<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
Form 8-K/A
Amendment #1 to Form 8-K Filed July 2, 1996
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 19, 1996
DeVRY INC.
------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-12751 36-3150143
------------- ----------- ------------
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Indentification
incorporation) No.)
One Tower Lane
Oakbrook Terrace, Illinois 60181
-------------------------- --------
(Address of principal (Zip Code)
executive offices)
(630) 571-7700
-------------------
(Registrant's telephone
number, including area
code)
Exhibit Index is on Page 20 Total Number of Pages is 21
<PAGE>2
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
This Form 8-K/A amends Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits of the Company's Current Report on Form 8-K
dated June 19, 1996, and filed July 2, 1996, as follows:
1. Item 7(a) is being amended to include the required financial statements
of Becker CPA Review Course which was acquired by the Company on
June 19, 1996.
2. Item 7(b) is being amended to include the required pro forma financial
statements with respect to the acquisition of Becker CPA Review Course
by the Company on June 19, 1996.
3. Item 7(c) is being amended to include an additional exhibit related to
the financial statements included herein.
<PAGE>3
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS INDEX
- -----------------------------------------------------
The following documents are filed as part of this report:
8-K/A
Report Page
-----------
(a) Financial Statements of Business Acquired
The following financial statements of Becker CPA
Review Course are included on pages 4 through 15 of
this report:
Report of Independent Accountants 5
Combined Balance Sheets at April 30, 1996 and 1995 6
Combined Statements of Income for the years ended
April 30, 1996 and 1995 7
Combined Statements of Cash Flows for the years
ended April 30, 1996 and 1995 8
Combined Statements of Shareholder's and Partners'
Equity for the years ended April 30, 1996 and 1995 9
Notes to Combined Financial Statements 10 - 15
(b) Pro Forma Financial Information
The following pro forma combined financial
statements of DeVry Inc. and Becker CPA Review
Course are included on pages 16 through 18 of this
report:
Explanation of Pro Forma Combined Financial Statement 16
Pro Forma Combined Statement of Income for the year
ended June 30, 1996 17
Notes to Pro Forma Combined Financial Statement 18
(c) Exhibits
See Exhibit Index located on page 20
SIGNATURES 19
EXHIBIT INDEX 20
<PAGE>4
BECKER CPA REVIEW COURSE
REPORT AND FINANCIAL STATEMENTS
APRIL 30, 1996 AND 1995
<PAGE>5
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
July 19, 1996
To the Board of Directors and Shareholder of
Becker CPA Review Course of California, and
the Partners of Becker CPA Review Course, Ltd.
In our opinion, the accompanying combined balance sheets and the related
combined statements of income, combined statements of shareholder's and
partners' equity and combined statements of cash flows present fairly, in
all material respects, the financial position of the Becker CPA Review Course
(the Course)(see Note 1) at April 30, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Course's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 1 to the financial statements, substantially all of the
net combined assets of the Course were sold effective June 19, 1996.
Price Waterhouse LLP
Los Angeles, California
<PAGE>6
<TABLE>
BECKER CPA REVIEW COURSE
COMBINED BALANCE SHEETS
-----------------------
<CAPTION>
April 30,
------------------
1996 1995
ASSETS ---- ----
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,028,000 $1,502,000
Receivables (Note 3) 708,000 853,000
Receivable from Newton D. Becker (Notes 4 and 6) 1,206,000 304,000
---------- ----------
Total current assets 2,942,000 2,659,000
---------- ----------
Property and equipment, at cost:
Equipment 2,137,000 2,054,000
Leasehold improvements 774,000 751,000
---------- ----------
2,911,000 2,805,000
Less accumulated depreciation (2,545,000) (2,402,000)
---------- ----------
Total property and equipment, net 366,000 403,000
---------- ----------
Other assets 165,000 90,000
Intangible asset-employee benefit plan (Note 8) - 43,000
---------- ----------
$3,473,000 $3,195,000
========== ==========
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable, accrued expenses,
and accrued pension (Note 8) $ 692,000 $ 739,000
Refunds due students 975,000 975,000
Deferred income taxes (Note 5) 20,000 20,000
