22)
========== ========== ==========
Income (loss) per share - diluted:
Income before extraordinary item $ 0.41 $ 0.13 $ (0.22)
Extraordinary item $ (0.05) -- --
---------- ---------- ----------
Net income (loss) $ 0.36 $ 0.13 $ (0.22)
========== ========== ==========
</TABLE>
(1) The numerator amounts reflect the pro forma income tax provision recorded
due to the Nebraska Acquisition. Similarly, the basic and diluted per share
amounts are the pro forma earnings per share amounts. Historical earnings per
share is considered meaningless.
(2) Warrants to purchase 16,667 shares of common stock at March 31, 1996 were
outstanding but were not included in the computation of diluted earnings per
share because the warrant's exercise price was greater than the average market
price of the common shares and, therefore, the effect would be antidilutive.
Convertible preferred stock, options and warrants to purchase 3,410,082 shares
of common stock at March 31, 1995 were outstanding but not included due to the
Company's loss, which would make the effect antidilutive.
<PAGE> 3
THE TABLE BELOW CONTAINS THE RESTATED NET INCOME PER SHARE AND WEIGHTED AVERAGE
SHARES OUTSTANDING FROM THE JUNE 30, AND SEPTEMBER 30, 1997 FORM 10-Q'S OF
EDUCATIONAL MEDICAL, INC.
<TABLE>
<CAPTION>
Per share data
------------------------------------------------------- (In thousands)
Income before Weighted average
extraordinary items Extraordinary items Net income shares outstanding
----------------------------------------------------------------------------
Basic Basic Basic Basic
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
June 30, 1997 Form 10-Q:
Three months ended June 30, 1997 $0.03 -- $0.03 7,348
Three months ended June 30, 1996 (1) $0.03 -- $0.03 2,371
September 30, 1997 Form 10-Q:
Three months ended September 30, 1997 $0.08 -- $0.08 7,351
Three months ended September 30, 1996 (1) $0.31 -- $0.31 2,371
Six months ended September 30,1997 $0.11 -- $0.11 7,348
Six months ended September 30,1996 (1) $0.34 -- $0.34 2,371
</TABLE>
<TABLE>
<CAPTION>
Per share data
------------------------------------------------------- (In thousands)
Income before Weighted average
extraordinary items Extraordinary items Net income shares outstanding
----------------------------------------------------------------------------
Diluted Diluted Diluted Diluted
<S> <C> <C> <C> <C>
June 30, 1997 Form 10-Q:
Three months ended June 30, 1997 $0.03 -- $0.03 7,603
Three months ended June 30, 1996 (1) $0.01 -- $0.01 5,537
September 30, 1997 Form 10-Q:
Three months ended September 30, 1997 $0.08 -- $0.08 7,587
Three months ended September 30, 1996 (1) $0.13 -- $0.13 5,537
Six months ended September 30,1997 $0.10 -- $0.10 7,595
Six months ended September 30,1996 (1) $0.14 -- $0.14 5,537
</TABLE>
THE TABLE BELOW CONTAINS THE RESTATED PORTION OF FOOTNOTE 7, STOCKHOLDERS'
EQUITY (REQUIRED BY FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT NO. 123) FROM
THE 1997 ANNUAL REPORT ON FORM 10-K OF EDUCATIONAL MEDICAL, INC.
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------
1997 (1) 1996 (1)
- -----------------------------------------------------------------------------
<S> <C> <C>
Pro forma income before extraordinary item $3,456,221 $479,629
Pro forma net income $3,147,538 $479,629
Pro forma earnings per common share:
Income before extraordinary item - basic $ 0.77 $ 0.20
Income before extraordinary item - diluted $ 0.54 $ 0.09
Net income - basic $ 0.70 $ 0.20
Net income - diluted $ 0.49 $ 0.09
</TABLE>
(1) The numerator amounts reflect the pro forma income tax provision recorded
due to the Nebraska Acquisition. Similarly, the basic and diluted per share
amounts are the pro forma earnings per share amounts. Historical earnings per
share is considered meaningless.
