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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-KA
Amendment to Application or Report
Filed Pursuant to Section 12, 13 or 15 (d) of
The Securities Exchange Act of 1934
Nobel Education Dynamics, Inc.
(Exact Name of Registrant as Specified in Charter)
Amendment No. 1
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its current Report on Form 8-K (date
of earliest event reported March 10, 1995) dated March 24, 1995, as set forth in
the pages attached hereto:
Item 8 Financial Statements and Exhibits
- ------ ---------------------------------
A. Pro Forma Financial Information
1. Pro Forma Combined Balance Sheet of Registrant and Carefree
Learning Centers, Inc. as of December 31, 1994 (Unaudited).
2. Pro Forma Combined Statement of Operations of Registrant and
Carefree Learning Centers, Inc. for the year ended December
31, 1994 (Unaudited).
3. Notes to the Pro Forma Combined Financial Statements.
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NOBEL EDUCATION DYNAMICS, INC.
AND SUBSIDIARIES
PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements include the
accounts of Nobel Education Dynamics, Inc. and subsidiaries (the Company) and
Carefree Learning Centers, Inc. acquired in March 1995. Such pro forma combined
financial statements assume that the acquisition was accounted for as purchase
at the beginning of the respective period for the combined statements of
operations and combined balance sheet.
The pro forma combined financial statements are unaudited, but in the opinion of
management, all adjustments necessary to present fairly such pro forma combined
financial statements have been made.
These pro forma combined financial statements should be read in connection with
the related notes thereto and in connection with the historical financial
statements of the Company and Carefree Learning Centers, Inc., incorporated
herein by reference. The pro forma combined statements of operations are not
necessarily indicative of what the actual results of operations would have been
had the transactions occurred as of the beginning of the respective periods, nor
do they purport to indicate the results of future operations of the Company.
2
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NOBEL EDUCATION DYNAMICS AND CAREFREE LEARNING CENTERS, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEETS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
REGISTRANT CAREFREE PRO FORMA PRO FORMA
CURRENT ASSETS: HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS 853,886 0 40,000 C 893,886
ACCOUNTS RECEIVABLE, LESS ALLOWANCE FOR 614,640 129,497 744,137
DOUBTFUL ACCOUNTS OF $96,282 IN 1994
NOTES RECEIVABLE 45,114 11,645 56,759
PREPAID INSURANCE 169,404 57,761 227,165
PREPAID EXPENSES 636,616 0 636,616
---------- --------- ---------- ----------
TOTAL CURRENT ASSETS 2,319,660 198,903 40,000 2,558,563
PROPERTY, PLANT AND EQUIPMENT AT COST 13,398,969 210,381 13,609,350
LESS ALLOW. FOR DEPRECIATION (4,216,505) 0 (4,216,505)
---------- --------- ---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 9,182,464 210,381 0 9,392,845
PROPERTY AND EQUIPMENT HELD FOR SALE 1,266,648 0 1,266,648
COST IN EXCESS OF NET ASSETS ACQUIRED 8,887,995 0 2,058,723 B 8,887,995
DEPOSITS AND OTHER ASSETS 1,066,926 37,316 3,162,965
DEFERRED TAX ASSET 510,300 0 510,300
---------- --------- ---------- ----------
TOTAL ASSETS 23,233,993 446,600 2,098,723 25,779,316
========== ========= ========= ==========
LIABILITIES AND SHAREHOLDERS EQUITY
CASH OVERDRAFT 38,281 38,381
REVOLVING LINE OF CREDIT
(UNUSED PORTION 400,000) 0 0 0
CURRENT PORTION OF LONG TERM OBLIGATIONS 1,767,756 0 1,767,756
CURRENT PORTION OF CAPITAL LEASES 57,194 0 57,194
DUE TO PA BLUE SHIELD 0 63,355 63,355
ACCOUNTS PAYABLE AND OTHER CURRENT
LIABILITIES 4,594,768 253,062 3,115 C 4,850,845
DEFERRED TUITION INCOME 0 180,399 180,399
RESERVE FOR RESTRUCTURING 96,900 0 96,900
---------- --------- ---------- ----------
TOTAL CURRENT LIABILITIES 6,516,618 535,097 3,115 7,054,830
---------- --------- ---------- ----------
LONG TERM OBLIGATIONS 7,846,151 1,507,111 500,000 A 9,853,262
DEFERRED RENT, NET OF CURRENT PORTION 0 145,605 (145,605) C 0
CAPITAL LEASE OBLIGATIONS 371,543 0 371,543
DEFERRED GAIN ON SALE LEASEBACK 63,303 0 63,303
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 138,073 0 138,073
---------- --------- ---------- ----------
TOTAL LIABILITIES 14,935,688 2,187,813 357,510 17,481,011
COMMITMENTS AND CONTINGENCIES
(SEE NOTES 3, 7, 9 AND 10 ON FORM 10-K)
SHAREHOLDERS' EQUITY:
PREFERRED STOCK - $.001 PAR VALUE - 10,000,000 SHARES
AUTHORIZED - 4,984,000 OUTSTANDING 4,984 100,000 (100,000) B 4,984
COMMON STOCK - $.001 PAR VALUE - 50,000,000
SHARES AUTHORIZED - 15,445,063 OUTSTANDING 15,445 15,445
ADDITIONAL PAID IN CAPITAL 19,644,922 650,000 (650,000) B 19,644,922
ACCUMULATED DEFICIT (11,367,046) (2,491,213) 2,491,213 B (11,367,046)
---------- --------- ---------- ----------
8,298,305 (1,741,213) 1,741,213 8,298,305
---------- --------- ---------- ----------
TOTAL LIABILITIES AND EQUITY 23,233,993 446,600 2,098,723 25,779,316
========== ========= ========= ==========
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
3
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NOBEL EDUCATION DYNAMICS AND CAREFREE LEARNING CENTERS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