---------- ----------
Total current liabilities 1,687,000 1,734,000
---------- ----------
Commitments and contingent liabilities (Note 7)
Shareholder's and partners' equity (Note 1) 1,786,000 1,461,000
---------- ----------
$3,473,000 $3,195,000
========== ==========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>7
<TABLE>
BECKER CPA REVIEW COURSE
COMBINED STATEMENTS OF INCOME
-----------------------------
<CAPTION>
Year Ended
April 30,
------------------
1996 1995
---- ----
<S> <C> <C>
Revenues:
Tuition and fees $19,809,000 $19,623,000
Interest income 122,000 170,000
----------- -----------
19,931,000 19,793,000
Expenses: ----------- -----------
Contract services -
Instructors 3,432,000 3,249,000
Interviewers, administration, and
campus representative coordinators 2,121,000 2,007,000
Administrative salaries, wages and
employee benefits 2,371,000 2,508,000
Classroom supplies 1,589,000 1,501,000
Classroom rentals 1,891,000 1,775,000
Postage and telephone 900,000 881,000
Direct mail and advertising 859,000 909,000
Professional fees 215,000 295,000
Travel 399,000 403,000
Reproduction and printing 462,000 353,000
Pension cost 128,000 202,000
Other general and administrative 1,401,000 1,277,000
----------- -----------
15,768,000 15,360,000
----------- -----------
Income before royalty 4,163,000 4,433,000
Royalty (Note 4) 3,669,000 3,880,000
----------- -----------
Net income $ 494,000 $ 553,000
=========== ===========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>8
<TABLE>
BECKER CPA REVIEW COURSE
COMBINED STATEMENTS OF CASH FLOWS
---------------------------------
<CAPTION>
Year Ended
April 30,
------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 494,000 $ 553,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 220,000 232,000
Changes in assets and liabilities -
Receivables 145,000 36,000
Other assets (75,000) (24,000)
Intangible asset - employee benefit plan 43,000 174,000
Accounts payable, accrued expenses
and accrued pension (47,000) (17,000)
Refunds due students 155,000
---------- ----------
Net cash provided by operating activities 780,000 1,109,000
---------- ----------
Cash flows from investing activities:
Purchase of equipment (183,000) (261,000)
---------- ----------
Net cash used in investing activities (183,000) (261,000)
---------- ----------
Cash flows from financing activities:
Advance to Newton D. Becker (902,000) (304,000)
Partner withdrawals (169,000) (392,000)
---------- ----------
Net cash used in financing activities (1,071,000) (1,112,000)
---------- ----------
Net decrease in cash and cash equivalents (474,000) (264,000)
Cash and cash equivalents at beginning of year 1,502,000 1,766,000
---------- ----------
Cash and cash equivalents at end of year $1,028,000 $1,502,000
========== ==========
Supplemental disclosures of cash flow information
Cash paid during the year for -
Interest $ 400 $ 24,000
Noncash investing activity -
Write-off of fully depreciated assets $ 73,488 $ 8,600
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>9
<TABLE>
BECKER CPA REVIEW COURSE
COMBINED STATEMENTS OF SHAREHOLDER'S AND PARTNERS' EQUITY
FOR YEARS ENDED APRIL 30, 1996 AND 1995 (NOTE 1)
------------------------------------------------
<CAPTION>
Balance at Balance at Balance at
April 30, Net Partners' April 30, Net Partners' April 30,
1994 Income Withdrawals 1995 Income Withdrawals 1996
---- ------ ----------- ---- ------ ----------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Becker CPA Review Course, Ltd.:
General partner $1,153,000 $172,000 $1,325,000 $163,000 $1,488,000
Limited partners 282,000 259,000 ($392,000) 149,000 245,000 ($169,000) 225,000
---------- -------- -------- ---------- -------- -------- ----------
1,435,000 431,000 (392,000) 1,474,000 408,000 (169,000) 1,719,000
---------- -------- -------- ---------- -------- -------- ----------
Becker CPA Review Course of
California:
Capital stock 4,000 4,000 4,000
Retained earnings 1,144,000 294,000 1,438,000 249,000 1,687,000
Deferred income taxes 25,000 25,000 25,000
---------- -------- -------- ---------- -------- -------- ----------
1,173,000 294,000 1,467,000 249,000 1,716,000
---------- -------- -------- ---------- -------- -------- ----------
Intercompany eliminations (1,308,000) (172,000) (1,480,000) (163,000) 1,643,000
---------- -------- -------- ---------- -------- -------- ----------
Combined $1,300,000 $553,000 ($392,000) $1,461,000 $494,000 ($169,000) $1,786,000
========== ======== ======== ========== ======== ======== ==========
</TABLE>
See accompanying notes to combined financial statements.