<PAGE> 4
THE TABLE BELOW PRESENTS THE REQUIRED DISCLOSURES UNDER FINANCIAL ACCOUNTING
STANDARDS BOARD STATEMENT NO. 128 FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER
30, 1997 AND 1996.
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, 1997 September 30, 1996(1) September 30, 1997 September 30, 1996(1)
------------------ --------------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Numerator:
Income before extraordinary items $ 583,950 $ 738,538 $ 796,873 $ 797,987
Extraordinary items -- -- -- --
---------- ---------- ---------- ----------
Net income $ 583,950 $ 738,538 $ 796,873 $ 797,987
---------- ---------- ---------- ----------
Denominator:
Denominator for basic earnings per share -
weighted-average shares 7,350,543 2,371,041 7,348,021 2,371,041
Effect of dilutive securities:
Convertible preferred stock -- 1,705,082 -- 1,705,082
Options 222,424 274,640 231,275 274,640
Warrants 14,851 1,186,525 15,548 1,186,525
---------- ---------- ---------- ----------
Denominator for diluted earnings per share -
adjusted weighted-average shares 7,587,818 5,537,288 7,594,844 5,537,288
========== ========== ========== ==========
Income per share - basic:
Income before extraordinary items $ 0.08 $ 0.31 $ 0.11 $ 0.34
Extraordinary items -- -- -- --
---------- ---------- ---------- ----------
Net income $ 0.08 $ 0.31 $ 0.11 $ 0.34
========== ========== ========== ==========
Income per share - diluted:
Income before extraordinary items $ 0.08 $ 0.13 $ 0.10 $ 0.14
Extraordinary items -- -- -- --
---------- ---------- ---------- ----------
Net income $ 0.08 $ 0.13 $ 0.10 $ 0.14
========== ========== ========== ==========
</TABLE>
(1) The numerator amounts reflect the pro forma income tax provision recorded
due to the Nebraska Acquisition. Similarly, the basic and diluted per share
amounts are the pro forma earnings per share amounts. Historical earnings per
share is considered meaningless.
(2) Options to purchase 520,000 and 482,167 shares of common stock for the three
and six months ended September 30, 1997, respectively, were outstanding but were
not included in the computation of diluted earnings per share because the
option's exercise price was greater than the average market price of the common
shares and, therefore, the effect would be antidilutive.
<PAGE> 5
THE TABLE BELOW PRESENTS THE REQUIRED DISCLOSURES UNDER FINANCIAL ACCOUNTING
STANDARDS BOARD STATEMENT NO. 128 FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND
1996.
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended
June 30, 1997 June 30, 1996 (1)
------------- -----------------
<S> <C> <C>
Numerator:
Income before extraordinary items $ 212,923 $ 59,449
Extraordinary items -- --
---------- ----------
Net income $ 212,923 $ 59,449
Denominator:
Denominator for basic earnings per share -
weighted-average shares 7,347,537 2,371,041
Effect of dilutive securities:
Convertible preferred stock -- 1,705,082
Options 239,413 274,640
Warrants 16,293 1,186,525
---------- ----------
Denominator for diluted earnings per share -
adjusted weighted-average shares 7,603,243 5,537,288
========== ==========
Income per share - basic:
Income before extraordinary items $ 0.03 $ 0.03
Extraordinary items -- --
---------- ----------
Net income $ 0.03 $ 0.03
========== ==========
Income per share - diluted:
Income before extraordinary items $ 0.03 $ 0.01
Extraordinary items -- --
---------- ----------
Net income $ 0.03 $ 0.01
========== ==========
</TABLE>
(1) The numerator amounts reflect the pro forma income tax provision recorded
due to the Nebraska Acquisition. Similarly, the basic and diluted per share
amounts are the pro forma earnings per share amounts. Historical earnings per
share is considered meaningless.
(2) Options to purchase 482,167 shares of common stock at June 30, 1997 were
outstanding but were not included in the computation of diluted earnings per
share because the option's exercise price was greater than the average market
price of the common shares and, therefore, the effect would be antidilutive.