REGISTRANT CAREFREE PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
REVENUES 34,371,501 4,446,210 38,817,711
OPERATING EXPENSES 28,160,537 3,832,743 (10,972) D 31,982,308
---------- --------- --------- ----------
CENTER OPERATING PROFIT 6,210,964 613,467 10,972 6,835,403
--------- --------- -------- ---------
GENERAL & ADMINISTRATIVE EXPENSES 2,896,076 746,377 (621,377) E 3,021,076
OPERATING INCOME 3,314,888 (132,910) 632,349 3,814,327
--------- --------- -------- ---------
INTEREST EXPENSE 1,222,971 (3,566) 170,569 F 1,389,974
OTHER INCOME (LOSS) 106,960 (8,500) 8,500 G 106,960
MINORITY INTEREST IN INCOME OF SUBSIDIARY 83,491 0 0 83,491
--------- --------- -------- ---------
INCOME (LOSS) BEFORE TAXES 1,901,466 (120,844) 453,280 2,233,902
INCOME TAX (BENEFIT) EXPENSE (438,300) (21,450) 21,450 H (438,300)
--------- --------- -------- ---------
NET INCOME 2,339,766 (99,394) 431,830 2,672,202
PREFERRED STOCK DIVIDENDS 198,555 0 0 198,555
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS 2,141,211 (99,394) 431,830 2,473,647
========= ======== ======= =========
PRIMARY EARNINGS PER SHARE $0.13 $0.15
===== =====
FULLY DILUTED EARNINGS PER SHARE $0.12 $0.13
===== =====
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
4
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NOBEL EDUCATION DYNAMICS, INC.
Notes to Pro Forma Combined Financial Statements
1. Basis of Presentation
The pro forma combined financial statements include the accounts and results
of the Company and Carefree Learning Centers, Inc. as if the acquisition had
been consummated as of the beginning of the 12 months ended December 31,
1994.
The Company acquired certain assets and liabilities of Carefree Learning
Centers, Inc. from Pennsylvania Blue Shield on March 10, 1995 for $500,000
in cash and a subordinated promissory note of the Company in the principal
amount of approximately $1,585,000 and the assumption of certain other
liabilities of Carefree in the amount of $360,000
The pro forma combined statement of operations for the 12 months ended
December 31, 1994 include 12 months of operations for both Nobel Education
Dynamics, Inc. and Carefree Learning Centers, Inc. The pro forma combined
balance sheet includes the Company's balance sheet as of December 31, 1994
as well as Carefree Learning Centers, Inc.'s balance sheet as of December
31, 1994.
2. Pro Forma Adjustments
Combined Balance Sheet
A. Adjusted to reflect the $500,000 increase in the principal amount of the
Revolving Credit Loan II resulting from the $500,000 cash payment to
Pennsylvania Blue Shield.
B. Record estimated allocation of excess of purchase price over the
carrying amount of certain net assets acquired to goodwill.
C. To record adjustments per the closing settlement agreement which
includes (1) $40,000 relating to cash received for accrued vacation;
(2) $200,000 was accrued for transaction costs; and (3) the Company did
not assume certain liabilities including accrued payroll and related
taxes totaling $148,000, accrued pension totaling $15,000, other accrued
expenses totaling $2,400 and deferred rents totaling $176,990.
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<TABLE>
<CAPTION>
Accounts Payable and
Accrued Expenses
Adjustment
---------------------------
<S> <C>
Accrued transaction costs $200,000
Eliminate accrued payroll and
related taxes (148,000)
Eliminate accrued pension (15,000)
Eliminate accrued audit (2,400)
Eliminate current portion of
of deferred rent (31,485)
----------
$ 3,115
========
</TABLE>
Combined Statements of Operations
D. To adjust preliminary estimate of expected rent savings due to the
anticipated renegotiation of certain leases totaling $62,440 offset by
amortization of goodwill totaling $51,468 or a net savings of $10,972.
E. The following represents adjustments to general and administrative
expenses of the acquired companies that have been or will have been
implemented by management. These adjustment assume that management's
actions were carried out at the beginning of the periods presented and
only give effect to those items that are factually supportable.
<TABLE>
<CAPTION>
12 Months Ended
December 31, 1994
-----------------
<S> <C>
Eliminate corporate expenses per Carefree
in total; the Company closed the office (746,377)
Additional regional manager and related
costs, car, postage, etc. 95,000
Additional accounting clerk
and benefits 30,000
--------
Total savings (621,377)
========
</TABLE>
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In conjunction with the Carefree acquisition, Bluegrass Real Estate
Company, a subsidiary of the Company, subsequently acquired the Keystone
Real Estate Company.
F. To record interest expense related to cash of $500,000 and subordinated
promissory note
(1) $500,000 X 10% = $ 50,000
(2) $1,507,111 X 8% = 120,569
--------
Total interest = $170,569
========
Note: Prime was assumed to be 8.5%
G. To eliminate other income totaling $8,500 for the 12 months ended
December 31, 1994.
H. To eliminate income tax benefit totaling $21,450 for the 12 months ended
December 31, 1994.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Nobel Education Dynamics, Inc.
(Registrant)
Date: May 9, 1995 By:_________________________
A. J. Clegg
Chairman, President and CEO
Date: May 9, 1995 By:_________________________
Yvonne DeAngelo
Controller and Secretary
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