<PAGE>10
BECKER CPA REVIEW COURSE
NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
NOTE 1 - ORGANIZATION:
- ---------------------
The entities comprising the Becker CPA Review Course (the Course) are
as follows:
Becker CPA Review Course, Ltd. (the Partnership)
- ------------------------------------------------
A California limited partnership formed on June 4, 1973 which operates schools
in states other than California. Ownership interests are as follows:
General Partner -
Becker CPA Review Course of California
(a California S Corporation owned 100% by
Newton D. Becker) 40%
Limited Partners -
Newton D. Becker 15%
David E. Becker 15%
Laura E. Becker 15%
Daniel J. Becker 15%
----
100%
====
Profits and losses are shared by the partners in proportion to their
respective ownership ratios.
Becker CPA Review Course of California (the "Corporation")
- ----------------------------------------------------------
This is a California corporation incorporated on May 28, 1965 which operates
schools within California. The Corporation is owned 100% by Newton D. Becker
and has elected to be taxed as an S Corporation for both federal and state tax
purposes.
At April 30, 1996 and 1995, 40 shares of capital stock, $100 par value, were
issued and outstanding of the 250 shares authorized.
Acquisition by DeVry Inc.
- -------------------------
Effective June 19, 1996, DeVry Inc. acquired substantially all of the net
combined assets of the Course.
<PAGE>11
NOTE 2 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
- -----------------------------------------------------------------
Nature of Operations
- --------------------
The Becker CPA Review Course conducts accounting schools throughout the
United States aimed primarily at preparing students to pass the nationally
administered and centrally graded Certified Public Accountant's (CPA)
examination. The CPA examination is held twice each year for a 2 day period
beginning on a Wednesday afternoon early in May and November. Each term is
conducted over a period of four or five months and ends the week before the
CPA examination. There were 138 school locations in operation during 1996
and 135 during 1995. Additionally, Certified Management Accountant (CMA)
review courses are offered in May and November. Newton D. Becker began the
CPA course in 1959 in Cleveland, Ohio.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
Recognition of Income and Expenses
- ----------------------------------
The first school term for the CPA review course runs from June to October and
the second term from December to April. Tuition, fees and related costs are
taken into income over the period of each term. A liability is recognized for
that portion of tuition received from students who may be entitled to a refund
due to their not attending a full term. As registration for the May CMA course
is conducted during April, all income related to the May review course is
recorded as deferred income as of April 30, 1996. This balance is recognized
as income over the one-month term of the course.
Concentration of credit risk with respect to tuition accounts receivable is
limited due to the large number of the Course's students base and their
dispersion. The Course generally does not require collateral from its
students.
Principles of Combination
- -------------------------
The combined financial statements include the accounts of the Partnership and
the Corporation described in Note 1. These entities are affiliated through
substantially common ownership and common management. In combining the
accounts, transactions and balances between entities have been eliminated.
Fair Value of Financial Instruments
- -----------------------------------
Financial instruments are valued at cost. Based on the short-term nature of
the instruments, the carrying amount is a reasonable estimate of their fair
value.
<PAGE>12
NOTE 2: (Continued)
- ------
Cash and Cash Equivalents
- -------------------------
For the purpose of the combined statements of cash flows, all highly liquid
debt instruments purchased with a maturity of three months or less are
considered to be cash equivalents.
Property and Equipment
- ----------------------
Depreciation of equipment is provided on a straight-line basis over estimated
useful lives which range from three to six years. Leasehold improvements are
amortized on a straight-line basis over the shorter of the asset's useful life
of five years, or the life of the lease.
Expenditures for betterments and major renewals are capitalized and maintenance
and repairs are charged to operations as incurred. When assets are sold or
otherwise disposed of, the cost and related accumulated depreciation are
removed from the accounts, and any resulting gain or loss thereon is included
in operations.
Refunds Due Students
- --------------------
The Course recognizes unutilized refunds due to students as income after two
years.
NOTE 3 - RECEIVABLES:
- --------------------
Receivables at April 30 include the following:
1996 1995
---- ----
Current receivables:
Tuition accounts receivable $616,000 $737,000
Other receivables 92,000 116,000
-------- --------
$708,000 $853,000
======== ========
NOTE 4 - ROYALTY EXPENSE:
- ------------------------
The Partnership pays a royalty fee to Newton D. Becker, based upon its income
before deduction of royalty expense, for the use of instructional material such
as tape recordings and transparencies prepared and continually updated by him.
Under the royalty agreement, the Partnership advances royalty fees to
Mr. Becker throughout the year.
<PAGE>13
NOTE 5 - INCOME TAXES:
- ---------------------
Effective May 1, 1989, the Becker CPA Review Course of California, a California
corporation, elected to file its federal and California state income tax
returns under the S Corporation provisions of the Internal Revenue Code and
related California statute. In accordance with these provisions, corporate
earnings at the federal level flow through and are taxed at the individual
shareholder level; however, there remains a 1.5% corporate level surtax for
California state franchise tax purposes. Deferred income taxes are provided
for potential federal and state income tax deficiencies that may arise relating
to years prior to fiscal year 1990.
NOTE 6 - RECEIVABLE FROM/ PAYABLE TO NEWTON D. BECKER:
- -----------------------------------------------------
At April 30, 1996, the Course had advanced $741,000 to Mr. Becker for royalty
fees due. Other amounts due from Mr. Becker totaled $465,000. At April 30,
1995, royalty advances totaled $304,000.
NOTE 7 - COMMITMENTS:
- --------------------
Payments due under long-term noncancelable leases for rentals of classrooms
and the headquarters in Los Angeles are as follows:
1997 $ 871,000
1998 778,000
1999 552,000
2000 418,000
Thereafter 969,000
----------
$3,588,000
==========
Long-term leases generally contain renewal options and provisions for increased
rentals under certain conditions.
<PAGE>14
NOTE 8 - EMPLOYEE BENEFIT PLAN:
- ------------------------------
The Course has a defined benefit plan (the Plan) covering eligible employees.
Normal retirement age is 65, with provision made for early or late retirement.
Benefits are based on years of service and the employee's compensation,
primarily during the last five years of service. The Course's funding policy
is to make contributions as required by applicable regulations. All Plan
assets are invested in an annuity contract with Principal Mutual Life
Insurance Company.
A summary of the components of net periodic pension cost for the years ended
April 30, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Service cost - benefits earned during the period $101,000 $130,000
Interest cost 84,000 82,000
Actual return on plan assets (107,000) (67,000)
Net amortization and deferral 50,000 57,000
-------- --------
Net periodic pension cost $128,000 $202,000
======== ========
</TABLE>
The funded status of the Plan at April 30, 1996 and 1995 is summarized below:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Actuarial present value of projected benefit obligation
Vested employees $1,217,000 $ 789,000
Non-vested employees 44,000 313,000
---------- ----------
1,261,000 1,102,000
Additional amounts related to projected salary
increases 202,000 145,000
---------- ---------
Total projected benefit obligation 1,463,000 1,247,000
Plan assets at fair value 1,286,000 1,086,000
---------- ----------
Projected benefit obligation in excess of Plan assets (177,000) (161,000)
Unrecognized net gain (256,000) (332,000)
Unrecognized prior service cost 471,000 521,000
Adjustment required to recognize minimum liability - (43,000)
---------- ----------
Prepaid/(accrued) pension cost $ 38,000 ($ 15,000)
========== ==========
</TABLE>
<PAGE>15
NOTE 8: (Continued)
- ------
In accordance with Financial Accounting Standards Board Statement No. 87
(FAS 87), "Employees' Accounting for Pensions", the Course recorded an
additional minimum pension liability at April 30, 1995 of $43,000 representing
the unfunded accumulated benefit obligation. Also, as provided for in FAS 87,
an equal amount was recorded as an intangible asset. As of April 30, 1996 no
such unfunded accumulated benefit obligation existed.
The projected benefit obligations at April 30, 1996 and 1995 were determined
using assumed discount rates of 6.25% and 7.0% and assumed 5.26% and 5.23%
rates of increase in future compensation levels, respectively. The assumed
long-term rate of return on plan assets was 7.00% for 1996 and 1995.
<PAGE>16
DeVRY INC.
PRO FORMA COMBINED FINANCIAL STATEMENT
(Unaudited)
The following pro forma combined statement of income gives effect to the
purchase of substantially all of the net assets of Becker CPA Review Course
(Becker CPA) effective June 19, 1996 by two newly formed wholly owned
subsidiaries of DeVry Inc. (the "Company").
The pro forma information is based on the historical financial statements
of the Company and Becker CPA and gives effect to the transaction under the
purchase method of accounting and the assumptions and adjustments in the
accompanying notes to the pro forma combined statement of income. Under the
purchase method, the assets acquired and liabilities assumed are recorded
at their estimated fair values at the date of acquisition. The unaudited
pro forma combined statement of income combines the results of operations
of Becker CPA for the fiscal year ended April 30, 1996 with the results of
operations of the Company for the fiscal year ended June 30, 1996, as
if the acquisition had ocurred as of July 1, 1995.
The pro forma combined statement of income has been prepared by Company
management based upon the financial statements of Becker CPA included
elsewhere herein. These pro forma combined statements may not be indicative
of the results that actually would have occurred if the combination had been
in effect on the dates indicated or which may be obtained in the future.
The proforma combined statement of income should be read in conjunction with
the audited financial statements and notes of Becker CPA contained elsewhere
herein and of the Company contained in the Current Report on Form 8-K dated
August 22, 1996 as filed with the Securities and Exchange Commission.
<PAGE>17
<TABLE>
DeVRY INC.
PRO FORMA COMBINED STATEMENT OF INCOME
For the Year Ended June 30, 1996
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Historical Pro Forma
----------------------- -----------------------
DeVry Inc. Becker CPA Adjustments Combined
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
REVENUES:
Tuition $236,607 $ 19,809 $ $256,416
Other Educational 22,341 22,341
Interest 1,059 122 1,181
-------- -------- -------- --------
Total Revenues 260,007 19,931 - 279,938
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of Educational
Services 155,254 7,374 162,628
Student Services and
Administrative Expense 70,992 8,394 1,455 (b) 80,841
Interest Expense 1,063 2,487 (b) 3,550
-------- -------- -------- --------
Total Costs and Expenses 227,309 15,768 3,942 247,019
-------- -------- -------- --------
Income Before Royalty 32,698 4,163 (3,942) 32,919
Royalty 3,669 (3,669)(b)
-------- -------- -------- --------
Income Before Income Taxes 32,698 494 (273) 32,919
Income Tax Provision 13,453 91 (b) 13,544
-------- -------- -------- --------
NET INCOME (LOSS) $ 19,245 $ 494 $ (364) $ 19,375
======== ======== ======== ========
EARNINGS PER COMMON SHARE $1.14 $1.15
======== ========
Weighted Average Shares
Outstanding (In thousands) 16,830 16,830
======== ========
</TABLE>
See notes to pro forma combined statement of income.
<PAGE>18
DeVRY INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENT
For The Year Ended June 30, 1996
(a) Effective June 19, 1996, the Company acquired substantially all of
the net assets of Becker CPA for $36,393,000 in cash and recorded
contingent liabilities related to the acquisition of $350,000. The
Company financed 100 % of the acquisition through borrowings under
an existing revolving loan agreement.
Under purchase accounting, Becker CPA's assets and liabilities are
required to be adjusted to reflect their fair values. The amounts
have been based on computational techniques designed to approximate
their fair values. The purchase price has been allocated as
follows:
Net assets acquired as reported by Becker CPA $993,000
Fair value adjustments:
Intellectual Property 17,425,000
Tradenames 17,465,000
Goodwill & Other 860,000
-----------
Purchase price $36,743,000
===========
Acquisition debt $36,393,000
Contingent liabilities 350,000
-----------
Purchase price $36,743,000
===========
(b) The Pro Forma Combined Statement of Income combines results of
operations as though the acquisition ocurred on July 1, 1995. In
combining the entities, the following pro forma adjustments have
been made:
Amortization of intangible assets
(Straight line over estimated useful
lives of 5 to 25 years) $1,455,000
Interest expense on borrowings to effect
acquisition (Using Company's year end
effective interest rate of 6.84%) 2,487,000
Elimination of royalty payment to Becker
CPA's principle shareholder (3,669,000)
Income taxes at the Company's effective tax rate:
Income tax expense on Becker CPA earnings 203,000
Tax effects on above adjustments (112,000)
----------
Net adjustment $ 364,000
==========
<PAGE>19
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DeVRY INC.
-----------
(Registrant)
Date: August 29, 1996 By: /s/Norman M. Levine
-------------------
Norman M. Levine
Vice President and
Chief Operating Officer
Date: August 29, 1996 By: /s/Ronald L. Taylor
-------------------
Ronald L. Taylor
Chief Operating Officer
<PAGE>20
EXHIBIT INDEX
Sequentially
Exhibit # Item Numbered Page
--------- -------------------------------- --------------
23 Consent of Price Waterhouse, LLP, 21
independent accountants
<PAGE>21
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-44563) of DeVry Inc. of our report dated
July 19, 1996 related to the combined financial statements of the Becker
CPA Review Course, which appears in the Current Report of Form 8-K/A of
DeVry Inc. dated August 30, 1996.
Price Waterhouse LLP
Los Angeles, California
August 30, 1996
